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As a casino dealer I learned a lot about how to win big money.
The primary lesson?
Stay away from casinos and invest your money rather than gamble with it. Unlike with gambling, the odds are in your favor when investing.
But even in a casino you can increase your odds of a big score, and without risking much. For example, over the years I saw many people turn $50 into $1,000 or more, while other players had no chance of ever doing that.
What was the difference? It’s all about how they played, as I’ll explain in a moment…
The lesson goes well beyond blackjack and roulette. In fact, there are many areas of life where you can risk a little to win a lot.
But for our purposes I’ll stick to examples involving money, starting with those hopeful (and hopeless) casino gamblers…
How To Win Big At Roulette Or Blackjack
On American roulette wheels (which have a “0” and “00”). the house edge is 5.26%, meaning that, in the long run, you’ll lose about 5.26 cents for every dollar you bet.
So, for example, if you bet one dollar at a time on red or black (which pay “even money” or 1-to-1), you’ll win and lse, but on average you’ll be down 5.6 cents for each dollar bet.
That means that, for example, if you have a $50 bankroll, it will take an average of 950 spins to lose all your money ($50 divided by 5.6 cents).
I ran a fast table, squeezing in about 60 spins per hour. But even at that rate, a player betting a dollar at a time could expect $50 to last over 15 hours (950 divided by 60 equals 15.8).
And that’s exactly what some players did. They sat there endlessly, betting a dollar every spin on red, black, odd, or even (all the even-money payouts).
That’s great if you love the casino atmosphere and want to soak it up for as long as possible without losing much.
But since you can never win more than a dollar at a time, your ups and downs are limited, and even doubling your money is almost impossible.
On the other hand, if you bet “straight up” on a number, and win, you get paid 35-to-1, or $35 for each dollar bet.
A few lucky wins and you might soon have $100 or more in front of you.
Once you have $100, if you place four $5 bets straight-up on four numbers, each time you win you’ll make $160 ($175 on the winner minus the three losing $5 bets). Hit a few of those and you might build up to $1,000 in an hour or less.
Of course it’s more likely you’ll just lose your money faster and go home early.
But if you want the chance to win big, that’s what you have to try. You can’t sit there and bet a dollar at a time on even-money bets.
A similar strategy works for blackjack.
To turn a small bankroll into big winnings simply “parlay” early winnings into bigger and bigger bets. If you’re betting $5 per hand and start to win, bet $10, and then $25 per hand.
Many times I watched a player start out betting a dollar (we had very low limits when I worked as a blackjack dealer) and, after winning for a while, bet $5, $10, or even $100 per hand as he won more.
Note that either way you risk the same $50 (if you choose to quit once you lose that amount), but your only real chance to win big comes when you do one or both of the following:
- Make bets with bigger payouts
- Parlay winnings into bigger bets
Of course, in the long run those big wins will be eaten up by faster and more frequent losses, since the odds are almost always with the casino.
So enjoy your casino time if you must, but let’s also look at how to apply these principles in areas of life where the odds are with you…
Real Life Small Bets That Can Pay Off Big
What constitutes a “small” bet depends on your particular financial situation, but several of the following examples involve risking nothing more than a few minutes or hours of your time. For example…
Ask For A Raise – Yes, this is a really obvious example, but sometimes we need reminding. A raise of $1 per hour, after all, is worth $6,000 if you stay at your current job for another three years (3 years times 2,000 hours annually times a dollar).
That’s a decent payoff for the risk of a few hours of preparation followed by a few minutes talking to your boss.
Also, unless you’re really in love with your current work, you might risk an hour applying for a higher-paying job once in a while.
Maybe one of these small “bets” will result in a job that pays $3 per hour more than what you’re making.
That’s $9,000 extra over three years.
Bet On Cryptocurrencies – According to Fortune magazine, if you had invested $100 in Bitcoin in July of 2010, by 2017 your investment would have been worth $28.3 million by the end of 2017.
I think most of the 200 or so cryptocurrencies will eventually be worthless, but just in case I invested $200 in about 4 of them two years ago. My $200 investment is worth about $57 at the moment, but who knows what the future will bring?
