How to make A Million from a buck in one year !

Betting is a relatively easy way to make a quick buck. Or is it ?
A disciplined investment plan for punters .

Can betting be built on a long term strategy ? Its a matter of discipline ... and patience and very high returns. What if we did have discipline ?

Introducing .......

*Drum Rolls*

.... the 5% compounding rule in Betting.

It works like this... You start off with 1£ on the first day.
You discipline yourself to bet and "earn" 5% of that amount the next day... and so on.
( assuming that a win in 2nd or 3rd round US open match between a top-seed player and an unseeded player will get you an easy 5-7 % - or on the other side , a win on either of the teams on a friendly football match between Argentina and Spain would bring you anywhere between 150-180% of the bet money - suite your risk appetite )
( - But we will just stick on to the 5%. - and why did I choose 5% rather than 3% ?, see the note at the bottom )

The amount gets compounded everyday. On day two , you bet your seed + win .. and it goes on. ( considering that you can endlessly find a supply of such low risk matches )

After the First 10 days, you will "earn" - £0.5
In the next 10 days, you will make around £1 and £1.6 in the next 10 days ..
well ... for the first 50 days , you will "earn" only about £9.9
And the Next 50 days , - £114 .
But if this goes on for a year .... A YEAR ..., ( if you have the steam to go on .. that is..) you would have made .... a whooping £51.6 Million ! ( i.e you would be raking in at the rate of £141,452 a single day ! )







Wait .. wait ... Something seems to be terribly wrong. Why doesnt this work ??? Hmm .. theoretically nothing stops it from working ! - Just like the Martingale System ! ( Read more about my experiments with Martingale System here )

Now that you instinctively say it wont work, Lets see why ..
1. You donot find low-risk matches all through out the year.
2. There is an upset loss somewhere . ( where a top-seed looses to an unseeded )
3. Greed - to risk more and win bigger and faster.
4. Beyond a point, the system caps the amount you can bet on a match
5. Human factor - Beyond a limit, a seemingly low-risk match would look like a high risk one ! ( Imagine .. half way down the year, betting £6500 - probably half your earnings )
6. Time required to choose the right matches to bet.
Why 5% ?
For my experiments, I started off with a seed capital of £25 and a 10% cumulative index, but I realised that somewhere between the 8th and the 10th day, things started reversing . ( i.e I made almost double the amount, but the time required to be invested and the risk did not seem to be proportional to the resultant returns )

So I thought why not 1% ? Consider this .. If you go by a 1% return model, using the above methodology, at the end of the year, you make around £38 !!! Where as, if you increase the return by 3% (of your seed), your returns at the end of the year will be close to £1.58 Million ! ( A return of close to 3.86% ( compounded ) would ensure that you would get a Million out of a buck in a year. )

What else can we do with the idea ?
1. A trust fund -
Consider this - A compounded 1% return would give you 38 times the seed money. That means A 0.2% returns ( compounded ) will give you 100% returns by the end of a year. -
Equivalent to a risk of a team loosing a football match ( in the last 5 minutes ) when it is 2-0 up at the 85th minute !! - Which is almost no risk at all !
Whats the best savings rate in a bank ? 5% ??
Whats the best returns on a fixed deposit in a bank ? 11 % ?
Whats the best returns on a favorable year on gold ? 30 % ??
Now whats the best that a share market can give you over a year ? 60 % ??
..
Remember .. these are all very optimistic figures. For an easy betting - The figure is 100% ! Beat that !
I would say ... its high time we bet on betting !

After Note : Fallacy of risk and return percentage
When you say, an increase in returns from say 3 % to 5% , it does not *definitely* mean that the risk has increased in the same basis points . More probably, the risk has more than doubled . ( quantifying this number is beyond the scope of this post )