How To Successfully Play Poker For Years Without Going Broke
Have you ever noticed that there are very few poker players in the world who manage to play the game well, AND leave with their finances intact?
We would know, as we run a successful San Antonio poker club. We may not be Las Vegas, but we have a large community of active players:
“The San Antonio and New Braunfels players are some of the best you’ll find,” said Larry Wright, of neighboring McQueeney. “There are four or five old-timers with 10-15 years of experience in the big games that have seen it all. They play in the regular games and make for a very tough go at it. The people trying to make it in poker have to get through those guys first. I believe the games in San Antonio are tougher than the games in Vegas.”
In 2012, San Antonio had 25 area players who cashed for a rough total of $1.8 million. Imagine what that number is like in 2018!
At the same time, you’ll see many of these high-level players fail to achieve the financial freedom they were looking for when they started playing poker.
The #1 reason for this massive rate of failure is poor money management.
It’s not just about handling the wild up-and-down swings of a poker match where hundreds of thousands of dollars are at stake with a single hand.
It’s about maintaining a strong psychological edge when you are NOT at the table.
In other words, are you able to have the mental discipline required to follow a financial plan? Can you play poker at a professional level while also having enough money left over to pay your bills and build up your savings?
Are you able to win AT the table and AWAY from the table?
If so, you can consider yourself in the rare-air 1% of all poker players in the world.The sad thing is that you don’t even need any special talents and skills.
All you need to successfully play poker for years without going broke is to follow a few principles consistently over time.
PRINCIPLE #1: Keep Your Bankroll in Check
Your bankroll can be defined as the amount of money that you are specifically dedicated towards playing poker and nothing else. It is not a part of any of the finances that make up your life spendings.
Good bankroll management means that you will choose an amount which will not interfere in any way with your mandatory monthly payments (food, bills, rent, insurance, healthcare, etc.).
To put it another way, if you lost all of your bankroll in a doomsday scenario, you would still be able to meet all of your financial obligations on time without any issues.
In doing so, you will be able to play more poker games for a longer period of time, which gives you the chance to gain more experience and sharpen your skillset.
Here’s an example that will help you determine how much bankroll you should have in order to play poker at a safe level:
Let’s say that you want to play No Limit Texas Hold’Em at cash tables, and you have a small blind (SB) of $0.01 and a big blind (BB) of $0.02.
(To learn more about small blinds vs. big blinds, read this Wikipedia article)
A buy-in (i.e. the minimum amount of money you must pay to join a game and get a seat at the table) is usually 10-100x the pre-determined amount of the big blind. If we’re playing a $0.01/$0.02 game, our table shows that the buy-in is $2.
There can be a “maximum” buy-in, which limits how much money you can put into a game, but that’s not relevant for this discussion.
With that information in mind, how large should your bankroll be?
According to the table, it is recommended that your bankroll is 25 times greater than the minimum buy-in. If you go into a game with a buy-in of $2, your bankroll should be $50 (25 buy-ins).
Many experts will say that 25x is the LOWEST amount you should have, and anything less than that is venturing into high-risk gambling.
They go as far as to recommend that you have a minimum of 100 buy-ins. This will allow you to financially withstand variance and wild swings that will inevitably take place if you are playing hundreds – if not thousands – of games in a month.
That defines the bankroll you are bringing into a SINGLE game.
Keep in mind that this is separate from TOTAL MONTHLY bankroll, which is the amount of money you have set aside to play poker for a particular month.
If you are going into a cash game, a general rule of thumb is to avoid taking more than 10% of your total bankroll.
Using the example described above, if you are taking a bankroll of $50 (25 buy-ins) into a cash game, then your TOTAL bankroll for the month should be $500 (250 buy-ins).
This allows you to set a hard-limit on the amount of money you have available to gamble, and it will force you to be smart about your strategy.
First, you’ll have to be resourceful with the limited funds you have. Secondly, if you have a losing day and lady luck is against you, you will not be severely affected and you can live to play poker another day.
Here’s another example of bankroll management in action that’s a little more advanced:
In this case, you can see that the recommended bankroll to bring to a No Limit Texas Hold’em cash game depends on how serious you are as a poker player.
As a matter of fact, there are various factors that will determine the size of your bankroll. They are as follows:
- Level of Commitment: If you are serious about being a pro-level player, poker is either your sole source of income or a major contribution towards your overall finances. Naturally, you’ll set a higher bankroll in order to account for higher stakes and greater variance
- The Situation At Hand: If you are going to play at a tournament, you will require a much larger bankroll to stay in the game. Aim for anywhere from 100 to 500 buy-ins.
- The Type Of Game You Are Playing: A game with a higher level of variance will require more buy-ins. For instance, a multi-table tournament generally has more variance, a greater number of skilled players, and higher stakes compared to a cash game.
- Your Personal Goals: How much money do you want to make from poker? Do you have a realistic win rate that will allow this to be achieved? The more money you want to make, the bigger the bankroll you will need
- Your Comfort Level: This could also be defined as your style of playing poker (tight vs. loose). Players who are more tight and conservative can get away with a smaller bankroll. On the opposite side of the coin, you need a larger bankroll to account for larger variance.
Naturally, your bankroll is not set in stone. As you get better at the game and save up more money, you can increase the amount you set aside exclusively for poker over time.
If you happen to have a month where your wins exceeded your bankroll, you can keep your bankroll intact while putting the rest of the money towards your other finances.
However…no matter what happens, NEVER put all of your money in a single game or tournament.
