You’ve probably heard of a book called Rich Dad, Poor Dad by Robert Kiyosaki, which is about a man who has two dads – one of whom is rich, and the other, poor. The idea is that the fathers taught him lessons about how to build wealth over the course of your life.
What does this have to do with gambling?
The idea behind this “Rich Gambler, Poor Gambler” post is to compare and contrast the behaviors you’ll see in rich gamblers as opposed to the behaviors you’ll see from poor gamblers.
The Two Emotions to Avoid in Gambling Are Fear and Greed
You’ve certainly heard the expression that scared money always loses, right?
Getting greedy is always a bad idea, too.
I submit that these two qualities are anathema to getting rich as a gambler. It doesn’t take a long time to figure this out, but let’s look at some examples:
Suppose you’re a fearful gambler, and you’re playing Texas holdem for real money. You get pocket kings and raise with them preflop. A player behind you re-raises, and a third player goes all-in.
Most of the time, you should go ahead and get your money into the pot preflop here. The only exception would be if you know your opponent well enough that you’re SURE he has aces.
A scared player, though, might fold those kings. That’s a losing move at almost any Texas holdem table.
Let’s think about a greedy gambler.
He’s gone to the casino, and he’s decided to play slots. He wins $6000 within his first 15 minutes at the casino. He decides to pocket $600 of that money, and he wants to parlay the rest of it into $10,000.
He’s being greedy. It’s okay to keep some of your winnings in play, but in this situation, it’s so much smarter to cash out a greater than 10% amount.
A gambler who isn’t greedy would be likelier to call it a day, but even if he didn’t, he might cash out 90% of it and try to parlay the remaining 10% into the $10,000 he’s hoping for.
Once he loses that $600, you can bet he’ll take the other $5400 in profit home with him.
Fearful gamblers make bad decisions because of their fear.
Greedy gamblers make bad decisions because of their greed.
Either way, rich gamblers make good decisions consistently and repeatedly. That might not be how they go rich, but it’s how they stay rich.
Wise Casino Choices Versus Foolish Ones
Suppose you win some money at the casino. What do you do with it?
One wise decision would be to continue to gamble with those winnings – but only if you’re gambling with a positive expectation. In other words, a wise choice would be to use it to fund your card counting career at the blackjack tables or to use it to bankroll your play in a poker tournament.
Both those examples assume that you’re good at it, too. Being a lousy blackjack player is a losing proposition. So is being a lousy poker player.
And most gamblers don’t even know for sure which category they fall into. If you’re not keeping records, I’d suggest that confirmation bias might be making you think you’re more successful at gambling than you think.
That’s not how rich gamblers do it – not if they want to stay rich.
Poor gamblers, on the other hand, will blow their winnings on stuff that doesn’t last. They might blow it on games where they have a negative expectation, which is the most common strategy for poor gamblers.
Even if they don’t blow the rest of their money on slot machines or some other high-negative-expectation bet, they’re liable to blow it on stuff that doesn’t last. It’s easy to spend a fortune at a casino buffet, for example, but rich gamblers will try to get that comped instead of paying for it with their gambling winnings.
Rich Gamblers Save Money
When I saw that rich gamblers save money, I don’t just mean they look for discounts on their airfare, car rentals, and lodging. They also set aside money as part of a regular savings plan.
You’ll see some simple gambling advice repeated ad nauseam. One of these pieces of advice is that you should never gamble money you can’t afford to lose.
And this means you should be saving consistently, out of every paycheck. It doesn’t matter if you’re contributing to a company’s 401k plan or through some kind of IRA, you need to be saving money for your retirement.
Rich Gamblers Are Constantly Learning
Sure, it doesn’t take much to learn how to count cards in blackjack. Learning to play poker well doesn’t take long, either.
But if you want to take things to the next level and get rich gambling, you need to learn more than just the basics. Blackjack changes from time to time. New advantage techniques are discovered, and it’s up to you to stay abreast of these new strategies.
Poker changes less often, but it’s still worth investing in ongoing learning as a poker player. This might mean reading poker books you’ve never read before, but you might also spend some money on poker coaching or even poker classes.
Here’s the sad truth:
Only the top 5% of poker players win consistently. The rest are losing money slowly but surely.
You’d think that the percentage would be higher than that, but you have to keep in mind that most poker players are playing in raked games.
An average player in a game with no rake would break even over time, but if you’re just average at a table where 5% of the pot evaporates before it’s won, you’re going to lose money steadily.
You have to be good enough to beat the other players by so much that the rake becomes just another detail.
Assets Versus Liabilities
One of the distinctions Kiyosaki makes in his book is the difference between assets and liabilities.
Assets are things you buy that earn income over time. Liabilities are things you buy that cost money over time.
Here’s a classic example:
Buying shares of stock in the stock market overall should offer you a roughly 8% to 10% return over the long run.
Buying a new car should offer you depreciation of 20% the minute you drive it off the lot. The value of that vehicle will depreciate as long as you drive it.
The stock market shares are assets. The car is a liability.
What does this distinction have to do with gambling? It’s all about mindset.
On the other hand, if you buy a course on how to win at slot machines, you’re out the cash for the course. But you’re also going to lose all that money playing the slot machines over the long run. The slots are a perfect example of a game you can’t win.
You can even use this distinction to look at your bets. A bet at the blackjack or poker table might be an asset (if it has a positive expectation), but a bet on a slot machine is always a liability.
Creating Your Want and Don’t Want List
Kiyosaki suggests creating a list of things you want and when you want them. He also suggests creating a list of things you don’t want.
Gamblers can and should do this, too.
It’s called “goal setting.”
And if you’ve ever taken a class in goal setting, the first thing you probably learned was that your goals need to be written down to be effective.
Do you want to be a rich gambler or a poor gambler?
If you want to be a rich gambler, the key is having the right mindset. Start thinking in terms of what you want and don’t want. Think in terms of assets and liabilities.
Avoid fear and greed, and remember that succeeding in gambling has more to do with making better quality decisions than it does with winning money. Get the decisions right, and the money will come.