Poker Money Management - Online Poker Bankroll Management

Bankroll Management is one of the key elements in being a successful poker player. There are different ways of managing your your poker bankroll, but the important thing is to make sure you are doing something.

One of my friends, Seth Pennet, sent me a great email discussing bankroll management and how it might pertain to me. I wanted to post it on Poker-Babes so others could benefit from it. Remember that it was originally written as an email to me, but it can be applied to other limits and games...

Dear Shirley,

This is the Smith Barney lecture.

"It's not what you earn but what you keep."

I actually do a review with many of my clients to show them the benefit of either taking a 15 or 20 year mortgage vs. a 30 year mortgage or showing them that by dividing a 30 year monthly mortgage payment in two and making the 1/2 payment every 2 weeks that they will shave years off the mortgage and save thousands. Nothing is without a cost of course, so when they make the 1/2 payment (called a bi-weekly payment by some) 2x's a month they actually make the equivalent of 1 extra payment per year. 52 weeks divided by 2 = 26 payments which divided by 2 equals 13 whole payments. With that extra payment the 30 year mortgage gets shaved down to 22 years. It's sort of a forced savings plan as the extra payment goes to pay down the principal balance.

*Mortgages are heavily front weighted with interest. Bottom line is it is all in the planning.

If your head hasn't exploded yet-

The question of "where do I want to be financially and how do I get there"?

For poker bankroll growth this is how I view things:

1) I look at what the existing funds I have available to play with are. Should not touch savings and expense accounts. I'm saying this because I know you already have a poker bankroll as well as an income from the site/s.

2) What are my financial goals and are they realistic? Do you look to make $500 per day/ week / month/ etc.... This is from poker only here.

3) Figure this: You play the 30/60 Omaha Hi Lo as your regular game when you are feeling yourself. The large bet is $60. Working from losses to gains, a common axiom I've heard is to not lose more than 30 large bets which = $1800 in one session/day (I consider any day a full session if you plan an hour or 12 hours).

$1800 div. by 3% = $60,000. So if you have a $60K bankroll you can handle an $1800 loss on occasion without much impact on your poker financial foundation. Some will go to 5% but I think at these levels it doesn't have positive value. That is just me. 750 bets big bets is actually what I've read pros should maintain in a healthy bankroll. $45K in this example. What I really prefer is to have the $60K + in the bankroll and use the 750 BB's as a barometer. Don't allow yourself to lose more than 3% of $45,000 which = $1,350. Reason being is that when you are in that deep something isn't going your way. It isn't your day/night or the table isn't in your favor.

Everyone is different and some can go deeper into the bankroll than others.

To me the 300 x's the big bet philosophy is better as a bankroll for lower levels and players that are starting out. Players that have reached higher levels financially I look at a bit differently. Losing 10% of a bankroll in one session in itself isn't crippling but doing it 2 or 3 times is at the very least constricting so I believe in a larger bankroll at higher limits. One reason being that I believe confidence in your financial footing allows for a comfort level and better quality play over time. I'd be interested to know what Steve Badger thinks.

For No Limit I use the 75- 100 x the buy in as a guide for a bankroll.

I know some players have the F/U mentality and are willing to go broke for the sake of making the correct plays but for the most part I've seen lots of good players go broke that had no need to. Playing well is almost useless without good financial management. Think like Joey Knish of Rounders and not like Mike McDermot. I know I know, you love Matt Damon lol.

* I know there are lots of different theories on bankroll management but the above is part of mine keeping in mind there are exceptions to everything.

4) HOW MUCH SHOULD I BE MAKING????? How much do I need to and want to make???
a) Per day on average?
b) Per Week
c) Per Month
d) Per year
e) and yes over the next 2 years at least. I try to think long term.

5) What else do you need money for in poker? Tournaments! How much and where will it come from? Is there a specific relationship to the cash you have on hand from poker income you are willing to spend? If not it is probably best that it should be.

6) O.K. now figuring an hourly rate is something I just don't do for myself since I play mostly No Limit cash and I operate a bit differently than most as I am not a full time player. What I do is set goals for myself and try to meet them. Once I do, I set another goal. I tend to think you need to be more specific since you log very regular hours and are a professional.

You play mostly limit so I'll break it down this way. With a 30/60 limit game you should make 1.5 -2.25 big bets per hour in order to be productive as a pro. 2.25 x 60 ($135 per hour.) X 6 hours = $810 per day. I know that some will say the number should be below 2 big bets but I don't buy that in a scoop hi lo game. I tend to believe that if you are playing to scoop pots your overall average over time will be higher than that number greatly because of the caliber of opponents. I may need you to give me some input here.

That total for 50 weeks w/ 5 day a week play is $202,500. At 1.5 big bets over the same period you make $135,000. When you consider multi table play the number can be far greater for each.

Now. Ask yourself, is that not only doable but is it something I should expect? Again, if you don't already know, I bet Steve will let you know if I'm off base.

7) Next is what percentage of my winnings will leave the bankroll and what will go to growing the bank roll?

