One of the major benefits of sports investing compared to traditional investments is the quicker turnover of the investment pool, which leads to the powerful concept of compound interest. With daily sports events to bet on, potential profits can be reinvested immediately, and even a small advantage can gradually grow the sports investor’s fund into a surprisingly large amount.
This compounding betting strategy is your ticket to turning small bets into life-changing winnings. Stop gambling and start investing in your sports betting. Let your money make money for you through the power of compounding. Before you know it, you’ll have a bankroll that keeps growing and leads to payouts you never thought possible.
How Do You Compound Interest in Sport Betting
Start small and build up slowly
Don’t go betting the whole bankroll right out of the gate. Start with a small amount, we suggest playing 1-3% of your bankroll per bet, and your bet sizes will slowly increase as your bankroll grows. This minimizes risk while maximizing potential profits in the long run. If you need an introduction to bankroll management, you can visit this blog post.
Reinvest your winnings
The power of compounding comes from continually reinvesting what you win back into your next bets. Over time, your winnings start snowballing into bigger payouts. This goes both ways, by betting the same percentage of bankroll, you also keep your losing streaks in control.
Have a system and stick to it
Establish a staking plan for how much you will bet and under what circumstances. Things like bet sizing based on odds, the type of bet, or your confidence level. The key is having the discipline to follow your system through winning and losing streaks.
My personal preference is betting mostly between 1 and 3 units per bet. This is equal to 1 and 3% of my bankroll. My system is based on a mix of my machine-learning probability estimates, the confidence level of the bet, and the expected value.
So, for example, if 2% of my bankroll (2u) is my maximum bet for a 50% probability “average bet”, then for a 25% probability bet my maximum bet could be 1% BR or 1 unit, and for a 75% probability bet 3% bankroll / 3units.)
These are my basic benchmarks and I fine-tune them taking my expected value into account. When I have a let’s say 30% probability of a bet landing, but my expected value is 15% which is considered pretty significant, I might bet 2 units instead of 1 to take advantage of the expected value offered.
I also use Kelly Criterion usually with a divisor between 5 and 8 when placing my bets.
Avoid playing Parlays
What really grinds my gears? The get-rich-quick scheme on where ever money is involved. Twitter is filled with ‘tipsters’ who push their parlays that surely going to land with 100 odds and big bets. Or ladder challenges where it only takes 20 or 30 times to double the bet to reach millions. They are simply making money off of your losses. And I get it, it’s exciting and fun. Just understand the difference between a profitable sports bettor and a degenerate gambler.
Compounding Betting Example
In this article, we will use the data set of 197 sports bets we have been providing to illustrate this point.
Compound interest scenario 1
Here you can see as an example, my bets since I started this project in June.
With our starting fund of 1000 € or 100 units (since I’m using 1u = 1% of bankroll), with staking between 1 to 3 units using Kelly Criterion model, and depending on the probabilities and confidence of the bet, the investor would have reached an end fund of around 229.556 units or 2295.56 € over a series of 197 bets.
However, if the sports investor had invested a fixed amount of 10 € per bet, the fund would have grown to 170.06 units or 1700.60 €.
Now, let’s consider what would happen if the sports investor were able to get 2% better odds on each event. While the difference between odds of 2. 0 and 2. 4 may seem small, it can have a significant impact when considering the compound interest phenomenon over the 197 bets in our example data. With better odds and the power of compound interest, the sports investor’s bankroll would be at 243.53 units or 2437.53€.
It’s important to note that this sample is only based on 200 bets, and thousands of bets would be needed to eliminate variance and luck from the equation. Additionally, odds play a crucial role in sports investing success. A dedicated sports investor who diligently seeks better odds would be far ahead of colleagues who do not pay as much attention to odds when calculating results.
For an active sports investor, making around 1,000 bets in a year is a reasonable estimate. Currently, we are generating average of 4.7 bets daily, which adds up to over 1700 bets per year. This is where the slight advantage of better odds starts to show. Never underestimate the importance of slightly better odds!
Lastly, it’s important to remember that sports betting always involves risk. Past success does not guarantee future results. Advantages may come and go, but the risk always remains. Only gamble with amounts you can comfortably afford to lose
Using a Compound Interest Betting Calculator
Using a compound interest calculator for sports betting can help you determine how your bankroll and bets can grow over time. The power of compounding is amazing, even when the interest rates are small. With sports betting, your “interest rate” is your win percentage and average odds.
So there you have it, a simple but effective betting strategy that can seriously ramp up your winnings over time. By reinvesting your profits with each successful bet, you let compound interest work its magic for you. The more you win, the more you have to bet, and the more you can win. Before you know it, you’ve built up a sizable bankroll and a steady stream of income from your betting efforts. The key is starting small, being consistent, and having the patience to let your money multiply. If you stick with the compounding strategy, you’ll be well on your way to betting like a pro and making your money really work for you.