My Financial Advisor almost Crapped His Pants

[vpmikey]

Gambling loses are basically just entertainment dollars. That’s what it all comes down to. All the games are set to take your money. The longer you play, the more the ‘Entertsinment’ is costing you. And the more you play the ‘lower’ EV games, the more your entertainment is costing you. My FA knows I take many Vegas trips. He also knows I play the lowest negative VP games, and some positive EV games. My five day Vegas trips for my wife and I, we have a bankroll of $1500 dollars, and we always bring some of it back, if we don’t hit a royal. Also, when I’m playing, I don’t look up to the ceiling and see a $100,000 chandelier. That is not my kind of entertainment. And the cruise ships don’t get a dime of my money. I paid for the cruise before I go. Their casinos have the highest negative EV games around. ‘Expensive’ entertainment there! The loses are just what the entertainment costs you. That’s the only way to look at it……

 

[MangoPort]

So I'm an Advisor (technically a Portfolio Manager & Investment Advisor for one of the big banks in Canada) and I also love Vegas.

Spending disposable income to gamble is great, but if you're drawing on funds meant for retirement to do so only THEN is it a problem. It's why when we build a financial plan for clients we need to know how much they have in their various investment / retirement accounts, but we wouldn't count the money in their chequing account because we just assume that's already earmarked for something.

I only once had a problem gambler as a client and that was a rough situation - on $1 million worth of investments he was drawing out $150k+ per year to gamble and he was retired... just a rough situation all around and thankfully his family got involved before it was all gone.

But if it's within your budget go nuts!

 

[smerrian]

Do you play enough on cruises to get free cruises? Which cruise line do you go on?

Yes. I get free cruises with NCL and Celebrity.
NCL is a very average cruise experience. I would rate it a C. But their casinos are great with 8/5 BP and fair 3-4-5x odds on a $15 game. The food is very mediocre but the ports of call are fantastic. I use them because my husband and I used to take easy cruises out of Manhattan with NCL and I've built up a high tier level with them.
Celebrity is a great mid-level cruise experience. I would rate it A-. But, their casinos are pretty foul with 7/5 BP and 1x odds on a $15 game, going to 2x odds if you're playing at $25. The food is very good but the ports of call are usual.
Result: I use NCL for transatlantic cruises, which aren't fully comped, but close, so the casino is open almost every day. I use Celebrity for Caribbean cruises where I just want to enjoy the atmosphere and if the casinos are closed half the time, so be it.
As a solo traveler, I get a regular room for half price...but I also have no single supplement, which brings the cruise to about 2/3 off.

A good FA wont question what you're doing with your dough. They should be there keep an eye on the goals and parameters that you set in addition to offering advice on avoiding taxes, trust strategy, etc.

There's a ton of crap FAs out there. Many are tied up in pusing investment products based on leading/trailing commissions, which is why I rarely sit down with mine. If I were in @smerrian 's shoes and mine were to get preachy, I'd offer a nice warning but find a new advisor if it persisted. The dude/gal works for you and only you.

My FA never questions what I'm doing with my money. It's my money and I can do as I please, which he's mentioned to me. If you read my post carefully, you'll see I said that "the look on his face was, well, startled. As in...". He never said a word in questioning my desires.

 

[smerrian]

I only once had a problem gambler as a client and that was a rough situation - on $1 million worth of investments he was drawing out $150k+ per year to gamble and he was retired... just a rough situation all around and thankfully his family got involved before it was all gone.

But if it's within your budget go nuts!

Similar to my situation and what was going through my FA's head. I had stated gambling statistics of about $150K bankroll per year. He was seeing that as losing $150K per year and had a facial expression to match it. Had he been a gambler, and especially a VMBer who knows better, he would know that it's $150K bankroll and 80-90% of it comes back to me.

 

[andyg99]

Similar to my situation and what was going through my FA's head. I had stated gambling statistics of about $150K per year. He was seeing that as losing $150K per year and had a facial expression to match it. Had he been a gambler, and especially a VMBer who knows better, he would know that it's $150K bankroll and 80-90% of it comes back to me.

he's been your advisor for 30 years and just figured this out or did your gambling habits change drastically? I do the same - I over-budget each trip...

 

[smerrian]

he's been your advisor for 30 years and just figured this out or did your gambling habits change drastically? I do the same - I over-budget each trip...

I never mentioned my bankroll to him before. He just hears that I go on these trips and I cover the costs with my self-allocated monthly transfer. He didn't realize what I bring to the casino. He figured...lose $2000, he must take $2000. When he heard me say I bring $2000 weekly to my local and $8000 to LV/cruises the blood rushed from his face. 5 trips to LV, 4 cruises, 1.3 trips to AC per week...that registers to $150K in losses to him.

