The Psychology Of Gambling
Posted by Mitch Mitchell on Jan 17, 2009
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This might seem like an odd post for this blog, but stick with me for a bit. Over the last couple of days, I’ve read some stories about people in positions of some type of authority that have been caught stealing money from their organizations and using that money to support their gambling habits. Locally, there is the story of a man who was just sent to prison for stealing $272,000 or so and spending it all on gambling. Then there’s another story of a former local school superintendent who embezzled at least $176,000 from his present school district, and has our local folks wondering if he did the same thing here. And I wrote in a newsletter how another person, this time at a hospital system in California, was able to embezzle over $750,000 over a two year period, and spent most of that on supporting her gambling habit.
I can tell you honestly that I can see the appeal to gambling, and I can also understand how it can consume you. I’m a poker player, and I have those periods of time when I want to retreat into myself and just go play poker. It’s a good thing I’ve become pretty good at it, so that, if I play long term, I will usually come out at least even, if not slightly ahead (I ended up coming back from Reno after all those weeks ahead by around $350), and that’s its appeal Everyone sees that big time score around the corner, that chance at the big, instant money, and the glory that comes with it. And glory does come with it, along with envy, because when you win, everyone else thinks they can win big also.
Anyway, I have felt that tug many times. I didn’t feel it in Reno, but I felt it when I was at a conference in Scottsdale, Arizona, and I felt it when I was at a conference in Ft. Lauderdale, Florida. Gambling is a solitary and social event all at the same time. If you play slot machines, you can sit at a machine for hours, but you’re out in public with a lot of other people doing the same thing, and you also have someone coming by you every twenty minutes or so to see if you want something to eat or drink. If you play poker, you sit at a table with a lot of other people. Sometimes it’s relatively quite, but other times it’s quite a social event, and man, I love hearing older people tell stories, whether they’re old poker stories or other types of stories. Yeah, I’m a sucker for a good story.
When I go to the casino, I have one of two mindsets. There’s the mindset that I’m there to have fun. If that’s the case, then my intention is to be able to stick around for a very long time, sometimes as long as 14 hours, but I’m having fun, I’ve decided how much money I’m willing to lose for it all, and I don’t often come home a winner. Then there’s the mindset that I’m there to win. In this case, I know I’m going to stay for a relatively short period of time, maybe 2-3 hours, the amount I’m willing to lose is minimal, but I now start applying more of those poker skills that I’ve learned over the years, not taking any unnecessary chances, watching every player so I can figure out how they play, and I’m willing to sit for hours and just keep tossing my cards into the muck and wait for only those hands that I know will win, pretty much for sure. Because, in poker, there’s rarely a sure thing (four aces and royal flushes are extremely rare), so you have to be astute and keep your eye on everything, and then hope for the best, based on your calculations.
So, inherently, there is a psychology of gambling. Of course, this isn’t only an article about gambling at a casino. Every day there’s someone who’s ready to take another gamble at something. And, in this day and age, many people are gambling on some sort of business that they can run on their own. If I can, let me tell you about my entry into the consulting world.
I was working at a hospital system, and I started to notice that some thing were occurring that just didn’t make me feel all warm and fuzzy about the status of the organization. I like to think that, with enough information, I can read both people and situations, and I had a feeling something was about to occur. One day I was home on vacation and had what I call a Spidey sense moment. Something told me to go online and read the Rochester newspaper; just out of the blue, just like that.
I went to that site, and the big headline was something like “Hospital system closes hospital.” I knew that was coming in my heart of hearts, and had predicted it almost 3 months earlier. Sure, the proclamations had come down saying they’d never close that hospital because there wouldn’t be enough beds in the city to support it, but I had my information, and I knew it wasn’t true. I just didn’t know when; yeah, maybe I have my own ESP sense of things from time to time. From that point on, I knew I wouldn’t be working at this hospital system within 9 months.
Three months earlier, I had started thinking about my own exit strategy. I was 41 years old, and I knew that was a major defining moment in the life of a man, as to whether a man decides to stay with the status quo, or take a chance to do something else, whether extreme or just something they’ve never done before. I already had it in my mind that, though I might interview for another position, I really wanted to work for myself. I started doing some research, and I also put a little bit of money away, because I knew I wouldn’t jump right in and start earning the kind of money I was earning already, but had a shot at it eventually.
