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So, you want to go pro. You’ve been beating the game forever and a day. Your poker skills are all that and a bag of Oreos. You’ve got sufficient bankroll and living expenses put aside and you’re thinking to yourself, “Self, I am so ready to do this. I am quitting the day job, gonna sleep till noon and play poker for a living.” Right, let’s talk about money management for a professional poker player.
I know lots of players who throw their money in a safe deposit box at the casino. They need some money, they grab some. They make some money, they dump some. The whole “need” thing gets a little fuzzy, though. Does Joe Poker really need to buy a $2,500 necklace for that girl he’s been dating for about two weeks so she can forget she was going to wait until she got married? What about wheels: BMW or Buick? Dinner: McDonald’s or Le Ritz? What defines need?
The decision that a poker pro makes regarding these issues is more important than that of a professional in any other field. For instance, when a carpenter goes out to dinner, he’s not paying for his meal with his hammer and saw; he gets to keep the tools of his trade safe to go make more money. For a poker professional, though, money is the tool of his trade. And it’s just not about keeping sufficient bankroll to play his bread and butter game. The poker professional sometimes has to consider the merits of moving up a level (and that demands a larger bankroll), as well as savings, retirement, etc. Most professionals don’t give this much thought, which is one reason you hear those rumors about this pro or that one going broke – because they have. It never was about talent – it was about money management.
Here’s a solution. First, find out what your nut is. Let’s say you need $800/wk to live comfortably and give yourself some wiggle room. I’d recommend giving yourself a 25% cushion. Life always costs more than you think. You’ll need money for entertainment, savings, health insurance, IRA, and for your dumb brother in college who needs money for books ’cause he lost the money he had earmarked for books in a campus poker game…
Next, pay yourself weekly. In our example, then, you’d pay yourself $1000/week. All remaining money goes into bankroll. Trust me on this – this is not yet a solution. This is what’s going to happen: Poker, like everything else in life, is eventually going to become a job – a daily grind. You’re going to want to take time off. You’re going to go to the tables one day, kill them for $2,000, and take the next 13 days off ’cause you’ve already made two weeks’ pay. This is fine until you run into a streak where every hand you get is crushed on the river by a two-outer for a couple of weeks in a row. You pay yourself out of your bankroll, even though you had a break-even or losing week, and now your bankroll is dwindling because you didn’t pad it when times were good by putting in the hours like a dedicated employee would have. So how do you stay motivated? Good question – here’s the solution:
Put in the time. Work a forty-hour week, keeping good records all the way (which you should be doing anyway). Let’s continue to work off of our $1,000/week model. At the end of every quarter (13 weeks), add up everything you’ve earned. Let’s say you were playing $20/$40 and earned exactly one big bet an hour for 40 hours a week for 13 weeks. That would come to $20,800. You’ve already paid yourself $13,000 in salary which would mean that, during this quarter, you’ve earned an additional $7,800, which is sitting in bankroll. Award yourself half as a bonus. That’s $3,900 to you for staying motivated and continuing to put in the hours, instead of taking it easy and slacking ’cause you had no one to answer to. Your permanent bankroll would also increase $3,900, and so you are taking steps to increase your long term security, while still enjoying a bit of sugar now.
If you went pro while sitting on a reasonable bankroll of 300 big bets to play $20/$40 ($12,000), and at the end of the year you had earned an average of one big bet an hour and put in 40 hours a week for 50 weeks (you absolutely need at the very least, to take a two-week vacation or two one-week vacations), then this is what you’d be looking at:
You would have earned $52,000 in salary and $14,000 in bonuses for a total annual earn of $66,000. Your bankroll would have more than doubled from $12,000 to $26,000. If you continued in this vein for five years, averaging one big bet per hour along the way, your bankroll would have swelled to $82,000 – if it were sitting in a safe deposit box somewhere. You can do that and you’d still be so far ahead of the field that you could give lessons, or you could invest a good portion of it. Once you get beyond immediate needs and safety net, bankroll doesn’t need to remain liquid. Even sticking that $14,000 you were adding to bankroll into a money market account earning 5% annually would have, after five years, added another $10,000 to bankroll.
Learning how to beat the game is a good start. Once you’ve achieved that, though, learn how to stay in the game.
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