 

[mrem3200]

I simply explain that I like the math behind all the games.

I am curious how you "like the math" behind any game let alone all of them. Every single one is a negative EV game. I am not judging, I go to Vegas twice a year and gamble some but not a lot. I never justify it as being a "good bet" just something that I think is fun.

 

[mrem3200]

Now I can impress friends with "I played thru $XX, XXX last year"

You have a different kind of friends than I do if THIS is what impresses them. I intentionally lowball how much I played/won/lost. I know a lot of people that think gambling in any form is a total waste of money and the stupidest thing in the world. If I tried to brag about how much I played they would think I was a total loser.

 

[cheaps]

You have a different kind of friends than I do if THIS is what impresses them. I intentionally lowball how much I played/won/lost. I know a lot of people that think gambling in any form is a total waste of money and the stupidest thing in the world. If I tried to brag about how much I played they would think I was a total loser.

My friends are also my Vegas friends, so yes a different audience than yours.

 

[mrem3200]

We get it, they don't.

All due respect, I think you have that backwards to some extent. Any financial advisor worth their salt will tell you that gambling in any form is stupid. But it is all relative, of course, will a FA care if someone with a net worth of $5 million gambles $10k in Vegas? Of course not. But for you to declare that FA's don't "get it" is over the top arrogant. If you get it and they don't, why are they managing your money?

 

[packfan57]

And how much JUNK does Amazon deliver to these people a day??? I don't like or care for JUNK!!!! I'll have some enjoyment, thank you!!!!

 

[vegasdev]

All due respect, I think you have that backwards to some extent. Any financial advisor worth their salt will tell you that gambling in any form is stupid. But it is all relative, of course, will a FA care if someone with a net worth of $5 million gambles $10k in Vegas? Of course not. But for you to declare that FA's don't "get it" is over the top arrogant. If you get it and they don't, why are they managing your money?

It is not being over the top arrogant.
I'm in the camp with many others where the gambling / bankroll is part of your entertainment budget.
I don't think FAs suggest never having any form of entertainment if.
Gambling is supposed to be for fun, not investment.

 

[Whoopdido777]

It is not being over the top arrogant.
I'm in the camp with many others where the gambling / bankroll is part of your entertainment budget.
I don't think FAs suggest never having any form of entertainment if.
Gambling is supposed to be for fun, not investment.

Gambling should be a recreational activity at best. If you’re going to do it all it should be fun. If you don’t actually enjoy it then you shouldn’t do it. If you do it because you think you can make money by doing it you absolutely should not do it.
There are a lot of different activities that people just get stuck in a rut doing over and over when they actually don’t really enjoy doing it, but at least the difference is that they might not lose a bunch of money like they can with gambling. But again gambling is supposed to be fun and it can be. Just stay in your lane.

 

[mrem3200]

It is not being over the top arrogant.
I'm in the camp with many others where the gambling / bankroll is part of your entertainment budget.
I don't think FAs suggest never having any form of entertainment if.
Gambling is supposed to be for fun, not investment.

You missed my point entirely. I will chalk it up to being my fault. Good luck

 

[topcard]

I am curious how you "like the math" behind any game let alone all of them. Every single one is a negative EV game

Answering only for myself, but even playing many EV-negative table games, there is frequently a point when you're "up" for the session - especially with blackjack & craps.
Hypothetically, if you book those frequent (& small) wins every time they happen, you really could come home ahead, or just a little bit down.
I'm not saying I do that, just that one could do that.

A long time ago here on VMB, someone pointed out (correctly) that casino gambling is a lifetime event. You may very well be up by thousands of dollars after 20 trips, but unless you're never going back, the "math" will absolutely catch up with you eventually.
This is why one should always look at casino gambling as "entertainment", but fully recognizing that it's about the only form of entertainment that can actually result in more money in your pocket at the end of each trip - and even if it doesn't, it often ends up effectively "EV+" when factoring in the value of comped rooms, meals & drinks (versus other kinds of entertainment).

Think about it this way - if I go to Vegas for 3-nights & lose $1000, the gambling was EV-negative, but if the room would have cost me $600, the meals $200 and the drinks $300, I'm actually better off than if I had taken a non-gambling trip with normal costs for RFB.

 

[mrem3200]

Think about it this way - if I go to Vegas for 3-nights & lose $1000, the gambling was EV-negative, but if the room would have cost me $600, the meals $200 and the drinks $300, I'm actually better off than if I had taken a non-gambling trip with normal costs for RFB.

