Tuesday, February 13, 2007

Going full time on Betfair

No, not me! But as I didn't get round to trading yesterday I thought I'd take the time today to answer a question I get asked all the time. It's also one that pops up on the Betfair forums constantly so I'm hoping it's of interest. Basically it's the "going full time on Betfair" question. I often get asked if I've considered it and it seems every week someone on Betfair says they've been profitable for x number of months so shall they go full time? And is it really possible to make a living from Betfair?

Firstly yes. Of course it's possible to make a living from Betfair. My own results show that even messing around with £1k can provide consistent if small profits. Those playing with larger sums could - and do - make a lot more. But it's not that I want to concentrate on today. Instead I'm going to look at the decision making process and consequences of going full time. Afterall, just because something is possible it doesn't mean it's the right thing to do! The subject is something I've covered before in answers to questions in the various comments left on the blog but I thought it would be interesting to pull it all together in one place. And explain what my considerations would be if I were to go full time.

Existing life / Society's perceptions / Impact on close family
Is what you have now really that bad? I mean do you really want become a full time gambler? Would it really be an improvement on the status quo? Just take a moment to consider how society views gamblers. No really. Just have a think about it. Maybe you remember the last time you laughed at the old git with nicotine stained fingers tossing away another losing slip in your local bookie? Or perhaps recall reading in a newspaper about a suicide caused by a failed gambler running up massive credit card debts in secret? OK. So that isn't you right? Fair enough. But rightly or wrongly these are the kind of images that help shape the general public's perception of gamblers. Mainstream society's view isn't a rosey one. Gamblers are losers. And this image will impact on you if you take the plunge.

Some examples. What will be the response if you try and get a mortgage and give your occupation as full time gambler? (I found it hard enough when I first started working for myself and didn't have two years of accounts!). Or maybe want some HP to buy a new car. What will your friends and family think? Or your wife / partner? Will they really be comfortable and happy if you jack in a job to gamble for a living? And what if you give up a job, don't make it and try to go back to standard employment. How are you going to explain that gap? Unless you lie can you think of any industry that will embrace a (failed) gambler more than someone who is equally competent but without the Walter Mitty belief that they can give up everything to make a living from betting on sports? You may as well tattoo the word Mug on your forehead before you get to the interview!

Ok. So it's all a bit doom and gloom. Deliberately so. But society's perception of gamblers is an important background consideration. Let's say you can get over that though. You'd rather make gambling your job than an enjoyable hobby. You have a supportive network of friends and family. Maybe you hate your job and want a change. Or don't have one to start with. You've made the decision to go full time. So what are the other issues you will face?

Discipline and stress
So we'll take it for granted that you've had the method and discipline to win constantly on Betfair and this has helped colour your decision to consider going full time. The question is can you maintain that discipline under conditions of increased stress? This is something I often ask myself when people query why I don't go full time. Sure I have a winning history on Betfair. And not one that just stretches back a few months. However, this winning history has been produced under circumstances where it doesn't really matter if I win or not. I'm lucky enough to work for myself from home, run my own gambling related business, and trading is my hobby. Make it my living and suddenly everything gets a little more stressful. The sums involved rise dramatically. Results suddenly count for more. I have to win. Because I have to pay the mortgage, find the money for a new bathroom, pay the bills. Some even have to pay for a wedding!

Now I'd like to think I would maintain my discipline. Not panic if I had a losing week. I've never really attached any real importance to results on a day by day basis preferring to take the longer term picture into account. But what if I lost two weeks in a row? And suddenly something big went wrong with the car. And a holiday still needed paying for. I wonder if I'd still have the discipline to stick to my money management rules. Or would I be tempted to chase in order to try and make the money I know I need? How would you react? Chase and get it wrong and you could wipe out. You wouldn't be the first or last. And then that's it. Game over. Thanks for playing. All your base are belong to us!

Of course, that's a doomsday scenario. The increased stress of having to win can be minimised through planning. Fail to prepare and prepare to fail and all that. Don't set daily targets. Look at the longer picture. A losing week shouldn't matter. Most importantly of all though if I ever went full time I'd want a considerable reserve of available funds incase things don't go to plan. This would take the pressure off me somewhat. Reduce the need for instant returns. And enable me to concentrate on the longer term big picture and hopefully maintain discipline as a result.

Betting / Trading can be boring
It's true. Gambling isn't always the glamorous life it's cracked up to be! I get bored with it sometimes and I only trade part-time. The danger, of course, is boredom can lead to lack of discipline.

Perhaps more importantly though is the lifestyle change going full time can make. Although I haven't gone full time the point I'm getting at is something I have had experience of. Give up your job to sit infront of your tv and computer at home all day and you suddenly realise quite how much you appreciated the social interaction you got at work! I went from being a tabloid reporter, to a senior position in a leading online music PR company in the dot com boom that promoted some of the planet's biggest stars - with the endless invites and parties it entailed - to sitting at home with my laptop. Alone. Just like that. Overnight. I'll tell you now it was a shock. Sure I could still go out. But it was hard to adapt and get used to the change. I missed the daily chit chat, the gossip, the banter. The Christmas parties!! To put it simply, sitting home alone was bloody dull in comparison. And I started putting on weight!

