Here I was on Sunday night, about 11pm, scrolling through my transaction history and getting ill. Since Friday evening, I lost $347. Was not the evening out or concert tickets. I’ve put my money where my mouth is and seen it all go down the drain in sports betting over the course of what seems like about 23 different bets, all of which were good at the time.

The thing is, I felt I was being strategic about this until it got really embarrassing.

How I Got Here

The winner of my buddy Jake’s attention was the wins. Screenshots constantly. Made $215 on one game,” or “easiest $380 I ever made. My first couple wagers were the first to pay off. Won $85 on some Thursday basketball game then won $62 the next weekend. Without any proof whatsoever my mind said “oh cool, I’m good at this apparently”.

That Specific Weekend

Started out fine. I had decided that I would pay up to $150. The rules I had were simple; I only wagered on sports that I followed, I kept my per-game wagers under $30, and when my total losses reached $300, I stopped.

Saturday at 4pm, I had broken all the rules.

Commenced on a losing streak. Bet $40 on the early soccer match that turned sour. I did not accept it and I threw $60 at another game straight away in order to “recover faster. Lost that too. On Saturday night my money was in the red by $197, and I was throwing pretty crazy wagers on sporting events I couldn’t even explain. Rugby matches. Handball tournaments. I once placed a wager on cricket at 2:47 am in the morning and I really don’t know the rules of cricket.

It seemed that Sunday somehow went sour. Rising to make two careful bets to get back up. After paying $150 more for the use of my bed, I went to sleep.

What Actually Sank In

I’m terrible at emotional bookkeeping.

As soon as that first $85 came through my account, I mentally put it in the “betting winnings” category as if it was a different type of money. I was telling myself all the time “only down $197 in betting cash” as though it were different from regular dollars. However, money is money. The mental category does not matter actually.

It is all around me now. Even though Sarah is $4,100 in credit card debt at 19.8%, she got a $3,200 tax refund in April and went out on a spending spree, purchasing a new TV and taking a trip. I said, “Well the refund was bonus money. But in fact it was not.

This One Percent Thing I Wish Someone Had Told Me

I blew it and I did some research. I stumbled on this principle known as the 1%.

Pretty much is that you never wager more than 1% of your total funds on any one bet. If you are allotting $500 towards this, then your maximum bet allowance is $500. The first thing that came to my mind was “why bother, for an 8 to 1 win on a 5 to 1 bet?

However, I overlooked the obvious. You’re gonna lose. Much more frequently than you want to think.

I did actually do the math of what happened when I was going to do the 1% approach when I had my disaster weekend. My $150 would have been my starting sum, with the max bet being $1.50. If I had to lose a hundred straight bets, it would be impossible mathematically in 48 hours. Rather, I was dropping down $40 to $75 per bet and if I made just five bad calls, I would end up losing my entire bankroll.

The math is simple. Most people who play games for fun win 47-53% of their bets. With 55% just above average, you still lose nearly half the time. String together a normal losing streak, and you’re completely destroyed if your bet sizes are too large.

Your Brain Is Actively Working Against You

I have had a lot of thoughts about the bad choices I have obviously made. I’m not dumb. I can do math. What the FUCK just happened?

So, there are some brain worms in our midst when it comes to probability. This recency bias effect comes into play where recent events seem to be more significant than they actually are. I had been getting a few lucky punts at first, and my brain just said, “I have a skill here.At first I had been getting a few lucky punts and my brain just said, “I have a skill here. Wins were a sign of talent to Wins. There was a sense that it was bad luck.

There’s the gambler’s fallacy, too. I lost 3 consecutive bets on Saturday afternoon and after that I thought, “okay, I am so due for a win now. As if the universe was keeping an eye out and waiting for my record to be broken and it was his turn to be the first one to do it. However, no individual bet is connected to any other bet. A coin does not “recall” the previous 5 heads.

The sneakiest: loss aversion. It hurts twice as bad psychologically if you lose $100 as it feels good to win $100. When you’re short of cash, you send your brain into panic mode, and make larger, stupider wagers to avoid that miserable feeling. This is exactly what you should NOT do!

How I Approach This Now

I continue to gamble a little from time to time. Maybe twice monthly. But my method is different these days,

I have a separate account where I have $200. I’m made from my own money and I don’t pour any more in. If I somehow lose everything I’m just done, till I save another two hundred dollars. I’ll never gamble more than 1%, so I’m sticking with that. I document everything, dates, times, sports, bets, pays, etc. in a spreadsheet.

Interested in what I’ve discovered? I’m $47 down in the last 8 months. This comes up to $5.87 per month for entertainment. The cost of less than one movie ticket. And I haven’t had even one weekend where I felt that nauseating pit in my stomach about money I’d lost.

However the actual lesson was not a betting one. Further exploration of my own ideas of risk in general. The next time I am in a situation where I need to make a choice that there is some uncertainty involved, and money is involved, I ask myself, “Am I thinking clearly right now, or am I falling into one of those documented brain traps?”

I still find myself sometimes falling into the stupidity trap. Last week, I was nearly spending $150 on some cryptocurrency as it surged 23% in 3 days and my FOMO was out of control. But I paused and asked myself: is this really ‘smart’ or am I just looking for ‘recent performance’? The latter (definitely the second one).

The concept of risk is not so much about wagering or stocks or any given activity. Learn more about what your brain does and where it often goes astray. I don’t know about you, but that knowledge is priceless and is worth much more than 347 dollars.