Less than two months after the one hospital had closed, I got word that my department, and two other departments in my own hospital, were being moved to another city. And, because they already had all the directors they needed, they’d create a supervisor position for me, but I’d have to take a 25% pay cut. Well, not only was the other city now another 30 minutes away from where I lived, and I was already driving 70 minutes to work each day, but a pay cut and a loss of freedom that I was used to in my present position, as the guy I’d be reporting to, well, I thought was kind of a jerk. So I said I wouldn’t go, accepted my severance and the offer of going on unemployment, and registered my business name two weeks after my last day on the job.
Talk about your major gamble! When one works in healthcare, they don’t really think of themselves as working in a business. In New York, all hospitals are not for profit, and the rules are different than for profit hospitals. Normally, if there’s only the one hospital in a community, you don’t have to worry as much about advertising because you’re the only close choice and everyone knows you’re there. So, I came into working for myself without some basic marketing or sales skills; I had no real clue.
That first year working on my own, which started in the middle of the year, I earned a little bit of money, nothing great, but fiscally the year ended pretty good. The next year was murder, though. In my first full year of working for myself, my profit was only $7,600; my second year profit was only around $17,000. Good thing I had a lot of credit, and good credit, but, as you know, one can’t live off that, even with my wife working a full time job. But everyone already in business said that if I could last to the third year, things would start to turn around. I wasn’t sure how, since I couldn’t really figure out what would magically change in my life to help it turn around. I had learned a little bit more about marketing, and had talked to a lot of people across the country, but I just wasn’t sure about it all.
On the verge of thinking about declaring bankruptcy, because I just wasn’t sure about it all, my mother called and wanted me to watch some program on TV. I did, and the speaker was giving some motivational words about never giving up, and always keeping a positive spirit and thought alive. Around that same time, I had started listening to motivational tapes and watched the movie The Secret, and started feeling pretty good. I got a paid request to repair someone’s computer, which I can do small repairs, and that paid something, not lots, but it was the start, as it was the first money I’d made that year. Then, only four working days later, I got the call I’d been waiting for, and my consulting business started to take off, and I’ve never looked back. Sure, there are ups and downs, but overall, my income had that opportunity at times to skyrocket, and I like that. Sure, there are those times when I’ll feel as though any control I have is a facade, but in general I have enough control to make sure that my yearly income is fairly steady.
But am I done? Well, obviously not. I actually have two dreams, rather goals, that, long term, I want to get to, and of course they’re going to involve a gamble of sorts. One, I want to be an almost full time professional speaker and seminars. I’ve actually already done a good number of each of these, but not enough so that I could consider them as second nature. I couldn’t live off the number I do now, but I’m working towards that. The other is to learn now to be an internet marketer, such that I wouldn’t have to worry about the long term consulting assignments again because I’d have a consistent income every month coming into the house from the internet. I think this second one is one that a lot of you have also.
But both are gambles. For instance, the time it takes right now to get one big time speaking engagement a year is phenomenal. There’s a lot of research that has to be done, then back and forth negotiations on the fee, then the outline and practice time and the rest of it. Frankly, while working for oneself, it’s hard to do and keep up with everything else. A part of me says that I might have to take a gamble and be ready to give up working on finding consulting assignments to try to get more speaking engagements. That’s not going to happen right now, but it’s something I have to think about. Internet marketing is another story. I don’t have to give up consulting to probably do it right, but I would have to give something up so that I could have more time to learn more things so that I could have the possibility of earning more money online.
It’s a gamble because sometimes it costs us to learn how to do it. In 2008 I spent around $125 to learn how to make more money online, and I did start making more money, oddly enough. The money that I’ll probably consistently make now will pay for the training material I’ve paid for and all of my online time. So that’s a good thing, right? Well, it’s a good start, because I have way more material, ebooks, reports and sound files, that I need the time to get through, that I need to make notes on that I can implement. All of you already know this; internet marketing isn’t as easy as those bad television commercials make it out to be. How many of you are making enough money with your blogs to support you for the rest of your life?
So, there’s really the thing about the psychology of gambling. It has to be recognized that everyone does it in some fashion, and that everyone needs to be able to find a way to control that gamble, or overcome the occasional bad gamble. Would you quit a job that was paying you $75,000 a year to buy your own rig and become a truck driver? I know someone who did, started slowly, then started making a lot of money, and now is back at a tough place because of the economy. However, had he stayed where he was, he’d have lost his job 2 years ago and had to figure out where to go next.
Life is a gamble, no matter what you do. If you think of it that way, you realize that sometimes the gamble is worth it, sometimes it’s not, but with enough information and study you have a better chance to succeed.