6 June 2007 No Comment Print This Post  Email This Post

What do you think of when you think of Vegas? Lights, glamour, excitement, and things you can’t talk about. A friend of mine is having a bachelor party in Vegas and a few other guys are taking off tomorrow for a week. Me, I decided to stay here. Actually, I knew the entire trip was going to cost at least $1000 including flight, room and board, “fun”, and gambling losses. I never really had a problem with gambling. When I first started to go to casinos, I was lucky enough to lose all the time. Thats right, I think its great that I lost $100-$300 every time I went to a casino in the past. When I bet on the NBA finals last year I lost every game for three games strait. Someone was looking out for me. Because of my past experience with casinos and gambling, it helped make me a more cautious investor and not a gambler.

I recently read an article over a Young Money about student gambling. It talks about the nightly poker games on college campuses and how students can lose up to $1500 in one night. If you work part time, thats your whole month’s pay! The worst thing you can do is to start gambling young, but lately almost everyone does it at one point or another, including myself. You don’t really notice it, it seems to just happen. Gambling is all around us, even online nowadays. According to overcominggambling.com, gambling has grown tenfold since 1975. Here is the breakdown of gamblers according to age.

42 percent of 14-year-olds, 49 percent of 15-year-olds, 63 percent of 16-year-olds, 76 percent of 18-year-olds

Why do we gamble?

I think there are two reasons why we gamble and why we continue to do so even though we know it can have negative consequences. First of all, I believe most people gamble because of the image associated with it. You know, the whole Vegas feel. Theres something exciting about being on the casino floor among other young wannabes and some real VIPs. You’ve seen those young guys show up at the tables and place a $500 bet in an attempt to look cool in front of the ladies. I actually find it amusing when that happens because I can see right through them. They think they are looking cool while in fact they just told me that they are financially incompetent and they will likely not be rich in the future. For that guy, he is the high roller for that moment. He isn’t worried about anything else because he is the cool guy for the next hour or so.

The second reason we gamble is for obvious reasons, the potential winnings. You get so caught up looking at the potential winnings that you forget about the chances of losing, which you have a greater chance of doing. I have a family friend who always had gambling issues. I heard this person mention one time about how a slot machine had a jackpot of $7,000. It was a fifty cent machine and required a three credit spin to win the jackpot. This person said, “what a great deal, $1.50 for $7000.” Well, first you have to win. This is the reason why this person is fairly old with a small net worth. This person has been searching for the $7000 jackpots through life.

How many times do we have to hear this? There are no short cuts. Wealth is a state of mind. It takes training to become and stay wealthy. Money itself does not equal prolonged or sustainable wealth. This is the reason why most lottery winners end up where they were before after just 10 years of winning. They never had the foundation set so the house of cards, or in their case, hundred dollar bills came crashing down.

A closer look at gambling

Gambling is about odds, and those odds are stacked against you. Theres a reason for the saying, “The house always wins.” Chances are you won’t beat the odds, you may win in the short term but in the long term you will lose. Yes I know there are professional gamblers out there who win a lot. I went to high school with a guy a jumped off the golden gate bridge and survived. Don’t try to be one of those guys. Problem gamblers have double the chance of divorce in their lives and the suicide rate is twice as high for them. Its not worth the gamble, period.

You can’t win with gambling. If you lose, you obviously lose. If you win, you also lose. That is perhaps the worst thing that can happen. If you win, you’ll be more willing to gamble and to bet more the next time around. Theres a reason that casinos spend millions in free food, rooms, and services to get you to gamble. Its a win-win for them.

Conclusion

I’m not saying don’t ever go to a casino again, but just remember what it’s there for. It’s purely entertainment. When I go to casinos I never go with the plan to win lots of money. I just go to spend time with my family and friends and I have a set budget of how much I will spend for this entertainment. The last time I went to a casino I lost $20 and I just stopped playing. I sat around, got some free drinks and listened to the live band. Just remember, you’re not a gambler, you’re an investor. You look at financial decisions rationally. If you ever see me involved with casinos again, I’ll probably be a shareholder.