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Sports betting vs. the stock market
Green Bay Packers sports gambling
NEW YORK (CNNMoney)

Sports gamblers have lots in common with stock market investors.

They both believe they can predict the future, and they sometimes fall into the trap of making decisions with their hearts instead of their brains. And of course, they both hate to lose.

But don't let those similarities fool you. Gambling on sports may be more fun, but it's definitely a more risky use of money than putting it in the stock market.

In the long run, investors have the chance to make more money because there are fewer downside risks.

To put it another way, the stock market is a lot more forgiving than the MGM Grand (let alone your local sports bookie).

"A lot of people regard investing as gambling, but I frequently say no. Which casino in Atlantic City, Las Vegas or Macau pays the bettor 73% of the time?" said Sam Stovall, chief investment strategist at S&P Capital IQ.

That's the percentage of time that Stovall's research shows the S&P 500 -- the gold standard in the stock market -- has increased in value during the years since 1926.

Those are pretty good odds.

Related: 4 reasons September could be good for stocks

The betting appeal: Americans bet an estimated $380 billion each year on sports. It's easy to see why fans may be tempted to gamble on their favorite teams and athletes. Gambling on football star Peyton Manning to win might seem like a safe bet, especially compared with picking winners in the stock market.

"You're making a wager based on some facts and some intuitions. And in neither instance can you be guaranteed to be correct," said Randall Fine, managing director of The Fine Point Group, one of the casino industry's largest consulting firms.

Manning is really, really good at what he does for a living. Heck, even his commercials are funny.

But take it from one person who has lots of experience in both worlds.

"Betting is more difficult and riskier," said one resident of Hoboken, New Jersey, who bets on illegal gambling sites and also invests in stocks. He asked for his identity to be withheld due to legal concerns.

"A large, steady company has a low chance of plummeting and causing you to lose all your money, but even Peyton Manning doesn't cover the spread sometimes," he said.

S&P Above 2000? Thank Super Mario

All or nothing: Gambling on sports tends to be a zero-sum game. A bettor gambling on the Green Bay Packers will instantly lose his or her entire $500 bet if Aaron Rodgers and his teammates fail to win or cover the spread.

However, someone sinking $500 into Apple stock has little risk of losing that entire initial investment, especially in the short term. The stock might go up and down some, but it typically doesn't go to zero.

Related: Apple and 9 other stocks hit new records

Investors also have the ability to spread their money out among many stocks. People often invest in funds that buy dozens or even hundreds of stocks, which helps reduce the risk.

And investors have greater access to tools that can minimize the risk of losing money. For example, a stop-loss order instructs a broker to dump a stock when it tumbles below a specific price.

Such hedging tools are not as readily or even feasible to sports gamblers, Fine said.

At the same time, investing in stocks actually carries higher upside potential. While many stocks offer steady returns, investors sometimes hit the jackpot (think: buying Apple back in early 2009 or Tesla in 2012).

Related: How $2 billion Clippers bet could pay off

Gamblers and investors also have far different time horizons.

A stock can theoretically be held onto for an infinite amount of time, but a sports bet can end in the blink of an eye.

Even the unlucky investors who jumped into the market at its peak in October 2007 eventually made their money back when stocks reclaimed their pre-recession levels in 2013.

The same can't be said for those who bet big on the Denver Broncos last Super Bowl.

"You can hold onto your betting tickets all your life, but you're not going to get squat," said Stovall.


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Top employees to see big bonuses this year and next
What can you buy with a Wall St. bonus
NEW YORK (CNNMoney)

Are you a superstar on the job, exceeding all of your company's goals? Good news: You're likely to get a boffo bonus for this year and most likely next year, too.

Companies are setting aside a record high level of payroll (12.7%) for variable, performance-based pay, according to a new survey by Aon Hewitt.

The reason: to attract and retain talent.

As the job market has gotten stronger, lots of companies are competing for the best workers, and that's pushed more firms to offer bonuses related to performance, according to Ken Abosch, leader of Aon Hewitt's compensation practice.

A full 91% of companies surveyed this year said they have a variable pay program. Back in 2005, only 78% did.

So what does a bigger bonus budget at a company mean for the average person? Not nearly as much as it means for the very best employees.

Related: Unlimited vacation days and other perks you don't get

Abosch estimates that average salaried performers might expect to see bonuses worth between 10% and 20% of their base pay. The top performers, however, are more likely to see between 15% and 40%.

Raises are also likely to be higher for the best of the best.

Tradeoff: Lower pay, but a bigger 401(k)

Aon Hewitt's survey found that companies are giving average performers a 2.7% bump in base pay this year, while top performers will see a 4.4% increase. Overall, companies said they're giving workers an average raise of 2.9% in 2014 and plan to give 3% in 2015, the survey found.

Beyond performance, raises are also determined by where workers live and the industry they work in.

For instance, those who live in Denver, Houston and Los Angeles are likely to see higher average pay increases -- north of 3.2% - while those in New York, Minneapolis/St. Paul and Milwaukee will see pay bumps of around 2.8%.

