Going broke getting rich


by Peter Edwards

I’ve always been a bit entrepreneurial; always been open to the thought of a quick and easy buck; always been curious about the Bransons, Packers, and Murdochs of this world.

I’ve attended many a seminar; read many a book; talked to many a mentor. But without the genius of Gates, the audacity of Trump, the immorality of Zuckerberg, or the charisma of Oprah, it’s unlikely I’ll ever be in the “Billionaire Hall of Fame”.

I can understand people being envious of high-flying millionaires with their flash cars, big houses, fancy clothes and great smiles, but there have been times in my life where I have been just as envious of my parents’ $8,500 a year Aged Pension.

I’ve had a crack, mind you. But right now, my story is more one of what not to do. In fact, some of it is downright comical.

Like the time in 1987 when a couple of mates and I decided to systematically bet on black or red. The rules were:

  1. Wait till one of the roulette tables had a run of 5 of the same colour.
  2. Put down $5 to win $5.
  3. If we lost, double the bet to recover our money and win $5.
  4. Keep doubling until we won, then go back to waiting for the next run of 5.

We did this for a few hours. It was slow going but, being on holiday, and needing more drinking money, we persisted and built our kitty. We were pretty happy until the inevitable happened. It got to 12 blacks in a row. We’d already spent $635, and now needed to bet another $640 just to win $5. We went for it. What are the odds of 13 in a row!? Well, mathematicians will tell you its pretty close to 50/50.

We did our dough and watched in amazement as it got to 16 in a row. It was a sobering thought to think that if we’d chased it, we would have had to risk $20,475 just to win $5. Apparently, all would-be get rick quick schemers start out backing black or red in roulette.

Then there’s the time I came up with a system on the horses in 1995. The rules:

  1. Pick the amount of money I want to win
  2. Forget the form, only back Tote favourites that were paying less than $3.
  3. Put enough on the favourite to win the target amount.
  4. If the favourite wins, back the next lower than $3 favourite to win the target amount.
  5. If the favourite loses, put enough on the next lower than $3 favourite to get my money back plus my target amount.

I’d done the numbers. Favourites paying less than $3 were winning better then one in every three races. I had enough money to sustain a run of perhaps seven losses. It was a no-brainer.

After six losses, it came down to a Class 3 (in Pakenham I think). What happened is so unbelievable that I still laugh about it. Two horses were vying for favouritism, both around $3. This obviously created enormous confusion and tension.

Just before the jump, one was the clear favourite and under $3 so I jumped on it to the tune of around $600. It had to win to get me back the $1200 I’d already dropped plus the $20 I was trying to win.

At the jump, the one I backed drifted to over $3, and the one I didn’t back was now the favourite at $2.90. I was absolutely livid until the home turn when the horse I backed pulled clear and was 2 lengths and extending with less than 100m to run. I was ecstatic until – without a word of a lie – the horse I was on broke a leg, stumbled and fell across the line but not before the favourite got to him. Wasn’t funny then, I can tell you.

 I was also part of a lotto syndicate created by a crazy Rumanian mathematician whose goal was to cover every combination in one of the jackpots that the US had every now and then. Crazy? Most certainly, but around three and half thousand Australians, including myself, invested a minimum $2,500 to be part of it.

The idea was:

  1. Wait for a jackpot that was at least 3 times the cost of covering all combinations of that particular lottery. His research showed that jackpots had never been won by more than two winners.
  2. Cover every combination when the criterion was met using the $10M pool we had.
  3. Pick up the cheque after winning, replace the amount invested + a further $2M to build the investment pool to cover the cost of entry for the more expensive lotteries, and split the rest amongst all shareholders.

He expected at least three jackpots a year, so for my $2,500 I was expecting a return of as much as $20,000 a year every year. Beautiful!!

My mate (also an investor) and I were driving to work one morning in the early 1990’s when we heard a news report about an Australian syndicate winning $US27M (around $AUS44M) in the Virginia State Lottery. It had to be us. Ecstasy!

