- As the story begins, we are introduced to Hester, a woman who lives with her husband, two daughters, and a son in a nice neighborhood.
- Hester is dissatisfied with motherhood and feels that she needs more money in order to maintain a more luxurious standard of living.
- The children also sense their mother's desire for more wealth. They can hear the house whispering about money.
- One day, the son, Paul, asks his mother why they don't have a car of their own like their uncle Oscar.
- The mother explains that Paul's father has no luck, and is unable to make as much money.
- Paul declares that he has luck.
- Paul starts to spend a lot of time riding his rocking horse. He believes that if he rides the horse long enough, it will tell him where he can find luck.
- Paul's sister, Joan and his nanny are annoyed by his rocking horse habit.
- One day, Paul's mother and Uncle Oscar watch as he rides on his rocking horse.
- Paul's mother comments that he is too old to be riding a rocking horse, but Uncle Oscar is amused that Paul names his horse after winning racehorses.
- Uncle Oscar asks Bassett, the family's gardener, whether he's been talking about horseracing with Paul, and whether he puts any money on horses for Paul. Bassett hesitates.
- Uncle Oscar then asks Paul whether he puts money on the horses.
- Paul tells his Uncle Oscar that he has been winning a lot of money betting on horses—getting his start with a ten-shilling note that was a gift from Uncle Oscar. He always keeps twenty pounds in reserve, and has plans to bet three hundred pounds on a horse named Daffodil at the next race.
- Uncle Oscar humors Paul, and offers to put five pounds on a horse for him. Paul asks the money be put on Daffodil.
- Daffodil wins.
- Uncle Oscar still doesn't believe Paul when Paul says that he now has fifteen hundred pounds, with twenty in reserve and twenty more won using Uncle Oscar's five pounds.
- Uncle Oscar confronts Bassett about the money.
- Bassett reveals he and Paul have been partners. Bassett has been holding Paul's money for him.
- Paul explains that when he's absolutely sure about a horse, it's a sure win. If he feels even a little uncertain about a horse, they usually lose.
- Uncle Oscar decides to be a partner as well.
- For the next big race, Paul predicts that a horse named Lively Spark is going to win. Paul places a thousand pounds on the horse, Bassett places five hundred, and Uncle Oscar two hundred.
- Lively Spark wins at 10-1 odds, meaning that Paul wins ten thousand pounds, Bassett wins five thousand pounds, and Uncle Oscar two thousand pounds.
- Paul wants to give the money to his mother, but doesn't want his mother to know that it's from him or how he's made the money.
- Uncle Oscar arranges for a lawyer to send a letter to his mother, informing her that a relative has left her five thousand pounds to be distributed over five years, that is, one thousand pounds per year on her birthday.
- When his mother's birthday approaches, it seems that the house has been whispering more about money than usual. Paul now has meals with his parents; he is too old for a nanny.
- When his mother receives the letter about the thousand pounds, she visits the lawyer and asks for five thousand pounds all at once. Paul agrees, and Uncle Oscar arranges to have the whole five thousand pounds given to Paul's mother.
- Paul's mother spends the five thousand pounds on home décor and an expensive new tutor for Paul. But with all the money, the house begins to whisper even louder that there must be more money.
- Paul is desperate to win, but he isn't absolutely sure about the Grand National, where he loses a hundred pounds. He's also unsure about the Lincoln, where he loses fifty pounds.
- Paul's mother worries that Paul seems headed toward a mental breakdown, and she suggests that he takes a break at the seaside.
- Paul wants to bet on the Derby race, and convinces his mother not to send him away until after the Derby.
- By this time, Paul has had the rocking horse moved from the nursery into his room.
- Two days before the Derby, Paul's parents are at a big party in town. Hester suddenly becomes worried about Paul and calls the governess, who reassures her everything is alright.
- Paul's parents return home after midnight. Paul's mother discovers that Paul is still riding his rocking horse in his room.
- Paul collapses with a brain fever, screaming, "Malabar!"
- For three days, Paul lies ill and unconscious in his room with his mother at his bedside. Meanwhile, Oscar and Bassett have put their money on Malabar.
- On the third day, Bassett visits Paul, and informs Paul that Malabar has won. Paul has made over seventy thousand pounds on the race, with his total race winnings at eighty thousand pounds.
- Paul is overjoyed, but the excitement is too much for him and he dies that night. Oscar comforts Paul's mother.