Advice

Stop Looking At Profits

(Last Updated On: April 26, 2012)

Focusing on how much profit is made by a service, system or your own selections is a mistake that a lot of new punters make. Luckily it is one that is easily rectified!

This may sound a bit contrary but bear with me. I haven’t gone insane, of course we all want to know how much profit we can make but this is a very bad way of assessing your bets.

Profit figures can be easily inflated. It is common to see profits to £10 and £100 bets but I have seen profit figures shown to as high as £500 and £1000 bets. While the figures may look good at £1000 bets, what wouldn’t look so good is the bankroll required. Imagine a 50 unit bankroll at £1000. Do you have £50,000 spare to bet with?

If we focus on return then we can see what we are actually able to make with the money that we have available.

Return should always based on an average over a large amount of bets. If you are looking at a particular service and can’t see this number then just shoot them an email and ask.

The return is calculated on every bet that you make. If you make one hundred £10 bets per month then your return is calculated on £1000. This is one of the benefits of horse racing as an investment medium. A race is over in a very short period of time and you know the profit or loss immediately. Because of this we can turnover our bankroll very quickly and maximise the use of the money that we have available to bet with.

Betting just £5 from a £250 bankroll we can turnover £500 per month if we have one hundred bets. This means that we are making a return on £500, which is double the amount of money that we actually have to bet with!

I am going to show you a much quicker way to calculate your expected profit each month, on average, when using return. These will not be figures provided by anybody else but specifically tailored to you. It is a very simply sum and takes only a few seconds.

You move the decimal place two places to the left for the average return you are told is achieved by the selections. For example, if you are told there is a 50% average return then you move the decimal place two places to the left and y0u get 0.50. If you are told there is a 40% average return then you get 0.40.

All you now need to do is work out how much you are going to be betting, which we have done above, and multiply it by this number. Using our example if you are betting one hundred £5 bets per month then you are betting (or turning over) £500. We multiply this by the return of 40% which is now 0.40 and get £200. On average you will be making £200 profit per month on these bets.

If you are making one hundred £25 bets per month then you are betting £2500 and at a 30% return, which we change to 0.30, you are making £750 per month on average.

It takes just a few seconds using return to work out what you can be expecting to make on average each month. Of course, this goes up and down but over the course of the  3-6 months you should even out at this figure per month!

Michael Wilding

Michael started the Race Advisor in 2009 to help bettors become long-term profitable. After writing hundreds of articles I started to build software that contained my personal ratings. The Race Advisor has more factors for UK horse racing than any other site, and we pride ourselves on creating tools and strategies that are unique, and allow you to make a long-term profit without the need for tipsters. You can also check out my personal blog or my personal Instagram account.

3 Comments

  1. What if you are not told the rate of return on investment. Like a service that does not give tips but gives you contenders, like one of your spread sheets how do you work out return on that.

    Post-racing.net gives rated horses and some times one two and three just like the 52/78 spread sheet. Very happy with both but as niether can be right all the time working out return is some what awkward.

    1. If you are using a service that doesn’t give you the selections but the contenders or tools to find contenders then you need to monitor the selections you are betting.

  2. Good article which takes a slightly different approach. Another mistake many new punters make is spend money subscribing to a tipster service who doesn’t proof their tips.

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