Bankroll Management

Playing poker, that is, playing winning poker, is a business. The more I've read about becoming a winning (and one day professional) poker player, the more I hear about bankroll, about rate of return, expected gain, investment in pots, and so on. Poker really is a business, and requires a business-minded mentality to become successful at it.

Like any business, one needs start-up capital. I can't think of any really successful company in this day and age that does not have a healthy supply of liquid capital. To wit, I also cannot think of any successful poker player who does not have any capital, or a significant bankroll.

Continuing with the business principle, companies tend to invest capital into ventures based on a rate of return, and tend to avoid 'betting the bank', or simply put, invest a high percentage of their liquid assets in a single venture. Rather, they would tend to diversify their liquid resources, and would choose not to commit a high percentage to any such venture.

Poker does run on the same strain. Take this example. You have built a bankroll of $1000. Now bearing in mind that cashing in at Sit N Go tournaments is far from a 100% of the time prospect, it would be unwise to start playing $500+$50 buy ins. Two bad hands in two successive tournaments would eradicate your entire bankroll. The real key to poker bankroll management is to play within your means.

This has two beneficial effects. First, it greatly reduces the stress or importance of the money you have in the pot. For example, playing with half your rent money in a ring game will definitely introduce an additional high-stress factor into your game. Not only are you trying to focus on the game itself, you can very well (and I've been there before) worry greatly about losing your chips. This combination is a surefire way to lose all the chips you have on the table. Playing within your means, however, greatly alleviates this condition. It is true that we can even worry with the small stakes, but the amount of stress and frequency will be greatly reduced.

Second, it give flexibility for swings, notably the bad swings. In the example earlier, a swing of two bad hands would kill your entire bankroll. However, consider this. You have the same $1000 bankroll. You start playing $50+5 Sit N Go's. You can then last around 20 tourneys without cashing before your bankroll is dwindled away. And that's if you don't drop your buy-in level as your cash reserves drop.

As such, what I do recommend is to play with 5% of your bankroll at any one time. It does give you the flexibility to lose in the short term. We all have bad swings, runs of bad luck and bad beats. Playing within your means gives you the tools to build that bankroll effectively.

This brings me to one last piece of business. Rate of return. To really gauge yourself, you must keep track of your buy-ins and winnings. You'll get a much better sense of your progress after a large sample space, say 1000 tournaments. And in poker, like business, 10% return is a good mark to strive for. To bring it into the fold, if you played 1000x$50+$5 Sit N Go's, you should be up somewhere in the ballpark of a $5000 profit. Remember, that unlike conventional casino gambling, poker is not a quick cash fix, but rather a long process. Take time to enjoy it.

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