The Crazy Powers of Compounding

Grind-It-Out · Apr 18, 2010

I was curious as to how feasible it would be to pay off the rest of my mortgage strictly via betting. As it turns out, it's very feasible.

I have $120k left to pay off, and a current bankroll of $4.3k. Betting 3% of my bankroll per play, 3 plays per day, and hitting at 57% on an average line of -110 leaves me hitting the $120k mark in 420 days. I find this very doable.

My actual goal, however, is to have the house paid off by the end of 2012. That's about 32 mortgage payments away, so take off $32k of principal and I would need to win $88k over about 975 days. To do this, all you need to do is risk 2% of your bankroll per play and hit at 55.1%.

Oh, and if you can play nickel lines instead, you can take off about a year.

jjlollipops · Apr 18, 2010

sounds like one hell of a plan. Good luck. Would be an awesome goal to actually accomplish. U make it sound so easy lol.

crazy · Apr 18, 2010

I'm not sure your math will hold up, Unless you actually hit 57% daily.

good luck mate, and maybe some math expert can shed some light on this issue

JimmyVegas · Apr 18, 2010

Juice will kill you epecially in baseball........good luck but very improbable

Grind-It-Out · Apr 18, 2010

crazy said:
I'm not sure your math will hold up, Unless you actually hit 57% daily.

good luck mate, and maybe some math expert can shed some light on this issue

That's very true. The math assumes a constant winning percentage, slowly but steadily increasing the bankroll. Short-term fluctuations will hurt profitability, so the end date is definitely not accurate.

crazy · Apr 18, 2010

Grind-It-Out said:
That's very true. The math assumes a constant winning percentage, slowly but steadily increasing the bankroll. Short-term fluctuations will hurt profitability, so the end date is definitely not accurate.

thank you..thats what i thought

buffettgambler · Apr 18, 2010

Grind-It-Out said:
That's very true. The math assumes a constant winning percentage, slowly but steadily increasing the bankroll. Short-term fluctuations will hurt profitability, so the end date is definitely not accurate.

Under these expectations, the median bankroll at the end of the period would be 66,675.

Performance expectations and the assumed edge of the market made by the OP is another topic.

Grind-It-Out · Apr 18, 2010

buffettgambler said:
Under these expectations, the median bankroll at the end of the period would be 66,675.

Performance expectations and the assumed edge of the market made by the OP is another topic.

Good stuff. I am not a stats wiz, so I do everything in PHP instead.

Over 10,000 iterations, the numbers are as follows:

Win% = 57
Median = 696337.551523
Mean = 3789067.34611

Win% = 55
Median = 5805.26452775
Mean = 139356.932595

Here's the code:

Code:

$bankroll = array();

for($k = 0; $k < 10000; $k++)
**
        $roll = 4300;
        $bet_size = .03;
        $win_per = 55;
        $bets_per_day = 3;
        $num_days = 975;
        $line = -110;
        for($i = 0; $i < $num_days; $i++)
        **
                $temp_bet_size = $roll*$bet_size;
                for($j = 0; $j < $bets_per_day; $j++)
                **
                        if(rand(0,100) >= $win_per) $roll -= $temp_bet_size;
                        else $roll += $temp_bet_size*(abs(100/$line));
                }
        }
        $bankroll[$k] = $roll;
}
echo "Median = ".calculate_median($bankroll)."\nMean = ".calculate_average($bankroll)."\n";;

For whatever reason, left brackets are showing up as **. No idea.