Meanwhile, workers in the oil and gas industries can expect to receive some of the biggest raises (3.8%), while those in education (2.7%), government (2.6%) and paper products (2.6%) might see some of the lowest nationwide.

Of the 1,064 companies surveyed by Aon Hewitt, 38% were in manufacturing, 61% in service industries and the rest were in other industries.

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America's favorite credit card company is...
Credit card tech to protect your money
NEW YORK (CNNMoney)

After seven years of topping the list of America's favorite credit cards, American Express finally has some competition.

Discover (DFS) tied American Express (AXP) for the number one spot this year, according to J.D. Power's annual report on credit card satisfaction.

Both companies received scores of 819 out of 1,000 based on survey responses from 20,000 credit card customers who rated issuers on their terms and conditions, interaction with customers, billing and payment policies, rewards programs, resolution of cardholder issues, and other services.

The key to success for American Express and Discover: extremely effective and accessible customer service, especially when it comes to getting help from representatives over the phone, online or via a mobile app, survey respondents said.

Related: Shoppers beware: Retail credit card APRs average 23%

Across the 10 biggest card issuers, the average satisfaction score was 778 this year -- a record high that was up from 767 last year.

Much of the bump is likely due to issuers piling on rewards, hoping to stand out from competitors, says Jim Miller, senior director of banking services at J.D. Power.

Why your credit score might go up

Since the pool of creditworthy Americans without a card is growing smaller, issuers need to lure customers away from each other to succeed. And it seems to be working: 10% of customers said they switched cards this year -- up from 8% last year.

"The market is ultra-competitive and credit card companies are using reward programs to make their card more attractive," said Miller. "However, [what's really important is] understanding your customers, knowing what motivates them and aligning rewards and benefits to their needs."

Where does your issuer rank?

1. American Express, Discover
2. Chase
3. Barclaycard
4. U.S. Bank
5. Wells Fargo
6. Bank of America
7. Capital One
8. Citi
9. GE Capital Retail Bank

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Why I left a job in finance to play video games
ben wu trader gamer
NEW YORK (CNNMoney)

When Ben Wu graduated from college in 2009, many young people couldn't even get a job. But the biomedical engineering major landed a coveted spot at a trading firm in Chicago.

He found the work fast paced and it paid well, but something was missing. He asked for some time off in 2012. He quit a week later to become a full-time video game player.

What seemed like a crazy move at the time has turned out to be one of Wu's best trades. He is now at the forefront of the "eSports" movement, which is bringing video game tournaments to the mainstream, similar to what happened with poker.

"Some say that gaming is what children or teens do, as if it's a dirty thing," Wu told CNNMoney. "But it's very dynamic. It requires teamwork, thinking out of the box and being creative. It's an outlet to develop your brain."

Related: Why I put World of Warcraft on my resume

Growth of eSports: Thousands of people watch Wu's every move in his online gaming tutorials on YouTube and Twitch, the streaming service that Amazon (AMZN, Tech30) just bought for nearly $1 billion.

The people who tune in are often playing the game themselves and trying to use Wu's tips to make it to the next level. They can even send Wu messages with questions.

ESports are becoming so mainstream that a competition Wu did play-by-play commentary for in July aired on ESPN3, and companies like Red Bull, Monster (MNST) and Coca-Cola (KO)now sponsor big gaming events.

Related: Amazon buying Twitch for nearly $1 billion

To put it in dollar terms, Wu had what he dubs a "part-time job" during his Duke University days playing Defense of the Ancients -- known as DotA. He was a member of a Danish team that competed around the world. Winning a major tournament would result in players getting a few thousand dollars each.

"We were lucky to get 5-figure prizes in my day," he says.

The stakes are higher today. At a key DotA tournament in July known as The International, the winning team from China walked away with $5 million.

"DotA is so much more dynamic as a game than say, chess. It's so much more difficult to work as a team to overcome obstacles versus chess where you examine your own play," Wu says, trying to explain the appeal of a multi-player game like DotA. "There's not much of a social aspect to chess."

Related: MLB gets into the video game business

Master gamer: The purpose of DotA is to capture the other team's "ancient," kind of like the summer camp game of capture the flag. Two teams of five players each go head-to-head. They select characters -- much like picking teams in gym class -- that have different skills. Almost every obstacle in the game has to be overcome through teamwork.

The top teams hail from all over the world. Over 40 million people have watched final rounds of The International competition via Twitch.

These days it's hard to believe Wu hid his gaming from a college girlfriend and felt he had to find a "real job" after graduating.

Wu is better known in the gaming community as MerliniDota. It's a nickname he picked up in middle school. He uses it now for his Twitter handle and YouTube channel.

"There is a push to get a pro scene in gaming," Wu says. "The target age is 16 to 28, and 95% are males."

Most of the top players are 21 to 23. That's why Wu no longer competes actively. Instead, he has found his niche educating others on how to play and being a web personality at tournaments.

It might not be that far of a stretch to compare him to former NBA basketball player Bill Walton, who took his and UCLA and pro experience and channeled it into a top TV commentator gig for decades.

Wu laments what his professional career might have been if he were only a few years younger, but the reality is he's making more money on the gaming "scene" today than he did as a Wall Street-type trader.


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