Betting Bank Management: How to Grow Your Money Safely

A football on top of coin stacks, with a profit graph in the background
A football on top of coin stacks, with a profit graph in the background

We're all aiming to do the same thing... achieve financial security for ourselves and our loved ones.

Most people go out and get a job, pay into a pension for many years and hope to have enough money to retire at a reasonable age. That has worked out well in the past, but as average life expectancy rises and pension funds run out of money, a growing number are starting to look at other options.

The growth in online betting - and particularly exchanges such as Betfair - has opened up new opportunities. Nowadays, it's perfectly possible to trade for a living (or for a second income) which can be literally life-changing when managed correctly.

While profitable football betting is certainly not easy, it's not as impossible as it once was - and it starts with betting bank management.

In this article, I am going to show you how to set up your betting bank and keep it safe. I will also explain how to stake properly and how you can grow your bank passively in order to provide financial security for you and your family.

What is a Betting Bank?

A betting bank is an amount of capital that has been set aside exclusively for the purposes of betting and/or trading.

It should never be more than you can afford to lose.

A disciplined trader who employs good bank management is unlikely to ever lose his or her bank, but many who are new to football trading blow a bank or two before the 'light bulb' moment when it all starts to come together.

This is perfectly normal. Trading is damn tough and inexperienced traders are often easily tempted into chasing losses, which does nothing but make a bad situation worse.

Think about it... if you hit a large loss, how many profitable trades do you then need just to get back to where you started in the first place?

Small losses are acceptable and they are unavoidable. There are various betting websites which will try to convince you that they have some sort of magical betting system which never loses, but that's mathematically impossible. Live in the real world.

Learn to accept small losses and recover steadily with disciplined trading.

Your aim is to increase your bank over time as safely as possible. Set reasonable, long-term targets and break them down into smaller, manageable amounts. Every time you trade, you are working towards your target.

As your bank grows, the 'snowball' effect takes over and things get very exciting! We'll get into that shortly.


I Blew my Bank... Now What?

When I first started trading, I blew my bank.

I'm no different from most people who open a Betfair account, think that they know a lot about football and promptly lose money.

Even Kevin Laverick - now one of the best football traders on the planet - quickly found himself down a lot of money when he first started Betfair trading. It's completely normal.

If you blow your first bank, you're certainly not alone. It's simply a learning curve that most of us go through. What will set you apart from everyone else, however, is how you bounce back.

Do you learn from your mistakes and come back more determined to be successful? Or do you quit?

There was no way that I was going to give up. I would have been doing nothing more than locking in the loss and guaranteeing that I would always remain a loser. I wasn't having that!

I rebuilt my bank and started over. I was disciplined, determined and - in time - consistently profitable.


How to Build a Betting Bank for Free

I couldn't afford to rebuild my betting bank by simply depositing more money into Betfair.

At the time, I was eBay trading for a living which was covering my mortgage, but not much more than that. I wasn't at all comfortable with putting more money into something which had just burned through my bank!

My cousin mentioned that she had been making money from matched betting. I searched online for matched betting sites, signed up to Bonus Bagging and had covered the £30 or so cost within a couple of days. All my profit from that point on was free!

Within a few months, I had made more than £1,000 with very little risk and that was enough to start thinking about Betfair trading again.

These days, there are a number of websites which explain how to take advantage of the best matched betting offers. You can find plenty of advice online for free, but for the sake of a small amount of money (which you'll make back very quickly) it's worth joining one of the services.


Managing Your Bank

Whether you're aiming to trade full-time at some point in the future or simply enjoy a second income, it is important to keep your bank safe.

Without a bank you cannot bet or trade at all, so don't skip this section!

Firstly, separate your betting bank completely from all other funds. As I said right at the beginning, it is an amount of money set aside for the purposes of betting and/or trading and it's much easier to keep track of when held in a different account.

Most new traders simply deposit their entire betting bank into Betfair, but don't do that! While it's rare to get your account hacked, cyber crime is becoming more of a threat.

In January 2017, a Goal Profits member had his entire Betfair balance wiped out! Luckily for him, he had been sensible and didn't have all of his funds in Betfair which meant it wasn't a devastating blow, but still a huge setback.

There have also been cases where bookies have gone bust and taken account deposits with them.