8) Lastly, always review your game and bankroll management. Ask yourself, am I wasting any of my chips? MONEY! How much is it costing me over time? We all waste bets occasionally but cutting back can save you a fortune!

Remember, "It's not what you earn but what you keep." -- Seth

Read another article regarding bankroll management

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I actually do a review with many of my clients to show them the benefit of either taking a 15 or 20 year mortgage vs. a 30 year mortgage or showing them that by dividing a 30 year monthly mortgage payment in two and making the 1/2 payment every 2 weeks that they will shave years off the mortgage and save thousands. Nothing is without a cost of course, so when they make the 1/2 payment (called a bi-weekly payment by some) 2x's a month they actually make the equivalent of 1 extra payment per year. 52 weeks divided by 2 = 26 payments which divided by 2 equals 13 whole payments. With that extra payment the 30 year mortgage gets shaved down to 22 years. It's sort of a forced savings plan as the extra payment goes to pay down the principal balance. Mortgages are heavily front weighted with interest. Bottom line is it is all in the planning. If your head hasn't exploded yet- The question of "where do I want to be financially and how do I get there"? For poker bankroll growth this is how I view things: 1) I look at what the existing funds I have available to play with are. Should not touch savings and expense accounts. I'm saying this because I know you already have a poker bankroll as well as an income from the site/s. 2) What are my financial goals and are they realistic? Do you look to make $500 per day/ week / month/ etc.... This is from poker only here. 3) Figure this: You play the 30/60 Omaha Hi Lo as your regular game when you are feeling yourself. The large bet is $60. Working from losses to gains, a common axiom I've heard is to not lose more than 30 large bets which = $1800 in one session/day (I consider any day a full session if you plan an hour or 12 hours). $1800 div. by 3% = $60,000. So if you have a $60K bankroll you can handle an $1800 loss on occasion without much impact on your poker financial foundation. Some will go to 5% but I think at these levels it doesn't have positive value. That is just me. 750 bets big bets is actually what I've read pros should maintain in a healthy bankroll. $45K in this example. What I really prefer is to have the $60K + in the bankroll and use the 750 BB's as a barometer. Don't allow yourself to lose more than 3% of $45,000 which = $1,350. Reason being is that when you are in that deep something isn't going your way. It isn't your day/night or the table isn't in your favor. Windows - Mac Everyone is different and some can go deeper into the bankroll than others. To me the 300 x's the big bet philosophy is better as a bankroll for lower levels and players that are starting out. Players that have reached higher levels financially I look at a bit differently. Losing 10% of a bankroll in one session in itself isn't crippling but doing it 2 or 3 times is at the very least constricting so I believe in a larger bankroll at higher limits. One reason being that I believe confidence in your financial footing allows for a comfort level and better quality play over time. I'd be interested to know what Steve Badger thinks. For No Limit I use the 75- 100 x the buy in as a guide for a bankroll. I know some players have the F/U mentality and are willing to go broke for the sake of making the correct plays but for the most part I've seen lots of good players go broke that had no need to. Playing well is almost useless without good financial management. Think like Joey Knish of Rounders and not like Mike McDermot. I know I know, you love Matt Damon lol. I know there are lots of different theories on bankroll management but the above is part of mine keeping in mind there are exceptions to everything. 4) HOW MUCH SHOULD I BE MAKING????? How much do I need to and want to make??? a) Per day on average? b) Per Week c) Per Month d) Per year e) and yes over the next 2 years at least. I try to think long term. 5) What else do you need money for in poker? Tournaments! How much and where will it come from? Is there a specific relationship to the cash you have on hand from poker income you are willing to spend? If not it is probably best that it should be. 6) O.K. now figuring an hourly rate is something I just don't do for myself since I play mostly No Limit cash and I operate a bit differently than most as I am not a full time player. What I do is set goals for myself and try to meet them. Once I do, I set another goal. I tend to think you need to be more specific since you log very regular hours and are a professional. You play mostly limit so I'll break it down this way. With a 30/60 limit game you should make 1.5 -2.25 big bets per hour in order to be productive as a pro. 2.25 x 60 ($135 per hour.) X 6 hours = $810 per day. I know that some will say the number should be below 2 big bets but I don't buy that in a scoop hi lo game. I tend to believe that if you are playing to scoop pots your overall average over time will be higher than that number greatly because of the caliber of opponents. I may need you to give me some input here. That total for 50 weeks w/ 5 day a week play is $202,500. At 1.5 big bets over the same period you make $135,000. When you consider multi table play the number can be far greater for each. Now. Ask yourself, is that not only doable but is it something I should expect? Again, if you don't already know, I bet Steve will let you know if I'm off base. 7) Next is what percentage of my winnings will leave the bankroll and what will go to growing the bank roll? 8) Lastly, always review your game and bankroll management. Ask yourself, am I wasting any of my chips? MONEY! How much is it costing me over time? We all waste bets occasionally but cutting back can save you a fortune! Remember, "It's not what you earn but what you keep." -- Seth Read another article regarding bankroll management
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Bankroll Management / Smith Barney