Sure, there are answers to all these issues. You could chat with other full timers. Make extra effort to get out and interact. Make sure you excercise (vastly underrated when it comes to keeping a fit, clear and disciplined mind when trading), The point though is these are the kind of issues I'd anticipate if I was to go full time. It makes sense to plan for them in advance. It's all part of being prepared, organized and disciplined.

The future of exchanges, online gambling, in running betting and taxation
Every great empire has come to an end. Every new gadget becomes obsolete. The betting industry is no different. Remember the 90s when spread betting firms were the future of betting?! Exchanges replaced them. But it doesn't mean they will remain as popular for ever. And as popularity declines, so will liquidity, and with it your profit. Of course, I don't see an immediate decline. Exchanges are just such a fantastic idea. But would you risk your future on them? Are you really confident that what you do now would be possible in ten years? When, if you'd stuck at your job, you'd have had several promotions and pay rises? Which decision now looks best in the long run?

Something to consider. Last year millions of Americans played poker online daily. How many do today? 1% of that? Central government can kill an industry overnight if it chooses. And in the process wipe out your livelihood. Sure, the UK government is making encouraging noises on the betting industry. But policies can change. It took Labour less than a decade to switch from a policy of unilateral nuclear disarmament to embracing the nuclear deterrent. Now the question is not what to do with Trident but what to replace it with. Sure, in the UK at least, where the issue of government income from gaming revenue is settled, it's unlikely any turn around would cut off your livelihood. But when making life changing decision such as becoming a full time gambler such risks have to be considered.

There are two other issues that I think about when asked why I haven't gone full time. In running betting and taxation. I make my money as a trader from in running betting. I have a standard Sky set up and I use some trading software. Nothing out of the ordinary then. But it doesn't mean I don't worry about the future of in running betting. What if the Gambling Commission, or similar body, decided that because some people's pictures are delayed more than others they will level the field by banning in running betting? I'd be screwed! Now as unlikley as I think something like this happening is it doesn't mean it won't. And it doesn't mean I don't worry when UK newspapers run junk stories about people getting ripped off because shrewdies are beating the Betfair clock.

As for taxation on winnings - the subject is huge! And I don't intend to go through it all here. I've seen the Inland Revenue website, I have my accountant's advice and I follow it. But what's to say in a few years a distinction won't be made between say recreational and professional gamblers? With professional gamblers - however such a thing is defined - liable to pay income tax. Suddenly a large advantage of gambling for a living disappears. And you have to make a minimum of 30% - and more likely 40% more - just to keep your income level. And don't think you'll just glide under the radar either. If you disappear from view in the tax man's eyes you will get a letter asking what you are doing. Just check the relevant threads on the Betfair forums for proof!

Just because your profitable method works now...
...It doesn't mean it always will. I always give the same example for this. Because it's a good one. It involves a guy who was in the 0.7% of Betfair users who was making over £15k a year profit on exchange last time the figures were released. Relatively speaking he was a big winner. Betfair valued his business so much he had his own personal account manager. Life was good - until he lost the lot. And then ran up enormous debts maxing out credit cards in an effort to chase his losses. His mistake? Failing to adapt. His edge disappeared. He eventually realised. But couldn't replace it. So started betting blindly hoping for luck. He went from big winner to big loser to Gamblers Anonymous. All within a year or so.

Read The Story of Ster in his own words.

I read that page often. Because I know I've had edges in markets in the past that have been eroded. Fortunately I've so far managed to find replacements. But the time I don't is the time I'll stop winning anywhere near as consistently as I'm lucky enough to do so at present. Now I've no idea when that will be. If ever. But one thing I do know is it would make me think twice before giving everything up to become a full time gambler. I've seen my edges disappear in the past. I'd be negligent to think it won't happen again.

One more thought in this area. Going full time for me would mean a large increase in stakes. This wouldn't only have a psycological impact that would need addressing. But, of course, I'd want to actually check the methods I get away with using now would actually work with ten times the stake. It's obvious. But easy to overlook. And I can see now that some strategies wouldn't.

Loss of benefits
Pretty straightforward this one. If, like me, you're self employed, or a full timer on Betfair, you don't get benefits such as proper sick pay, holiday pay or maternity pay. Nothing. A serious illness could be financially devastating and again illustrates the importance of having a healthy sum of money behind you before you start. As well as obviously making it a no brainer to have some kind of insurance in place for if you do fall ill.