You're only ever going to be trading with a small proportion of your bank, so you don't need it all sitting there. With a smaller balance, you'll be less tempted to chase losses too and that's very helpful for inexperienced traders.

No online bookmaker or betting exchange should be holding your entire bank at any time.

Skrill offer a 100% guarantee for online funds and it is a great way to keep your bank safe. In the unlikely event that you suffer a financial loss as a direct result of unauthorised access to your account, Skrill will reimburse you in full provided you have met their common sense security requirements.

That gives you fantastic peace of mind, plus most bookies and exchanges accept Skrill as a mean to deposit and withdraw funds. This is expecially useful if you're matched betting and you need to move money about quickly.

It's also a good idea to hold some funds in Matchbook and Smarkets in case Betfair suffers an outage and you need to trade out quickly.


Online Password Security

We all know that we should use a completely different password for every website, but I bet that most people still use their dog's name and year of birth, just like Harry Redknapp and his offshore bank account.

For many years, I used the same username and password for all bookies and betting exchanges because... well... it was easy.

However, if someone had found out my Betfair password, they'd also have been able to access all my online bookmaker accounts!

As my football betting bank continued to grow (and more hacking stories hit the news headlines) I became more concerned about being compromised. I followed a friend's advice and installed LastPass.

I now have a different username and password for every single website and I can access them on my main PC, laptop or phone. Not simple passwords like "Rosie47" either, but "Fjap85%dJ2£hJ3lP". Try guessing that one!

Lastpass was dead easy to set up, in fact it asked me if I wanted it to automatically change the passwords on sites such as Facebook, Twitter and Instagram. Yes please!

It takes all the hard work out of password security and it's free! Even the paid version is only $2 per month.

LastPass is an absolute no-brainer, click here and spend an hour securing all of your accounts.


Betfair Two-Step Authentication

Betfair offers "Two-Step Authentication" and you should absolutely use it. When logging in, you will also be asked to enter a one-time code which will be sent to your phone or displayed by the Google Authenticator app.

If someone is able to find out your username and password - perhaps you leave LastPass open on your computer - then they still won't be able to access your Betfair account without also taking your phone.

Many online bookmakers and betting exchanges offer two-step authentication and the even more secure two-factor authentication (2FA). Use it with every website you possibly can and sleep easy.


How to Calculate Your Stakes

Ok... now we've looked at setting up your bank and keeping it secure, let's turn our attention to another aspect of bank management.

One of the most common questions asked by new traders is, "how much should I stake on each trade?". There is no simple answer because everyone has their own risk/reward levels, but if you're new to football trading then it would be difficult to stake too little.

Just £2.74 profit every day for a year adds up to £1,000 so you certainly don't need to go crazy. On the other hand, if you stake too much you could hit a bad run and blow your bank, so you definitely need to avoid that!

I suggest dividing your bank into 100pts and that will set the value of 1 point.

For example, a bank of £1,000 is 1,000/100 = £10 per point. For a £500 bank, 1 point works out to be £5 and for a £5,000 bank it's £50 per point. Of course, if the value of 1 point feels too high then you can divide your bank into 150 points, 200 points or even more until you're more comfortable with larger amounts.

This is a very simple and straightforward way to stake the correct amount and you can reset it at the beginning of each month so that your stake size rises and falls in line with your bank. When your bank is rising, think very carefully about increasing stakes and do it in small increments. Be cautious.

In order to protect your bank as much as possible, don't risk more than 1 point on a single bet or trade:

  • Back stakes - For back bets you can either use a 1pt stake or adjust the amount so that the potential profit is 1pt. The second option is quite handy as it means you stake less on higher risk bets, which makes sense.
  • Lay stakes - Lay bets work differently in that you must make sure the liability is no more than your maximum loss limit. If the price is under 2.00 you will be able to stake more than 1pt if you wish and still have the maximum loss under control. However, it is similar to a back price being above 2.00 in that it is higher risk.
  • Trading stakes - Trades are different again, in that your maximum risk may be more than 1pt. This is because for many strategies, such as correct score trades, the potential profit is that much more. In many cases, it makes sense to use smaller stakes. You may divide your bank by 100 when placing a bet, but by 200 when trading.

It makes sense to be flexible so that you are always comfortable with the risk/reward.

It is vital that losses do not dent your bank. They're always going to happen, but they should always be manageable amounts. Trade with discipline and chip away at your longer-term profit targets.