Speculate With 5% Of Your Stock Portfolio – In his book “The Black Swan” Nassim Taleb, who became a millionaire one day when the stock market crashed and his long-shot options paid off, suggests a low-risk strategy for speculating in the stock market to possibly hit it big. It’s as simple as this: Leave most of your money in index funds and use just a small percentage to make long-shot bets.
Those speculative bets could include the next up-and-coming tech company. Or they could involve stock options, many of which can pay off at 100-to-1 or greater if the market moves the right way.
Think of it this way: In the worst case scenario, if you make a 7% return over the years from your mutual fund investments, and you lose all of your speculative money every year (that 5% of your portfolio that you “play” with), you’ll still be ahead over time — at least by a little bit..
But if a few of those small bets pay off big, well… Consider this: If you had invested $1,000 in Amazon when it went public in 1997, your investment would be worth than $1.2 million today.
Write A Book – I once spent a weekend writing a book on ultralight backpacking, and then published it on the Amazon Kindle platform. Total cost: $0. Now that’s a small low-risk bet, right?
The payoff> I made several thousand dollars in royalties. That’s not a huge win, but others have made millions with Kindle books (and I made many thousands more with other Kindle books, none of which took me more than a week to write).
For my first print publishing adventure I paid $500 to self-publish a book on how to get lucky (no longer in print), which made a few thousand dollars, got picked up by a Japanese publisher (they paid me a $2,000 advance), and later helped me land a contract (with a much bigger advance) for a book on weird ways to make money.
To keep the risk really low (at least the financial part), you can learn to do everything yourself through a “print-on-demand” service like Amazon Direct Publishing.
For less than $50 you can have physical copies in your hands and international exposure on Amazon’s website (my wife has done this and had four copies of her book in her hands for under $30).
Yes, the odds of creating a best seller are small, but if you do, the payoff could be huge, and the risk is so small that you can probably afford to keep trying over and over.
Start A Website Or Blog – You can risk a lot of money starting a blog or website, but you don’t have to. For less than $50 you can register a domain and cover your first few months of hosting, and there are even free options like WordPress and Blogger.com.
Okay, the risk is low, but what’s the potential win? Millions of dollars, in theory, but let’s consider a more modest example.
Years ago my brother owned a carpet cleaning company, so I bought him lunch ($20) and picked his brain on how to remove carpet stains of every type.
Then I spent $10 and one long weekend creating HowToRemoveCarpetStains.com.
The website may soon be gone due to falling traffic and revenue, but for years it produced over $1,000 per month — about $60,000 total so far.
That was with very little additional work after setting it up (I even look at it for months at a time). A $30 (and 50-hour) gamble for a $60,000 payoff.
Flip A Real Estate Contract – I’ve seen people lose tens of thousands of dollars trying to flip a house for a profit. Ouch! So how do you invest in real estate without risking more than a few hundred dollars, and still have a chance to make some serious money?
There are a number of ways to bet small and win big in real estate.
One way is flipping contracts instead of buying the real estate yourself. Essentially you hunt for a bargain fixer-upper, make an offer that includes the right to assign the contract, and then find another investor to whom you sell (assign) the contract.
You risk little or nothing if you include a small deposit ($100 to $500), and include contingency clauses in the contract that let you cancel the deal without cost.
For example, you might specify that your future “partner” (the investor to whom you sell the contract) must approve of the property within ten days.
The potential payoff?
Suppose you see a flip with a projected profit of $40,000. An investor might pay you $5,000 to take over your position, leaving him with a $35,000 profit. In other words, you risk $0 to $500 to make $5,000.
Of course, once you’ve done a few of those you can parlay your profits into a deal where you keep the property and get the entire profit from the flip.
Look For More Small-Risk, Large-Win Bets To Make
Want to find more opportunities to risk a little and win a lot? Look around, and keep asking:
- Is the risk here small?”
- Is the eventual profit potentially large?
If the answer to both questions is “yes,” you have an opportunity.
For example, in my article “6 Steps To Starting A Business With Absolutely No Money,” I list about two dozen businesses that you can start for nothing. The profits from any one of them could be parlayed into creating a bigger business, even one that eventually makes you rich.
Keep your eyes open and keep making those small bets. One of them (or several) might just result in a big win.
If you have your own experiences where a small bet paid off big time, please share them with us below … and keep on frugaling!