If you want to make 'serious' money from betting on horse racing, then you have to take the whole business of betting seriously. Treat betting as a mere 'distraction' and your entertainment will almost certainly come at a cost.

In Part One of this series of articles on sensible money management, I said that much of the reason people will lose money through betting is because of bad habits. How do you overcome bad habits? Discipline, of course!

If you were running your own business, you would treat it as a business and not a hobby. You would get to your desk on time each morning. As well as doing the things you enjoy about your business, you would attend to all the mundane tasks necessary for things to run smoothly. You would file your tax returns on time. You would have a business plan and you would set budgets for attainable growth. You would aim to make a profit by earning more in revenue than you spend in costs. You would not continue to sell a product at a loss. Etc., etc.

To run a business takes a lot of self-discipline, and so it is with making a long-term profit from betting. It is not as easy as some people would have you believe. If this were true, then tens of thousands more people would be placing bets from their laptop by a pool in Spain, and there would be no more bookmakers in your local High Street!

If you are prepared to discipline yourself, then you are far more likely to elevate yourself from the 98% of punters who continually lose money through gambling.

The very first task you should undertake is to set up a separate account for your betting funds. It is essential you keep your betting activities separate from your other financial affairs, otherwise you will find it very difficult to see if you are making a profit, and how much return you are getting on your investment.

No-one needs to be reminded that you should only bet with money you can afford to lose, but the more money you can set aside for betting purposes, the more likely you are to see any worthwhile gains. You should view your betting bank as working capital, and an investment you have made in your own business.

Do not be tempted to place a bet using your credit card, or the debit card on your current account.

Anyone following my betting advisory service will know that I am always preaching about getting value when you bet. My philosophy makes perfect sense to me, but then I've been trying to drum the principle into peoples' heads for years! But going back to the analogy of running a business, you wouldn't pay £10 for a product from a wholesaler if you couldn't sell it for any more than an average of £5. You may make the occasional sale at £15 or even £20 but if the average return is only £5 then in the long run you will lose money.

The same principle applies when backing a horse - don't accept a price of 5/1 when the real chance of the horse winning should be represented by a price of 10/1

If you fancy a horse to win, but you cannot get the price you want, then have the discipline to let the horse run without your money on its back. Horse racing has been around for more than a century -- there will be other opportunities. You should not be betting purely for the thrill of risking money, and only putting your investment at risk with the potential of a good return.

Take the time to review how your strategy is working (or not). How much profit are you making? Which systems or tipsters are making you the most? Without continual review, you will not be able to maximise your returns (nor indeed limit your losses).

Your betting bank should be large enough to absorb any losing runs you will encounter from time to time. This is akin to managing your cash-flow of your business. Having a "large bank" does not necessarily mean having a lot of money sunk into your betting account. Moreover, it means you should be staking only a small proportion of your bank on each bet.

The same £1,000 bank fund could be divided into a large bank of 1,000 points, ie £1 per bet. Or it could be divided into a relatively small bank of just 10 points, ie £100 per bet.

As your bank grows, then the same small percentage of your total funds will represent a higher monetary value.

Do not be tempted to increase your stake on any particular bet. Set your proportional stakes plan and stick to it. Yes, review your stakes from time to time, but never alter your stakes on a whim, on hearsay of a strong bet, or for any other irrational reason. Be wary of getting greedy.

This is a good time to warn you of the perils of betting whilst under the influence. Never bet after having a drink. The reasons should not need further explanation.

If your method of selection is losing you money, then stop betting.

Allow me to expand upon the last statement. If you have a losing day, do not be quick to toss your system in the bin or cancel your subscription to your favourite tipster! Everybody has losing days, indeed everyone has losing weeks and bad months. However, after a reasonable period of time you will be fairly certain whether or not a particular source of bets is returning worthwhile profits.

Discipline will play a big part in managing your portfolio of systems. On the one hand you should not be too hasty to give up on a profitable system, if it suffers a downturn in performance. At the same time, you should be prepared to relegate a system from your portfolio if it is consistently losing money.

Always 'paper-trade' a system or tipster over a significant period of time (I would suggest at least two months) before actually committing any of your betting funds. If you are then confident enough to risk your own money on a system, then equally you should be prepared to endure two losing months before dropping it.

If you do find yourself starting to lose money at any point, never be tempted to chase your losses. Do not increase your stakes in an effort to re-coup what you have lost, as you may well find yourself with even greater, unnecessary losses.

To summarise, treat your betting activities in a business-like fashion. Develop a plan and have the discipline to stick to it. Below is a list of Do's and Don't's. For those who need help to adopt a disciplined approach, stick by these rules and you will not go too far wrong!

DO's and DON'T's

DO have a separate account for your betting funds
DO try to get value in the price of your bets
DO keep records
DO take the time to analyse your betting
DO be wary risking a high percentage of your bank
DO operate with a bank of suitable size
DO change or drop a losing system

Do NOT bet when you are drunk
Do NOT get too greedy
Do NOT bet without paying consideration to the price
Do NOT bet if you cannot get the price YOU want
Do NOT try and get rich quick
Do NOT chase your losses