If you’re sweating on a late goal, then you’re staking too much.


Staking Plans for Football

Here are some of the more popular staking plans you will come across:

  • Fixed stake – this is where you place the same size stake on each bet, also known as 'level staking'. It is the benchmark to use when testing a new betting system to see if it is profitable or not.
  • Fixed profits staking – this is where you vary your stake dependent on the odds of the selection. It is used to standardise profit so that if the bet wins, the profit remains the same.
  • Percentage staking – this is the one that I have already explained to you, whereby you divide your bank into points. The stake size is a fixed percentage of the bank. A step further for this is by combining it with the 'Kelly Criterion' which optimises stake size in relation to the odds and the perceived edge the system has. Kelly itself is a hybrid of fixed profits and percentage staking.
  • Progressive staking plan – this involves increasing or decreasing your stake size after each bet, depending on whether the previous bet won or lost. The idea is to regain losses more quickly or enhance gains when on a winning run. The 'Martingale' and 'Pyramid' systems are in this band of loss chasers. Do not get sucked in! A run of losses will mean stakes of four figures very quickly and is a certain bank buster.

A common mistake for inexperienced traders is to believe that doubling their stake after a loss will get them out of trouble. That may happen sometimes, but it only takes one losing run to blow a bank.

The mathematical principles behind such 'loss recovery' staking plans as Martingale do not add up and they are extremely dangerous. For example, if you stake £10 per bet and double that stake after each loss, by the time you get to 10 losses in a row you will be staking more than £5,000 just to get your original £10 back. That's insanity!

You don't think that it's possible to hit 10 losses in a row? I've been doing this a very long time and I absolutely guarantee that long losing runs happen from time to time.

Stick with simple, sensible staking and concentrate on your long-term profit target.


The Power of Compounding

If you make 10 points profit each month, you will be a very successful football trader.

How? It's called 'compounding' and this is exactly how it works:

  • Month 1: You start with a bank of £1,000 and divide it into 100pts. The value of 1pt is £10 and when you hit your target of 10pts profit by the end of the month, your bank stands at £1,100.
  • Month 2: You once again divide your bank into 100pts which means that now the value of 1pt is £11. You hit your 10pts profit target again and your bank stands at £1,210.
  • Month 3: 1pt is now worth £12.10 and hitting your 10pts profit target grows your bank to £1,331.
  • Month 4: 1pt is worth £13.31 and your bank grows to £1,464.10 when you hit your profit target of 10pts.

And so it continues, month after month...

  • Year 1: By the time you reach the end of year one, your £1,000 bank has become £3,138.43
  • Year 2: At the end of year two it is up to £9,849.73
  • Year 3: After just three years, your £1,000 bank has now grown into £30,912.68

That's incredible bank growth, yet 10pts profit per month is a very achievable amount working out at roughly 0.33pt per day. If you have a £1,000 trading bank, that's just £3.30!

Of course, nobody wants to trade every day and there will be days on which there are no trades strong enough to risk money on, so let's assume you trade on a Friday, Saturday, Sunday and one midweek evening too. In order to make 10pts profit each month, you need to make an average of 0.63pt each time you trade.

So £6.30 profit, 4 days per week from a £1,000 bank... do you think you can do that?

At Goal Profits, we show you exactly how to do it.

Your biggest enemy is impatience. Stick to 10pts per month and don't be tempted to push your luck. If you give in to temptation, you may well spiral out of control and blow your bank. Don't do it.


Compounding Your Betting Bank

Now that you know about the power of compounding, let's have some fun!

You can plan exactly how long it will take to become a millionaire, or when you will be able to retire. It's all in the numbers.

If I were to invest £20,000 into some sort of fund which paid 8% interest annually, I would have £43,178 after 10 years, £93,219 after 20 years, £201,253 after 30 years and so on.

That's a pretty good return for doing absolutely nothing.

But get this... if I were to add £5,000 to my fund at the end of each year from football trading profits, then the returns accelerate incredibly.

After just 15 years and a month or two I'd have my £200,000 - that's half the time!

£5,000 annual profit from trading is 10pts per month from a bank of £4,000 or so and not out of reach for any Goal Profits member.

Yes... it will take time to get there if you're just starting out, but boy is it worth the effort!

