Jan 26

A guest post from Crystal –

Do you realize that much of our fun is purely dependent on our mental attitude at the time? I tend to be quite competitive at times. When I play sports, if I don’t check myself then I am often out there to win, not to merely have fun. And let’s be honest, I am not a professional athlete. I am not getting paid to play, so I may as well have some fun while I’m recreating! The same is true for gambling.

So often we can get caught up in gambling for a big jackpot return. For some, gambling is actually their retirement plan. Chances are, it’s not going to work out that way and it can make gambling incredibly unenjoyable. If you take your $20 to a casino and “put it all on red” and the ball lands on black, you may have just lost your hopes and dreams for that day. That can be an incredible let down! But, just like with sports activities, we need to learn to turn gambling into recreation, not as a necessity to win at life.

Budget For It

If I know that I am traveling for a vacation, and it will land me near a top notched casino, I will put an extra $50 into my budget for entertainment purposes. No doubt, this often turns into my casino money.

Just a tip for you (to keep it entertaining), when I leave my hotel and head out to the casino, I take only the amount of money that I have budgeted for myself that night. I know of a few people that divide their money in their wallet as “entertainment money” and “hands-off money”, but the fact is, if I am getting too involved in the gambling scene, it is just too easy to pull out that hands-off money. It’s best just to leave it at home (or in this case, in the hotel).

The purpose of the budget is to regulate yourself. If you did not put a definite number in your head before beginning to gamble, then chances are that you will spend more than you really wanted to in any given night.

Enjoy Yourself and Have Fun

There are many ways to gamble. You could wager some money at the craps table, at the track, or enjoy some sports gambling from your personal smart phone. Whatever is your choice in gambling, just remember to budget for this entertainment and have fun with your gambling.

written by Joe \\ tags:

Oct 21

I am not a fan of gold. For those who are, are you putting your money where your mouth is? Do you think gold will be over $1250 by the end of 2010? That’s ‘only’ 21% higher than it is today. I’ll pass along a secret, odds are 4 to 1 against it happening. If you feel otherwise, that it’s a sure thing, I’ll share with you how to collect that payoff. First a disclaimer: The following involves the use of exchange traded options. I’ve not discussed these instruments before, and will be providing only a brief overview to explain a specific strategy. Don’t do it unless you understand it. Even if you do, don’t do it.


This is a clip of the option quotes for the GLD ETF which trades at 1/10 the price of gold. An option gives you the right but not the obligation to buy the underlying stock at the strike price you choose. For example, $1450 gives you the right to buy 100 shares (options are priced per share but trade 100 at a time) of GLD until Jan 21, 2011 for $100/share. If gold rose to $1200, your $1450 would rise to $2000. Make sense?

Now for the 4 to 1 bet: if you bought 1 option at the strike price of $115 for $950, and sold the $125 option for $710, you would be out of pocket $240. If gold closed at $1250 on Jan 21, 2011, the $115 option would be worth $1000, and the $125 option is worthless, and you’ve gotten 4 times your money. Note, if it closes any higher, the difference between the two strikes is still $1000 no matter how high it closes. Below $1150, and you’ve lost your bet. In between and you’ll get something back, $100 for every $10 dollars gold is over $1150. As I said, I don’t recommend this, it’s just a thought experiment for me. Given the choice between actually buying gold or taking a fraction of that money and placing this bet, I’ll take the bet. You can lose it all, but gold can also crash to less than half its current value. Any questions on this gamble (I don’t call this investing) please comment.


written by Joe \\ tags: , , ,