What I’m hoping to explain here is how I personally manage my bank; I use what I call **The Annuity System**.

### What is the Annuity System?

Basically, it is very simple…

1). I start out with a bank; this has to be money that I can afford to lose. If it takes me a few extra months to save up this money then, so be it.

2). I then work out my stakes; for Place Profits (with its 80% strike rate) I am happy with a 20 point bank. Now, for the purposes of this explanation I say that the starting bank is £2,000 and, thus, I am initially betting to £100 stakes.

3). I then decide on what percentage take out I want. With Place Profits I think that the sweet spot is a take out of 60% of monthly profits for those months where there is a profit. I then increase the bank by the remaining 40% of the monthly profits. Then I adjust the stakes to take account of the increased bank.

For Place Profits I think that it is better to do this on a monthly basis but there’s nothing to stop you taking profits and re-calculating your bank (and, thus, your stakes) on a weekly basis. Because of the way the results cluster, you can often have a losing week but it is quite rare to have a losing month.

The spreadsheet that I am using to display the data is available at… the-annuity-system.xlsx

It’s probably easier to give you a walk through of how this works in practice…

### A Walk Through…

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Now, the spreadsheet is fairly simple but I’ll run through it…

- Column G –
**p win**just shows Yes if it is a place win or no if it is not. - Column J –
**W Pr**shows the profit that the horse would have generated if it came first (after taking out a 2% Betfair commission.) - Column K –
**P Pr**shows the profit that the horse would have generated if it was a place win (after taking out a 2% Betfair commission.)

I’ll explain the other columns when we get to them.

You can see that we start out with a £2,000 bank and, thus, are initially betting to £100 stakes.

#### January 2018

Now, at the end of January we are not in profit for the month. See below…

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At the end of the first month (January 2018) we are down by about £65 – not even a point.

As a result, I am not reducing the stakes as it doesn’t really seem worthwhile to do so.

However, there is no profit on the month and, thus, no take out. The monthly take out is shown in column R – **Take Out**.

#### February 2018

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In February 2018 , we made a profit of £1,172.68

The take out on this profit (a 60% take out) is £703.61 – not bad for a starting bank of £2000,00 and only 2 months in.

The remainder (40% of the month’s profits) is £469.07 – this is used to fund the Bank Increase. The Bank Increase is shown in column S – **Bank Increase**.

Thus, we start March 2018 with a new Starting Bank of £2,469.07

Accordingly, the stakes (shown on column p – **Stake**) have gone up to £123.45 (5% of the new bank as we are staking to a 20 point bank.)

#### March 2018

March 2018 was another good month for us.

We started the month with a bank of £2,469.07

We ended the month with a bank of £3,632.20

That means that we made a profit on the month of £1,163.13

This profit gets split with 60% going to our take out of £697.88 and 40% going to increase the bank; the Bank Increase is £465.25

So far, after 3 months (and only 2 of them profitable) we have increased the bank from its initial £2,000.00 to £2,934.32

Along the way we have managed to take out £1401.49 – that’s exactly 70% of our initial bank.

#### April 2018

April 2018 was also a good month for us.

We started the month with a bank of £2,934.32

We ended the month with a bank of £3,695.42

That means that we made a profit on the month of £761.10

This profit gets split with 60% going to our take out of £456.66 and 40% going to increase the bank; the Bank Increase is £304.44

So far, after 4 months (and only 3 of them profitable) we have increased the bank from its initial £2,000.00 to £3,238.76

Along the way we have managed to take out £1,858.15 – that’s about 93% of our initial bank.

Now, I’m not going to go through every single month (and I can hear you sighing in relief) but there is one interesting month that I do want to show you.

#### July 2018 – a bad month…

In July 2018 we had a terrible month.

We started the month with a bank of £4,963.05

We ended the month with a bank of £3,165.53

That means that we made a loss on the month.

Thus, no take out.

The stakes get readjusted to 5% (because we are betting to a 20 point bank) of the bank.

However, it’s not all bad news…

After 7 months we have increased the bank from its initial £2,000.00 to £3,165.53

Along the way we have managed to take out £4,444.59 – that’s more than double our initial bank.

With an 80% strike rate system you can have a bad losing month and still have a smile on your face – it’s just a matter of perspective.

#### December 2018

Just out of interest, we end the year (2018) having taken out £6,284.73 and the bank standing at £4,432.41

To put this into real words – in 2018 we would have doubled our bank but still managed to take out over 3 times our initial bank in profits.

And, believe me, 2018 wasn’t a good year for us!

### Conclusion…

So, over the 2 years data that I have used to explain the Annuity System, what do we end up at?

As you can see, December 2019 wasn’t a good month for us – we made a loss on the month of about £510 but…

Although this sounds like a lot, by then we are betting to £828.80 stakes so, really, we are only down on the month by 0.625 of a point.

After 2 years we have increased the bank from its initial £2,000.00 to £16,069.46

Along the way we have managed to take out £25,627.12 – that’s almost thirteen times our initial bank.

Now, I don’t know about you but I can’t afford to put £2,000 aside for a bank (remember, it has to money that I’m prepared to lose – and I’m a really stingy git; I work too hard earning the stuff in the first place to fritter it away.)

**So, lets put this into real world, average person numbers…**

If you started with a bank of £200 (thus, initially betting to £10 stakes), after 2 years your bank would have grown to £1,607 and you would have taken out about £2,563 in take outs along the way.

And, remember , you’d now be entering 2020 betting at £80 stakes.

It’s also worth mentioning that, at no time during the 2 years, has the bank been even close to being threatened. Sure, there was a flat period in late 2018 but when that happened we’d already taken out more than twice our original bank and our bank had increased at that time by about 50%

In actuality, I probably would have adjusted my take out percentage upwards a few times along the way to the point that I’d probably be starting 2020 taking out 80% of the monthly profits every month and re-investing just 20% to grow the bank but…

That’s just my character showing through.

Thank you for taking the time to read this…

If you want to see the spreadsheet that I used to record the selections (and the results) for the annuity system, please feel free to download… the-annuity-system.xlsx

You will see that, had you started with a £2,000 bank (and, thus, initially bet to £100 stakes) and taken out profits every month (where the month end bank was in profit for the month) you would end up, after 2 years, with your bank at £16,576 and you would have taken out, over those 2 years,

£25,627 in profitsalong the way.Not a bad return for a £2,000 investment!

If you want to read about how I came up with the system, you can read about it at… How I Built The System.

If you are interested in my philosophy on making small profits but, lots of them, I try to explain that at… The Hare and the Tortoise.

And, finally, if you want to see how I came up with Place Profits, I explain that at… When Life Gives You Lemons.

My kindest regards