We got confirmation from the syndicate manager a few days later. There was a hitch however. The crazy mathematician had not realised that with US lotteries, you could only get the full amount as an annuity over 20 years. To get an up-front lump sum meant we had to leave 50% on the table.

That seemed to be the prudent course of action, but there was even more bad news. The FBI, CIA and IRS wanted to know how the hell an Australian syndicate could cover all combinations of a US lottery. They froze the prize on the premise that it “might” be illegal to cover ALL combinations. After years in court, they forced the syndicate to accept the annuity which was then sold to an insurance company at a hugely discounted price. I got most of my $2,500 back, but about $6M went missing from the Hong Kong based trust fund. Strangely, the mathematician disappeared also.

There have been several other ventures I have dabbled in, but my favourite is when in the late 1980’s I had a share in a race horse named Marine Habit. It was a grey, and compared to other horses, he was a pony. It was managed by Classic Bloodstock, and Shelley never thought much of him.

He was a November foal, and struggled as a 2-year old. Struggled as a 3 year old also, until one wet day in July, he ran a fourth at Moonee Valley. He won his next start by 3 lengths in the country against older horses twice his size. It was music to the ears to hear Bryan Martin call, “Oh, he’s the one you wanted to be on all day.”

The “Habit” came back as a four year old looking a treat. “He’s not as talented as the others in our stable, but he’s honest,” Shelley would say.

Five wins (in the country) and 3 placings from 9 starts were as exciting as anything I’ve ever been involved with. The other horses in the stable weren’t faring so well, but they were bigger and better looking.

He missed the start by 3 at Kyneton one day, but came over the top of them over 1450m for a win with Michael Clarke on him. “He’s looking for 2000m,” said Michael. For his next race, the ‘stable’ entered him in a 1400m at Ballarat. He came second; was grinding. couldn’t catch the winner who was a specialist frontrunner with a pet distance of 1400m. “He tried hard, but he’s a plodder,” was the predictable explanation.

He’d won over $40,000; a terrific sum for a small plodder. One day he was entered in the Kilmore Cup; a $75,000 race. He drew barrier 4, was listed as a 12-1 shot, and was tipped to place by half the tipsters, with a couple even tipping a win. “Too hard a race. Those horses will be too slick for him.” He raced in the Sandown Country Cup instead over 1600m. There were 24 horses in the race, and he drew barrier 24…at Sandown…no chance of winning. The jockey was instructed to take him to the lead early, which was not his pattern of racing. The “Habit” hit the lead with 300m to go, but Port Phillip and 4 others came steaming past him as he blew up.

The final race of that spell, he won by 10 lengths at Pakenham over 1700m.

His first start of his next campaign was at Flemington. He was one of the favourites. He finished mid-field. Clarke told us that there was something wrong with the horse. When he asked Habit for an effort, he went but then pulled up.

A week later, Marine Habit ran at Ballarat. It was not clear whether there was a problem with his leg but the ‘stable’ thought they’d run him just to test it out. That was the last time he ran; for us at least. Bowed tendons do that to race horses.

Marine Habit’s just another get-rich-quick scheme that didn’t make me any money, but what a wealth of memories.

Thanks little fella.



  1. Pete – love these stories. I was always a sucker for the ‘Lucky Dip’ at the Primary School fete. You put in 50 cents and could win nothing, 10 cents, 20 cents, 50 cents or $2. The bloody thing emptied my pocket money tin. The worst part was that my old man was on the Lucky Dip stall and all he said when I ran out of money is “There’s a lesson in there somewhere.”

    I’ve got my own get rich quick scheme. To all you people who waste money going into Tattslotto each week, give your money to me, and in ten years I’ll give half of it back. Sound fair?

  2. Thanks Dips. And I love your get rich quick scheme. I’d dare say that most of the people who invested would also love it in Year 10.

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