Sports Investing For The Frugal-Minded

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Today, let’s look at what was once a taboo topic but has recently been legalized in many states and is now mainstream even on major media outlets. That topic is sports betting, or as professionals who make legitimate money doing it, sports investing. 

Just because you are frugal-minded, it doesn’t mean that you can’t make money off something you enjoy, like sports. Sports investing is particularly suited to those who are already heavily into fantasy sports

The problem is the idea of gambling and the emotions that the word invokes, almost in a visual manner in our minds. You think of Vegas; it’s good times, but you are essentially just throwing money away on entertainment spend. Or you might think of the Hollywood type-cast loan shark and degenerate gambler who makes shoots their own foot repeatedly by making bad decision after decision. 

But professional sports bettors are anything but those stereotypes. A REAL sports bettor takes a disciplined, measured approach and understands one key element that 99% of the public —even 90%+ of bettors—don’t realize. 

Want to hear the unwritten secret to sports betting that the sportsbooks don’t want you to understand? 

You are not betting on or against Team Y or Team Z; you are betting against the line the bookmakers create. 

Using the recent Super Bowl LV as an example, you were not betting on the Kansas City Chiefs or the Tampa Bay Buccaneers; you were assessing the value of the betting lines set by the books. It’s all about risk assessment. How much is the risk versus the reward? 

You can get the Beginners Guide to Sports Betting for free over at SBR, which goes into even more comprehensive detail on this subject, but I’ll give you the gist of it here and now: 

The trick is, instead of looking at a list of games or upcoming featured events that have been blasted into your mind by the media and then deciding which ones you want to bet, instead only focus on the lines and let the betting line alone dictate which matchups you’ll investigate further. Once you have narrowed it down to a few possibilities, you can focus your time and energy on digging into just a few games with lines that caught your eye. After passing them further, you may place action on all of them, or just one, or perhaps none. The point is to never bet against a line that you haven’t found a clear advantage against. 

But how do you find an advantage? 

I start with power ratings, which are not power rankings. An example of a power rating is ESPN’s FPI or football power index. Power ratings show what a team should win or lose by to an average team in a neutral setting. So, if a team has a rating of 7.3, they should beat an average team (one with a rating near 0.0) but roughly seven points on a neutral field or court. Conversely, ones with a negative rating like -0.8 should lose by eight-tenths of a point to an average team in a neutral setting. So, if two teams with these ratings met, we would have a proposed neutral field margin of 8.1 points. Round that down to eight-points and then assess the value of home-field advantage and factor that in. This would end up as our starting point for an accurate point spread. Now investigate further into weather, personal issues or injuries, momentum, etc. And you can pretty closely handicap a game. 

So, let’ right off the bat we see this and the fact that the -0.8 team is at home, which means we would get some points back from them, perhaps a spread of 6 now, but the listed point spread is -10. This number should jump out at you as a line to investigate further. It doesn’t mean that you will automatically bet it because it looks 4-points soft at a glance, but this is a good example of a line you would want to look into. Is there some news about to break. Is there a player out that you didn’t realize wasn’t going to play? In other words, why did the book set the line so high? 

The other thing books don’t want you to know is that it’s a war of attrition. You should be looking at the long game, not one-off bets. This means managing your bankroll well. Now, as a frugal person, I think you’ll excel at this aspect. It’s all about discipline. Good sports investors only win around 55% of the time. This means you need to set your initial investment amount, which will be your bankroll, and only bet between one-percent and three-percent of your total bankroll. 

Personally, I wager two-percent units. The key to this is weathering bad runs. If you are betting $100 per game and you only have a roll of $1000, one losing streak, and you are out of business. Now, if you are betting 10 or 20 dollars at a time, then you can survive four, five, or six back-to-back losses and still recover. Remember, I said it’s a war of attrition. The other thing with managing your bankroll is not to get cocky. If you go on a winning streak, don’t suddenly up your bet amount or start adding additional wagers that you didn’t focus on. Remember, only bet lines that you have found a tangible advantage against. 

Stick to the plan and stay within your unit percentage. 

In conclusion, investing is investing, and you to can earn money from sports investing by being disciplined with your bankroll and only placing actions against betting lines where you find a clear and distinct advantage, even if you are a frugal person.

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