BANKROLLING YOUR POKER GAME
Poker Strategy By Lou Krieger
Money and bankroll, not the same thing at all.
There are enough misconceptions about money and poker bankroll requirements to fill a fair-sized book, and enough players
with questions about betting limits, bankroll size, and related issues to fill the World Series of Poker tournament room at
the Rio.
Dispelling old money-management bromides First, lets dispel that old quit-while-youre ahead and quit-once-youve-lost-a-certain-amount
nonsense.
If you really believe it makes sense to quit while youre ahead, or whenever youve lost a given amount of money, youll find
yourself playing only when your results are banded between your stop-loss and stop-win limits.
Although quitting when youre ahead allows you to profit from the game, that strategy only makes sense if you decide to
quit poker entirely. If thats the case, and youre ahead in todays game, quitting puts that money into your pocket and youll
never lose it back.
But if you quit a winner today and lose tomorrow, youre no worse off than if you simply played on and lost the money you won
earlier in the session. All you did was pocket those winnings for a few hours.
The same analogy holds for setting stop-loss limits too If you plan on playing again and believe you can win, it makes
no difference whether you quit now or keep playing.
When youre thinking about whether to quit or keep playing, here are four things to consider:
If the game is good and youre a favorite, keep playing.
If the game is bad and you are an underdog, quit -- even when youre winning.
If a big win or a big loss makes you psychologically unable to play your best poker, quit the game -- but bear in mind
that youre leaving because you are no longer in the best poker-playing frame of mind; youre not quitting because you won or
lost some arbitrary sum of money.
If youre not playing up to the best of your ability, go home. The game will still be there tomorrow.
Gambling successfully is based on putting yourself in situations where you have a positive expectation. Winning poker
players find games where they are favored over their opponents. While favorites do lose some of the time, they show a profit
in the long run.
What should you do about your bankroll?
Many players confuse money management with bankroll management. They are two different things entirely.
Money management is all that unmitigated claptrap about setting stop-loss and stop-win limits. Its quite meaningless.
But what you do about your bankroll and how you manage it is an entirely different matter.
Theres a generally accepted theory that a bankroll of 300 big bets is required to offset the inherent variation in poker games.
That may or may not be true for you. Like so much about poker, it depends.
Bankroll issues for new professional poker players
If you are a brand new professional player whos diligently saved a playing stake and is about to move to Las Vegas,
Los Angeles, Atlantic City, Foxwoods, or any other poker mecca, youll be better off with a playing stake thats more than 300
big bets. Think of 300 big bets as a minimum playing stake, and right now you cant be sure how much youll need. While you
may turn out to be a world-class player who can get by on a smaller bankroll, its also true that you might be only a marginally
successful, high-variance player who needs more than the minimum to keep the wolf from your door. To be on the safe side,
400-600 big bets gives you a much better chance to survive and grow as a player.
In addition to your playing stake, you should have about 18-24 months of living expenses set aside to give you the
very best opportunity to succeed in your new profession.
If youre not a winning player, no bankroll is likely to suffice, and by the time you run through your playing stake
or the money you set aside for living expenses -- whichever comes first -- youll be faced with the hard choice of using one
of your two remaining bankrolls to subsidize the other. When that happens, youll find yourself clinging to your dream by
a thread and slipping.
Issues for experienced pros
If youre an experienced pro who has been earning his or her living for a year or longer, youve established an annual
hourly win rate and that can be used as a guide for managing your bankroll. Suppose youre playing $30/$60 holdem for a living
and find that you are able to beat the game for one big bet per hour. If youre playing 1,500 hours per year, you can figure
on making approximately $90,000 every year.
If you want to maintain a bankroll of 500 big bets, youll need $30,000. Since youre earning $90,000 you can pay yourself
a salary and take it directly from your winnings. You might also want to build your bankroll and promote yourself to the
$60/$120 game, or you might want to take a protracted shot at $100/$200. Just calculate the bankroll youll need at those
limits and see how you do. An alternative strategy, and probably a better, less risky one, is simply to take shots at the
bigger game from time to time to gauge your ability and confidence in whats probably a tougher game at a riskier limit.
There are far fewer issues for semi-pros
If you are a winning poker player, but have a real job too, many of these issues fall by the wayside. Your salary
pays for living costs, and if you hit a protracted losing streak, you can infuse your poker bankroll with discretionary earned
income.
Playing poker is always easier if you have additional sources of income, which is why so many successful poker players
invest their money in business ventures outside of poker. This diversification is a safety net of sorts. Its also the reason
many people become full-time poker professionals only after they retire from their day jobs. Once they have income from a
retirement plan, many of the issues related to maintaining a bankroll for playing poker and another bankroll for meeting living
expenses become redundant.
No issues at all for most poker players
If you play poker because you love the game, and play as a hobby, as most players do, you really have no issues related
to bankroll management. Low limit players -- actually all players who play at a limit that can be underwritten by discretionary
income -- dont really need to worry about squirreling away stashes of money for playing and living. If they lose their entire
playing stake, they can use part of their next paycheck to play again.
Most of us fall into this category, and when we do, poker is like any other hobby. Hobbies cost money, and the source
of that money is usually earned income thats diverted to underwrite these enjoyable, leisure-time activities. If you collect
old movie posters, build model railroads, or restore old cars, youre not any different from the poker hobbyist who loves the
game, plays for stakes he can afford, and enjoys himself whether he wins or loses.
Theres not much mystery to money and bankroll issues. Some of us will have them; others wont. Heres what you really
need to know.
Money management is a meaningless strategy for maximizing winnings or limiting losses.
Stop-loss limits, or quitting once youve won a predetermined amount of money, will neither stop your losses if you
are a losing player nor protect your profits if you are a winner.
Good players will establish an expected hourly win rate regardless of whether they quit after theyve pocketed a certain
amount of winnings or keep playing. But the more hours they play, the more they figure to win.
Poor players will probably lose their money no matter what they do.
If youre playing in a good game, and you are playing your best, stay in the game unless you have other obligations.
If youre in a bad game, get out of it now. Never mind if youre winning or not.
If youre not at your physical or psychological best, dont play. If you do, your condition will probably take itself
out on your bankroll.
If youre an aspiring professional player, youll need at least a 300-big-bet stake to play on, and another stake to
cover living expenses.
If youre an experienced, winning player, youll be able to use some of your winnings to pay for your living expenses.~~
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