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Credit Line vs Net Worth Ratio

Discussion in 'General Vegas Talk' started by Chicken Dinner, Jul 31, 2016.

  1. Firstkill

    Firstkill
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    how is networth being calculated when you have a mortgage/car payment/school loans?

    do I got better things to spend on or to pay back (yup)
    but enjoying gambling and after losing for a year, I have altered my play. now I'm willing to risk 1/2 paycheck per trip

    back to red chips!
     
    #21 Aug 1, 2016
    Last edited: Aug 1, 2016
  2. Packer

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    Hey Firstkill, where have you been? After the ungodly amount you spent on the renovations of the casa, what no housewarming party? Lol.

    Forget the mortgage, car pmt and school loan! How much cash in the bank, brokerage account or money under the bed? How much of that would you use? Red chips my ass! Lol. Hopefully see you soon.
     
  3. Firstkill

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    After brexit. I decided to gamble more from my schwab account.

    The gaming selection/rules have gotten so poor at the green chip level I'm just playing for fun now. Also my group of friends are in the baby mode, my buddies are all on lock down lol.
     
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  4. bigalbr

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    I see we calculate net worth a little differently. If all you consider as net worth is just free savings outside of 401ks and housing, yeah, you can bet a lot more of your "net worth" safely.
     
  5. Hard4

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    I guess in order to answer the question, or at least be able to have an apples to apples discussion, we need to first figure out how we're calculating net worth. I had assumed, everything (mortgage loans, cash available etc...) was included.

    Nate is probably right in saying that your net worth should be 100x your credit line, but man that seems low, especially for a person who likes to gamble. That would mean that a player with $1MM net worth should only have a $10k credit line. Or a player worth $500k should only have a $5k line. I'm guessing this ratio would never fly with most people on this board.
     
  6. shifter

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    when I started gambling seriously several years ago, I had just started making pretty decent money, my wife and I had no kids and very low expenses. as my income increased over time, I kept my expenses low by staying in the same small starter house, driving the same paid-off car, etc, which meant lots of extra cash flow every month.

    of course rather than put that into a retirement account ... I took it to the casino! I was consistently blowing half my net income every month. I was young and felt like I had forever until retirement so why not enjoy life now?

    the willingness to risk a considerable amount of your net worth at the casino is no different from the majority of society (at least in America) that spends every dollar they make on clothes and cars and whatever other random stuff they "need". how many average people do you know that even talk about their "net worth"? everything in this culture is talked about in terms of "how much do you make?" the idea is that you make $X a year and you spend it. you spend based on your income, not on how much you actually have saved. saving is a foreign concept, which is why the average American has something like $20k in their retirement account right now.
     
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  7. stackinchips

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    A little late to the party here, but on my last few trips I've definitely thought about this quite a bit. If you walk through the casino floor and look around on the main floor/HL, the number of people you see if Vegas playing fairly high stakes (not necessarily $50k hands, even just black chippers), it definitely doesn't mesh with what we know about incomes/wealth in this country. While I know that Vegas draws people from all over the world, for someone to even come out and drop $10k on a trip (probably about the bare minimum for blackchip BJ play), they should be making six figures and probably north of $200k. There simply aren't enough of those people to account for everyone in Vegas playing at those levels.

    In general I think a lot of the people in Vegas are betting way above their heads, and are probably gambling at the expense of something else. That something else may not be their grocery money, but it might be their retirement/savings, Junior's college fund, a nicer house, etc. The numbers simply don't add up to account for all of the higher limit play you see in Vegas.

    I'm just a mid-roller in Vegas, but our household income is in the top 1% and my wife and I crossed the $1M net worth mark around 30. Statistically speaking, we shouldn't be in the middle of the pack for gamblers in Vegas but we are. Everyone is certainly entitled to spend their money how they want, but it's interesting to analyze this phenomenon. It's not just on the high end either, as the same probably applies to a small player bringing $2k on a salary of $35k with little to no savings and CC debt.
     
  8. natedog666

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    That is what fascinates me because sometimes I would chat with other "big" players at the tables and they would say something that absolutely disconnects in my mind as to what I think their net worth is.

    I think, similar to what Shifter is alluding to, is that gambling is an entertainment choice and rather than spending their money on a mansion or nice cars, the gambler would rather risk it at the casinos.

    But the question is, how much of your income would you spend on this kind of "entertainment"? I know people that will hesitate to take a nice vacation to Europe but wouldn't flinch at betting 50k at the tables. The illusion that you can consistently win at the casinos definitely skews the amount you are willing to take there...because as we all know, we have a chance to win and have a free vacation!
     
  9. shifter

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    No doubt. The "free" vacation plus the chance to win is the main draw for the gambler.
     
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  10. stackinchips

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    Some of that is semantics. While it's probably accurate that some people are choosing to spend their money gambling instead of having cars, boats, bigger/better/more houses, etc. the reality is that they're still probably doing so at the expense of more prudent use of their money. The fact that they would have blown that on a Porsche instead of a week in Vegas doesn't change the fact that it would have been much more responsible/prudent to have saved/invested the money rather than spending it on Vegas OR a Porsche.

    Again, I don't mean my comments as being derogatory by any means. If someone wants to spend their money gambling instead of something else, more power to them. I just find it interesting walking around in Vegas and knowing that what I see there and what we know about income and wealth means that people are spending money they either don't have, or should really be using for their future. Then again, the statistics that we know about the average person's savings tells me that I shouldn't be surprised at all!
     

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