How to Survive the Las Vegas Money Pit
I just got back from Las Vegas, so this seems like a fine time to talk about personal finance when you vacation there… because when you are in Vegas, you are hemorrhaging money.
Las Vegas is one of the most expensive places in the United States, right behind cities like San Francisco and New York. Everything’s more expensive in Vegas: gambling, shopping, dining, entertainment, nightlife, you name it.
I'll give you a quick example. I was in Caesars Palace in the cigar lounge, and I picked out a Padrón, which is a nice cigar. It was $56. That same cigar in the lounge in Pawleys Island where I live is $26. That's Vegas, man.
Gambling, though… that’s where you can lose a ton of money in seconds.
After I landed, I went to the sports book and started betting on the Yankees. They were playing the Twins, so I think the Yankees were favored -140. I put a hundred dollars on the Yankees, and they go down 9–0 in the first inning.
It was like setting a hundred dollars on fire. And that was just the start of my gambling for the weekend.
So, what role does gambling play in personal finance? Are you allowed to gamble if you want to lead a stress-free financial life?
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My Rule of Thumb
You can gamble, but it must be a small amount of your money. My rule of thumb is that it should be 0.1% of your income.
If you make $100K a year, you can gamble $100 a year—and that's it. If you make $1 million a year, you can gamble $1,000 a year.
Now, these are incredibly small sums of money, and most people would disagree with this approach. But that's basically what I do. I’m not a big gambler, and that's the rule I follow. You can observe it or not.
Plus, I’m building a house. I don’t want to lose a couple grand playing craps and blackjack.
The key takeaway is that you should view gambling as an entertainment expense. Not a way to get rich. It's like going to the movies or a concert. It's an entertainment expense.
Don't look at it as a way to make money.
The Materialism of Vegas
Of course, one way to survive Vegas is to avoid Vegas. There are a lot of cheaper places to go on vacation. You can go camping for 18 bucks a night at a campground, for instance.
But I love Vegas. I love the materialism of it. The nightclubs, the (window) shopping at the Tom Ford store, etc. You also see a lot of wild stuff there that you’re not going to experience in a tent.
Just don’t gamble away your life savings if you go.
On a personal note, my book, Those Bastards: 69 Essays on Life, Creativity, & Meaning, has been out for about three weeks. It's doing great. Sold a lot of copies so far.
I am going to be doing a book signing in New York City on Wednesday, May 3 at a bar called Irregulars on the Upper East Side. I hope you can make it.
If you bought the book and enjoyed it, please leave a review on Amazon. The reviews really help.
Jared Dillian
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