As a kid I used to watch one of my older friends gamble, he used to place bets on sports books, mainly soccer. He was also into gambling online, used to play Blackjack and most of the time lose whatever he won on his sports bets.

One day we sat together and he told me he has about $400 left in his bank account, and that he must get back what he lost. I tried to convince him not to do so, providing him with numerous incidents in which he only lost more money when trying to do so; Never mind the fact it didn’t work, he was deeply into this drug.

That night he slowly topped $1940, a bit less than what he lost during that week in gambling, I begged him to get out and deposit the money in his bank account, but he held his breath for a moment and said “Only $60 more”.

He never got the next $60, instead - he ended up with $0 to gamble with, and $0 in his bank account.

Let alone the fact that you shouldn’t get so deep into gambling. We all know the consequences of that and obviously most people don’t have a compulsive gambling problem. There are 2 important lessons that all of us (not only gamblers) can learn from this story.

Have an exit strategy
This is something every educated investor knows. But since most of us aren’t, here’s the deal: When investing in something you can either lose or earn money from, you got to have an exit strategy.

Few people go into a casino with $300 and say “I’m going to quit when i have $600 in hand”, they don’t even think about winning a certain amount, they only tell themselves one thing “I don’t want to lose these $300″.

Not only they are thinking about loss and failure, they didn’t consider an exit strategy in case they win. This means they might have $1000 in profit and keep playing until they lose them all. Many will even go to their hotel room and grab 300 more to get back their money or prove they’re not losers.

A winner knows when to leave the table
Sometimes things just won’t go the way you planned, and while you’ve set yourself a nice exit strategy in case you start banking, you may also want to asses what’s your exit strategy in case of loss.

Now surely you don’t want to be a loser and say “I’m leaving after i lose $300″, because winners never plan on losing. Instead, you should know that losing is part of the game, no matter how hard you’ll try to avoid it.

There will be times when a table/stock is just not right for you, you keep losing no matter how good you feel or how focused you are, a loser will grab another tequila and try to prove he is not, a winner knows he’s got to lose to know how to win, and will call it a night.

Winner = self control, attitude & two-way strategy
Loser = runs after his lost money, cowardness & one-way strategy