Financial planning

[thenarrowpath]

Looking for advice from those of you who've been at this a while and/or have investment experience.

Ok, so...I have a 20k bankroll, plus 20k savings. My current employment allows me to save roughly $4000/month after all of my expenses are paid, and leaves me with a bit leftover in my checking. I don't know much about investing, but I do know my money isn't doing much for me in a savings account. So...

Goals:
1. Increase bankroll to give me ~$100/hr EV with little to no RoR

2. Put my savings somewhere that it will grow, preferably keeping up with or outperforming inflation.

Given these goals and my situation, what would you suggest? Please, if you have the time make a serious and thoughtful reply or PM me. If not, friendly banter only please. Thanks guys.

P.S. if you know a good book that touches on this subject, I'd love to read it.

[Bigdaddy]

For an EV of $100 per hour you'll need to spread about 1 - 16 ($30 - $480) at a good PA rules 6-decker (5/6 pen) and wong-out @ TC -3. To have a near zero ROR in this game, you'll need a bankroll of about $75k.

In addition to your playing bankroll, you should also have cash reserves to cover at least 6 months of living expenses in case of emergency (loss of employment, etc.).

As far as investing goes, there's no quick way to get there. For a long-term investment plan, I would open up a discount brokerage account (E-Trade, etc.) and choose about 10 Vanguard index ETFs among various categories, including small-cap, mid-cap, large cap, high-dividend yield, growth, value, international, real estate and commodities. Invest your excess $4k per month and be patient. Stick with the plan.

[Stealth]

As you have already spent a good deal of time to learn card counting, then I suggest you educate yourself on investing in the stock market which should result in moving some of the savings into one or more mutual funds that you continue to add money to monthly.

IMHO, ideally blackjack would be a hobby and for stakes worthwhile (IMHO) requires a 50K bank. You have a bankroll that you can "re-replenish (say1,000 month)" which means you can use a much larger bankroll number to calculate RoR and bets sizes.

Fire away.

[Freightman]

As you have already spent a good deal of time to learn card counting, then I suggest you educate yourself on investing in the stock market which should result in moving some of the savings into one or more mutual funds that you continue to add money to monthly.

IMHO, ideally blackjack would be a hobby and for stakes worthwhile (IMHO) requires a 50K bank. You have a bankroll that you can "re-replenish (say1,000 month)" which means you can use a much larger bankroll number to calculate RoR and bets sizes.

Fire away.

Stealth makes good comment about using a replenishable 1k per month to boost bankroll (not specified, but likely to the tune if 10-12k additional roll, thus turning your 40 k to his specified 50k.

As 20k of the bankroll is non bj earned, I think, then I would excercise caution on the rep,enishable 1k specified, by reducing your 50k roll to 40k, in the event that your new month starts off with a 1k loss. Once the 1k was recovered, then you could imply, once more, that your bank us 50k, and size bets accordingly.

[Meistro123]

Well you can simultaneously invest the money in an ETF investment while leveraging it as part of your bankroll, which would give you the best of both worlds. But the return from investing in a blackjack bankroll is going to be substantially higher than any sort of equity investment.

[thenarrowpath]

Thanks so much for the advice, guys. More is definitely welcome. So should I try to rush to that $75k bankroll before putting funds into the market? Do you guys keep your bankrolls liquid, or is it partially invested? What percentage should be fully liquid? As far as the investment side, mutual or index funds? My understanding is that index funds attempt to "break even" with the market while mutual funds attempt to outperform it.

[thenarrowpath]

Well you can simultaneously invest the money in an ETF investment while leveraging it as part of your bankroll, which would give you the best of both worlds. But the return from investing in a blackjack bankroll is going to be substantially higher than any sort of equity investment.

Right. I had thought of that. My concern is that I can't just keep dumping funds into my bankroll. For one, eventually the bankroll would be so large that my bets would be under extremely high scrutiny whether counting or not. And second, all that money is sitting there not earning me money while I'm not actively playing with it. For those with experience at high stakes, at what bet sizes does it become much more difficult to avoid the heat? Are you eventually relegated to hit and run tactics?

[SpikeBJ]

I use SPDR ETFs for equity investments; Investing across the various sectors of the US/World economies. Real low cost!

[Three]

Well you can simultaneously invest the money in an ETF investment while leveraging it as part of your bankroll, which would give you the best of both worlds. But the return from investing in a blackjack bankroll is going to be substantially higher than any sort of equity investment.

This really depends on how the increase in BR affects your game. You may have a $150K BR but you really only need a small portion of that BR to play. The rest can be invested in something that can be made liquid quick. My financial advisor recommended tax free bond fund for the state I live in. I get around 4% return over time and there is no federal, state, or local taxes.

Anyway if the investment in BR isn't going to change the your bet size it really doesn't do anything but lower RoR. If you are at a level where you will increase betting with more BR or have a high RoR, which would have the need to liquidate assets to maintain you betting level and RoR after expected loses, then investing in your BR makes more sense.

Like to have a $500 max bet for a game I play you need about a $30K BR for a 1% RoR. If you had a $30K BR and wanted to maintain a 1% RoR investing in your BR would make sense. But if you had a $40K BR, you have a $10K cushion for swings (33% over bankrolled). You could lose 1/4 of your BR and still have your desired RoR of 1%. So in this case you might consider investing the money more long term.

[Three]

If you invest what may be needed in the short term in long term investments like has been recommended by some, you are gambling both in the market and the tables. Simultaneously betting a BR on two different things gets complicated, as Griffin pointed out in one of his lesser known books. It is better to invest what you think you may need to make liquid into something with certain growth, like the tax-free bond fund for the state you live in. This way you have relatively certain growth, and when the need to make things liquid you don't have to give a vigorish on gains to the governments. The rest can be invested in long term investing as you likely will never need it.

[SpikeBJ]

I think 3 makes good sense here. +1

[thenarrowpath]

Ecclesiastes 5:10: Considering your name, I thought you might enjoy the irony. Whoops, my bad. I thought you said "the" good book.

Oh Moses, you old so and so. Thanks for the chuckle.

[thenarrowpath]

I really appreciate the thoughtful advice guys, thank you. If anyone else feels they have some wisdom to give, I'll gladly accept it. Even if it's to give your vote to something already said.

Can anyone offer me a picture of what to expect as far as diminishing heat at higher stakes? Right now my only cover is that I play at low stakes and I'm quite social while I play.

Am I just going to need to accept shorter sessions? Some change in comportment? No change needed?