This is a hard rule that should always be followed, no matter what. The professionals do not play perfect hands each and every time, and neither will you.
You will always be faced with the possible risk of losing everything. Variance will kick in and sometimes you will have a streak of losing games.
Betting it all on a single game will only put you under immense mental pressure and stress, leading you to make bad decisions that will only set you back financially.
Bankroll management is so essential because it acts as a form of protection when you have a bad day of losses. You can always recharge, get your mental state together, and try again when you are feeling better the next day.
Your limits have been set by you for a reason. Have the self-discipline to abide by them, even when you “feel” like you’re one hand away from a major win.
PRINCIPLE #2: Have Several Months Of Living Expenses Saved Up
One of the most frequently heard strategies suggested by financial experts is to have several months of your living expenses (NOT income) saved up ahead of time.
Some will suggest that 3 months’ worth of expenses is a good benchmark, while others say that you should aim to have a year’s worth set aside in the case of an emergency.
Food, rent + utilities, medications, transportation, insurance, and recurring bills would be your mandatory expenses. These are the bills you HAVE to pay, no matter what!
Furthermore, don’t forget that if you want to become a full-time professional poker player, there are certain factors working against you.
Unlike a 9-to-5 employee, you don’t have a regular steady paycheck. Much like freelancers and contractors, you could have a bad month due to taking on some heavy losses.
If you aren’t single and have to support a growing family, you’ll likely need even more money to keep yourself afloat.
Keep in mind that these mandatory costs are outside of tournament-related costs. Buy-ins, travel, hotel, meals, entertainment, and more can easily eat into your profits:
“If this pro played only $500 buy-in events and averaged four buy-ins per week, that’s $2,000 each week in tournament buy-ins alone.
If this player travels around (or even stays in his general area) and plays 40 weeks a year, he is racking up $80,000 in tournament buy-ins. Remember where I said he cashes in 20% of those events? That’s 32 out of 160 events a year.
Assuming that the average cash is double his buy-in, or $1,000, he is looking at a return of just $32,000 on his $80,000 investment. This stat alone shows why finishing in the top three of poker tournaments is so important.
If this player has one win of $75,000, and averages $1,000 per the other cashes, he now has a return of $106k for the year or a profit of $26,000.
Wait; did I say a profit of $26,000? Remember all of those other expenses I just listed? You have to figure those in as well to figure out you true profit. Odds are that even with a big win, this player didn’t finish the year ahead.
Of course, you can control your expenses to some degree depending on whether you play live or online and by how much you travel. Many pros, tournament and otherwise, don’t go outside their local area except for major events like the World Series of Poker.
PRINCIPLE #3: Hire a Financial Advisor to Help Plan Your Long-Term Future
In our San Antonio card house, one of the very first things we recommend to aspiring professional players is to work closely with a financial advisor (or accountant).
Believe it or not, a financial advisor can help you completely re-structure your long-term financial goals to ensure that you keep all of your hard-earned winnings:
“Among these benefits are guidance on developing an overall investment strategy, asset allocation, minimizing taxes, rebalancing, and how to structure/time withdrawals from your retirement accounts.
Each of these services can incrementally boost a client’s returns — sometimes steadily, sometimes sporadically.
But the single biggest way a financial advisor can add value — up to 1.5 percent per year of increased annual returns — is through something called behavioral coaching.
As every good poker player knows, scared money don’t make money. The best financial advisors are able to keep their clients’ fears and emotions in check by providing steady, fact-based advice and reassurance when the markets get wobbly or crazy.”
It’s best to sign up with a financial advisor who has specific experience in working successfully with poker players. They can help you keep financial records that allow you to file and report your annual taxes properly.
Your advisor is a third-person observer looking into your money-spending habits, and will be able to help you save money while investing for the future at the same time.
They can help you decide how you are going to build up your savings, and provide guidance on the best way to prioritize the distribution of your winnings.
It may even be the case that your advisor opens your mind to the possibility of diversifying your income streams. There are multiple ways to earn money on the side using your poker expertise:
- Sponsorships – the more of a “big deal” you are, the more value you can command
- Coaching, whether independent or for a major organization
- Running a poker-related business
- Selling information products in the poker industry (books, courses, etc.)
- Take a consulting role within the poker industry/media
CONCLUSION: It’s All Up To You
When you are serious about making poker a full-time career, everything that you do changes.
Just ask the tens of thousands of poker players who have managed to make a successful living from it, whether playing online or attending live tournaments broadcast on national television.
There is no question that poker provides a lucrative and flexible lifestyle to those who are willing to put in the work to get good at the game.
Even though it is considerably more difficult to win due to the increasing number of participants, there is nothing stopping you from being a profitable full-time player.
With that said, you now know that being skilled is not enough. You need to plan your financial future in advance and treat your poker career like a business that seeks to maximize profits.
Making your financial well-being a priority forces you to focus on yourself and stop comparing yourself to your competitors. They have their own challenges to deal with, just like you have your own unique set of circumstances to handle.
At SA Poker, we highly encourage people to talk about the importance of remaining profitable in a game that is highly emotional and mentally challenging.
If you ever feel like you’re on a losing streak and need to take a break, we offer high-speed WiFi along with delicious meals and tasty drinks. You’ll be able to relax while watching your favorite sports on one of our big screen TVs.
We also have a tight-knit community of poker players at all levels who encourage an atmosphere of safety and comfort, so there’s always somebody to talk to about bankroll management. 😉