When you look at those sort of numbers, it makes you wonder why on earth so many lack patience and quit. They're so desperate to make big profits from day one, put pressure on their banks and end up blowing the lot. It's insane.

Just make 10pts profit per month and the rest will take care of itself.


Is Betting Tax-Free?

At the time of writing, it is my understanding that you do not have to pay tax on betting winnings in the UK.

If betting winnings were taxable, then HMRC would also have to allow tax write-offs for betting losses. This would result in negative tax revenue, in other words it would cost the government money rather than produce an income. So yes, betting is tax-free in the UK.

The UK government makes plenty of money from online betting tax which comes out of your Betfair commission. They also collect their share of corporation tax from bookmakers who report profits (the same as any large company in the UK).

Please note that I am not a tax expert or accountant and my views do not constitute advice or guidance.


Financial Freedom

You can achieve financial freedom... everyone can.

You don't need to get lucky and invest in the next Google or Facebook, all you need is some income and time. That's it. Einstein once declared that compound interest is the 'Eighth Wonder of the World' and he's absolutely right!

Thanks to football trading and sensible investing, I am well on the way to financial security and early retirement. I don't need to go into details, but I am mortgage-free and I have an investment portfolio which compounds by itself.

The beauty of trading football for a living is that you are in control. You have more time to spend enjoying life and more income to save and invest. You really couldn't ask for any more.

Once you build your trading bank beyond a certain point, however, the growth slows. You find yourself trading with a fairly small percentage of it while the rest sits around, gradually being eaten away by inflation. This is when you need to look at ways to put your bank to work in other ways so that it is continuing to grow.

How much is currently in your Betfair account? Is it £200? £500? £2,000?

What if your trading bank was worth £10,000... would you keep it all in Betfair?

Hopefully not! Apart from the obvious security issues, you will only be trading with a small percentage and the rest will doing nothing.

Say you have a £10,000 bank and you're trading at £100 per point. How much of your bank do you need in Betfair? £500? Even on a busy day you're not going to need that much, so you'll be quite comfortable. It leaves £9,500 to put to work.

Perhaps you put £1,500 in an instant access savings account, just in case you need it. That still leaves another £8,000.

You can look around at other investments, mainly safe and steady earners, so that your money is doing something.

Just think, if that £9,500 returns an average rate of 5% interest over the year, you've made £475 (4.75pts) just by being smarter than the average football trader and that's what it's all about; taking advantage wherever you possibly can.

Whatever you choose to invest in, do something. Rather than have money laying around doing nothing, put it to work.

Even if it grows at 5% per year, then 5% on top of that, 5% again and so on, you will have the compounding benefit working for you and the growth will accelerate for no extra effort.

Financial freedom is well within reach.


The Master of Compounding

Warren Buffett left college with $9,800 to his name and became the richest man in the world through compounding. He then made the largest charitable donation in human history, which was quite remarkable!

After working (and saving) in New York City, he went home to Omaha, Nebraska with $127,000. Buffett figured that he could live well in Omaha on $12,000 per year and he was confident that he could make that much each year from his $127,000 of capital, then get rich on the compound interest.

It's the same for Betfair traders. We trade for income, but it's the rest of the bank which is going to provide true financial freedom.

The documentary "Becoming Warren Buffett" highlights the power of compounding. He explains that, "the biggest thing about making money is time. You don't have to be particularly smart, you just have to be patient. Susie didn't want to wait as much as I did, but she never quite appreciated compounding like I did."

I've watched this documentray at least a dozen times... it's fantastic!


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3 Comments

  1. Thanks for Sharing Steve – Bank Management in my opinion is as hard to crack as discipline, however once you have cracked it then it helps to keep on top of those losing streaks. Excellent article – hope everyone reads it

  2. Great Read Steve, tracking results was my weakness for a long time, when I accepted the admin side of it was as important as the trading itself I was able to analyse where I was going wrong and make adjustments….

  3. very informative post thank you.i am just starting out with trading as i was match betting for a while made some good cash that is funding my betting now but would like to learn more have tried a few different things the main one is lay under 1.5 goals and back over 1.5 goals plus scalp the the draw i have done 27 like this and lost 5 got out too early on 1 off them and got in too late on the other(i give my self first half then trade out so 45 min maybe thinking of going to 60 min) seems to be working

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