Well, reading through all that it's both longer than I thought it would be (sorry!) and all a little negative too. I don't mean to put people off. There's plenty of people out there who are full time making large sums of money from Betfair and they have my respect and good wishes. Besides which we're all adults and are perfectly capable of making our own decisions anyway.

But as the going full time on Betfair question is asked so frequently I hope it's of some use that I've outlined some of the considerations I have been through when mulling the question over. I'm lucky in that I'm in an unusual position that would make it relatively easy for me to make the step but still I have resisted it. Those who do take it will need to be prepared, organised and disciplined. They'll need to cope with changes in their lifestyle, be happy with being viewed somewhat as an outsider, and hope factors out of their control, such as legislation, don't interfere adversely.

Which all leads me to believe that yes it is possible to go full time on Betfair and make a good living. Of course it is. A killing even. But I'm not sure it's something I'd want to do. And if I were to it is something I would approach with a relatively short time frame in mind. Get in. Make my money, invest it wisely as I go along, and get out. Or at least be ready to get out quickly if circumstances change. I don't know. Maybe I don't crave the title of "full timer" as many on Betfair seem to. Maybe I just don't have the bottle. Or feel I have too much to lose by trying it. But it just always seems to me that if you're winning with a hobby you need a pretty good reason not to just increase your stakes overtime in relation to your bank and continue with multiple income streams. And this is probably the route I'll take.

That said, the very best of luck to any of you that decide to go for it....


Mark Iverson said...

Great Post BT,

You've addressed alot of the topics I tend to hide away from - the dream of a tax free income, working from home, watching sport and being your own boss is something which although possible, wouldn't come easily and without sacrifices.

All the best,

Mark Iverson

The Sports Trader said...

Hi BT,
A very good post but you are making me consider going back to work. I think your post should be pinned to the top of the Betfair Forum so all wannabe full timers can have a reality check before making a decision that many will later regret. As you know I started out as a part timer but due to some pretty serious personal problems I had to leave my business and had little option but to make my hobby my new full time job. I consider myself very lucky in making that transition and continuing to support my family. The key to succeeding here is to stay disciplined but also to continually evolve your trading strategies as the market developes.
Good Luck with your trading.

Ian said...

Suberb post, I regularly read your posts and find them very educational. I am due to be made redundant in 10 weeks and I think it is an opportunity to take a break from Full Time Employment. I subscribe to Bet Trader Pro and trade almost exclusively on Horses pre race in the standard way that Adam describes. I think I have a good understanding of the strategy.

You raise some points in this post that I had not considered, and will now take on board.

My short to medium term plan is to do some travelling with my fiance, around Europe, taking advantage of the cheap flights that are available. I will use a bankroll of about £4-5K and stay in budget hotels moving around every week or so. The object being to cover my expenses as I go, by trading from wherever I am either in Internet Cafes or using wireless connections and my laptop. I really do believe I can regularly turnover £100+ each day and the travelling idea deals with some of the boredom issues that you cover in your post.

PS. Good Luck with the wedding etc.


The Betfair Trader said...

Cheers for the comments guys. And sorry it was all so negtive! It's just basically a list of the issues I've considered.

Ray> Spot on about the key to success. Bet you're just wishing you had the opportunity to put it all into action properly with all these cancelled meets at the moment!

Ian> Good for you. And the best of luck. What you describe is definitely possible. From memory I believe Adam from Racing Traders did something similar. Travelling and trading I mean. And the travelling side of it will certainly help stave of the boredom. Enjoy!!

Brian Coplin said...

Great article and the many of the reasons you detail are why I have yet to go full time. People at work don't understand why I don't go full time. My main reason are I would miss the social interaction, the additional pressure and why break something if it is working.

If I manage to hit my target and be mortgageless at the end of the year then I may decide to take a less stressful job and one with hours that support my gambling.

Simon said...

I think you've hit the nail on the head here, going "full-time" isn't the party it's made out to be. Ok, so you don't have to get up at 6 every morning, but there are more than just the constant winnings you need to think about. Great piece

robin said...

Very good article, particularly the bit about government legislation. I would see that as the main threat - that a future tory government may crack down on betting to some extent.
There are downsides to being a pro gambler but its not all doom and gloom. I bet (on tennis) all throughout my university days and just went pro on Betfair as soon as i graduated in 2004 without ever having a proper job. Ive since had about 3 years of very decent profits and have just been approved for a mortgage on my first house (after providing Betfair P&L statements). Every day i remind myself how lucky i am to be able to get up whenever i feel like and watch sport for a living.

Anonymous said...

Honestly speaking, I do not feel this thread is negative, its the reverse of. Reality must be dealt with in order to succeed, and although a harsh reality it is none the less, factual. This thread should be seen by all those wishing to trade full time. Its stessful enough being a full time stockbroker/trader in full time employment being paid each month without going alone, burnout comes quickly to many. I know this thread is dated last year but such threads deserve to be kept alive especially when the information contained is still very true. Excellent, truthfull information.