MONEY MANAGEMENT

How would you define financial success?

Having the ability to retire whenever you like without any financial deprivation? Becoming wealthy - like, seriously wealthy? Having enough passive income to replace all of your active income?
Whatever your answer is we are all working towards some sort of goal. Me? I'm aiming for no mortgage and no need for "real work" by 2012 and, fortuitously, I seem to be on the way to achieving that. Only improving my self discipline appears to be the main object in the way.

Wherever you are in the journey, you must be able to master money and its management. Money needs to have a proper place in our lives and we need to treat it with respect and wisdom. By the same token, money, and its acquisition, simply can't be the focus of your entire life. Life is more than a bank account.

I have no doubt that giving a proportion of your income to either charities, or church, or individuals that you personally know are "battling" is paramount in money management as it gives money a proper place in our lives - you have to get your priorities straight. Don't try to skip this fact - it IS important. Elsewhere on this site I have written about that magical thing called "karma". Whether you choose to believe in it right now or not, it is TRUE.

All too often I come across fellow punters who want to talk up the amount they can make from this delicious sport - obsessed about how they can " increase their take" - at the same time having no idea about controlling the money they already have, no idea about interest rates, car loans, mortgages and whether or not they have a workable retirement plan.

If you don't really know how to manage the resources you already have - GET HELP - ask the experts - do a TAFE course in debt management - ANYTHING is better than blundering along doing nothing about it.

IMPORTANT POINT 1: It is absolutely pointless trying to set up a passive income stream from racing if you cannot manage the resources you already possess.

IMPORTANT POINT 2: You must exercise self discipline and self restraint in ALL aspects of your financial life - not just punting.

Now I know some of you will be saying "oh here he goes off another rant about self discipline". Friends of ours ( not punting friends) were bemoaning the fact at a recent dinner party about how they simply couldn't live on $750 a week that the husband's "normal" job returned. Now I know it's not 'de rigueur" to live within your means. Every second ad on Sky Channel is a Harvey Norman ad offering no deposit, no interest, pay in a 1000 days etc etc etc. That's fine for some people. Not for me. If I haven't got the cash I don't buy it. If I don't have the cash I don't punt it. If I don't have the cash, I try not to want it. Simple as that. When we analysed exactly what their money went on and where it was spent, we were able to identify $150 a week that didn't HAVE to spent straight away - had we spent more time, we probably could have turned up more.

What does this mean for a serious racing investor - well, for starters, another $150 a week that could have financed a substantial bank. Note Well: I KNOW this is very easy to say when the kids are all grown up. I fully accept that in raising a family it is not as clear cut as this. Been there - done that!

Being a master over your financial destiny far outweighs the disappointment of not having the latest 2 million centimetre plasma hi def TV (the losing horses look just the same on a smaller screen by the way!)

IMPORTANT POINT 3: You must make a household spending budget BEFORE you allocate money to your racing hobby / income/ investments.

Life costs money.

Clothes, food, accommodation (renting or buying), children, schooling, education. It all costs money. You have to know exactly how much your basic needs are or you will never know how much you can SAFELY allocate to your interest of racing without it causing great arguments with your partners in life. They always take precedence over punting - or should do. If they don't you are probably with the wrong partner !!!

This little business I run is called RaceRate ( and have done for over a decade) It exists so I can make a passive income from my interests. It is here to make a profit. Therefore I have a budget for this business so I can gauge the effectiveness of it. You would not be reading this page if this business was making a loss. In the same way, if you are out to make a profit you have to have a budget and spending plan as well. I KNOW it is boring - I KNOW it takes time and effort. You are worth it aren't you?

IMPORTANT POINT 4: You will only EVER make a profit from racing by doing the hard work.

There are many days when I don't feel like getting up and sitting down for a few hours at 5am to plan out my attack for the day on the tote and betfair - or, if you like, on how I hope to get YOUR money - after all, that's all the tote or betfair are, a method of exchange between punters where the winning few get the losses of the many ( less the government/ betfair rake of course). So when I win, I know that somebody had to lose. If that's you, sorry, but that's business and that is EXACTLY how I regard this business of punting. Make no mistake it is a business.

In a recent survey of American high school students a majority of them told the interviewers they expected to be wealthy as adults. But here's the kicker - over half of them declared they'd get rich by winning a law suit. (Good grief!!!) YOU GET NOWHERE IN THIS BUSINESS WITHOUT HARD WORK. The more time you spend revising your own ratings and making them as perfect as they possibly can be or fine tuning a methodology (hopefully that you have purchased from this site), the more success you will have. There is no other option - unless you trust in, and occasionally receive, the blessings of blind luck.

The old principle that hard work is how you earn money seems to be going the way of the dinosaur. Perhaps the great computerisation of the 21st century is to blame but the fact is, hard work is the only form of investment guaranteed NOT to fail. Even allowing for the occasional stories of "overnight millionaires, it is an absolute truth that the majority of people will only be able to provide for their needs through hard work.

IMPORTANT POINT 5: If you have a mortgage, pay it off as quickly as you can.

Understand this: your property is ONLY and investment and asset when it is paid off and you own it outright. An asset makes you tax free money. Your home won't do this until you stop paying interest and fees on it to the insatiable banks. It is way more important to pay off your mortgage than it is to punt on the horses. You would need a VERY reliable method of punting to make the reverse true.

IMPORTANT POINT 6: Always strive to learn more.

If you are striving to make money from racing, learn everything you can about it. Devour the racing pages on the internet, try and see how others are making a living from this great industry. Always open your mind to new (an old) ideas. Old ideas do become new (and profitable) again when the countless thousands of punters who supported the "old idea" got disheartened by the shrinking dividends (because everyone was "on it") and moved on to something else. Thus the old idea, which probably worked fine all along, returned better divvies again when the "mob" went on to something else, newer, and glitzier even.

Combine knowledge and mix in to something you believe in and apply with consistency and persistency and discipline, and you may just finish this year in a much stronger financial position.