Of course, that is just math and makes sense to get what you can while you can. But despite what people say here, some people actually think their hosts are their friends, the casinos are not stupid. They will cut you off in a second if you are not profitable for them. It happend to me. Cosmo cut me off from most comps after I lowered my play and had a few winning trips. They were right to do so, I am a finance guy and I would have cut me off too. If you think the free lunch it going to last forever, I doubt that it will. They are not going to keep giving you $1,100 in comps if you are only losing $1,000.

 

[LB9]

Of course, that is just math and makes sense to get what you can while you can. But despite what people say here, some people actually think their hosts are their friends, the casinos are not stupid. They will cut you off in a second if you are not profitable for them. It happend to me. Cosmo cut me off from most comps after I lowered my play and had a few winning trips. They were right to do so, I am a finance guy and I would have cut me off too. If you think the free lunch it going to last forever, I doubt that it will. They are not going to keep giving you $1,100 in comps if you are only losing $1,000.

This is absolutely spot on, especially the part I bolded above. I also find it bemusing how many folks, especially here, that think their host enjoys just giving them free shit and then the subsequent shock and effrontery that follows when they're cut off. It makes me wonder if these very same people have trouble with interpersonal skills in the real world which, after meeting many, I would definitively say yes.

I enjoy gambling like many here, though I know full well going in I'm likely going to lose most, if not all of what I bring. It's expensive entertainment and, as such, I try not to delude myself into thinking gambling is an investment. Of course I'll use the comps that come with my play, but I don't rationalize it that I'm somehow ahead when in reality, I'm not. It's one thing to convince oneself that they're ahead or whatever, but entirely a different thing to pontificate on an internet forum that they're getting all these freebies in perpetuity just because a casino likes them. I'm not a behavioral psychologist but many of the most unusual people I've ever met, by far, are gamblers lol.

 

[Zapper]

Just had my semi-annual meeting with my FA. After 30+ years, he knows I'm in AC at least once a week, make 4-5 trips to LV, and take 2-3 cruises every year. He's not a gambler; his family skis. And being at such comfort levels with him, I just happened to mention that I was heading down to AC after our meeting, with a couple of thousand dollars in my pocket, for dinner at the lounge and to play. Also, that I enjoyed my last cruise and I'm good for my bankroll on my next trip which will be about $8-9K.

At which point the look on his face was, well, startled. As in, this isn't your plan! You'll be bankrupt way too early! type of look...or maybe that he crapped his pants.

Maybe it was a different look, could it possibly have been the look of " me not getting my 2-5% of $9,000k extra per year @an 8-9% compound interest rate and maybe even transaction fees on-top over the next 20-30yrs?" (Or even longer if there are heirs involved that he /she hopes will likely be handed over to the same FA or his/her heirs?). That't the look I'd have for sure if I was an FA.

 

[mrem3200]

This is absolutely spot on, especially the part I bolded above. I also find it bemusing how many folks, especially here, that think their host enjoys just giving them free shit and then the subsequent shock and effrontery that follows when they're cut off. It makes me wonder if these very same people have trouble with interpersonal skills in the real world which, after meeting many, I would definitively say yes.

I enjoy gambling like many here, though I know full well going in I'm likely going to lose most, if not all of what I bring. It's expensive entertainment and, as such, I try not to delude myself into thinking gambling is an investment. Of course I'll use the comps that come with my play, but I don't rationalize it that I'm somehow ahead when in reality, I'm not. It's one thing to convince oneself that they're ahead or whatever, but entirely a different thing to pontificate on an internet forum that they're getting all these freebies in perpetuity just because a casino likes them. I'm not a behavioral psychologist but many of the most unusual people I've ever met, by far, are gamblers lol.

Wow LB9! You did it. This is probably the best, most well said, eloquent, spot on (not sure what other superlatives I can add) post I have ever read on VMB. If I had to change anything to what you said....I would not change a period or a comma, you nailed it....of course in my opinion. Best of luck to you in everything you do.

 

[smerrian]

Sorry, I take some umbrage with that assessment. I don't think most of the hosted players here think their hosts are their friends. But, rather, they judge their hosts by how well they provide the coddling benefits they feel they should be receiving. When they fawn over a host, it's not that the host is their friend; it's that their host is actually doing their job! Returning calls, providing benefits, unexpected upgrades, and room gifts, etc. I think they're gushing over finding someone who is competent, not a friend.

Also, those who play large amounts are most likely putting the same percentage of their entertainment-available funds into the mix as you are. For me, $30,000 is a very acceptable annual loss number. I'm aware that there are bigger fish and smaller fish. Still, I add up all of the comps and see what the trip would have cost out of pocket. Then I subtract that total cost from my losses and the rest of my losses are my entertainment cost. It falls into an acceptable range. I'd hope most people do similarly.