Friday, May 25, 2007

Money Management For The Non Professional

There are a ton of good articles written by professionals regarding this subject.
Just type in to Google: poker money management

There is a ton of information out there for professionals and it is easy to find.

I am not going to try and get into money management for playing poker professionally, mainly because I think playing poker as a profession is a dumb idea, mainly due to the fact that if you are smart enough to beat poker in that significant a fashion your earnings in a profession without the huge built in luck factor would be 10 times your poker income. You could then amass your fortune, live off the interest and play poker fulltime without regard to paying bills with your bankroll. I think that makes you a very dangerous player and that is the road I am taking, but I have talked about that before. See you pros in five years when I am 50 and out! So for now, the advice I have to give is from the viewpoint of a recreational poker player, which is who I am.

This money management tip is for a trip that involves any kind of gaming. I play poker today because years ago I found that I could have fun and play in the casino for much longer playing poker than in the pit. Playing $5.00 a hand black jack $100.00 can go in less than an hour, that same $100.00 can last 5 or 6 hours in a poker game even for a new player. Poker in my opinion is just a better choice.

The first concept that we need to address is that there are two types of money, spending money (Real world money) and bank roll. The two should NEVER be mixed.

We need to develop a pre-trip plan which will help us determine how much money we need to bring to spend on meals, hotel and entertainment other than gaming. Then we need to determine how much we are going to “spend” total on the trip for our gambling entertainment.

I need to mention here that under no circumstances should you ever use and ATM in a casino or on a gaming vacation, EVER. Decide how much you are going to spend gambling on your vacation before you leave the house, take that money with you in cash, there is a safe in the room. The fees that the bank and the casino charge for cash advances should be enough to let you know that you have a problem and should get professional help if you are willing to pay those percentages just to get back in action. I will repeat this because it is important, if you cannot determine a budget and stop gaming of any kind including poker when you have reached that limit you are addicted and should stop gambling altogether before it gets worse.
Enough said about that, now we need to decide on the amount that we are willing to lose in our pursuit of action. Once we have done that I use the envelop method, your bank will provide you with half a dozen of those little white envelopes if you ask them. Divide the amount of gambling money you are going to spend total for the trip into the number of days you will be there and put that amount into as many envelopes.

When you get to the hotel take your first envelope out and put the remaining envelops in the safe in your room, if there is not a safe in your room the hotel will have a safe deposit box at the front desk. If there is neither you are in the wrong hotel. I suggest splitting the money you now have in your pocket in to two units also, spending money in your wallet and gaming money in your money clip. Ladies may just want to keep the gaming money in the envelope and put it in your purse.

Now you are ready to go get em! The money you have is all the money you can gamble with and when it is gone you are done for the day/night. Now we further budget decisions, let’s just say for the sake of example we are on a 4 day trip to Vegas and our bankroll is $2000.00 so we have four envelopes, three in the safe and $500.00 in our money clip. Now it becomes pretty easy to decide whether or not we should join our poker pals who are entering the $500.00 buy in multi table tournament at 10:00 am the day we arrive. Have fun guys, I am going to go to the Luxor and sign up for the $50.00 noon event and play 2/4 limit and see if I can make back my entry fee before it starts.

The management part of this is easy, you only have $500.00! Now let’s say our hero lost the $500.00 for day one by 8:00pm. You are done. You have no more money for gaming until 6:00am the next morning, if you ever break this rule you need to stop playing poker you have no self control and are at risk of making larger mistakes. This program is easy, and you have other money and lots of other things to do, go to a nice dinner and see if your wife wants to go to a strip bar. Who knows that night may be the most fun night of the trip, just no more gaming.
The neat thing that happens now is that the next day you have a fresh new start and a brand new FAT $500.00 bankroll! Let’s say that on day two we do much better and at 3:00am we are headed back to the room with a net gain of $700.00 + The $500.00 we started with giving us a total of $1200.00 in our money clip / Working bankroll. Nice job player! Now we have some money management decisions to make.

(A) Refill day one and day two’s envelops, leave day three in the safe and try to play on your $200.00 white meat.

(B) Refill day two’s envelop, leave day three in the safe and play on a $700.00 daily working bankroll.

(C) Leave day three in the safe and play on a $1200.00 daily working bankroll.

(D) Take out day three and play on a $1700.00 daily working bankroll. Remember its YOUR MONEY it’s ok to play higher if you want to; you are just being responsible and thinking about your choices. The only thing I would state here is that you need to be prepared to lose it all and when you do; you have to check your ego at the door on day four and step down to limits more fitting your $500.00 bankroll. Do NOT Chase any money you have lost in the larger game with your smaller daily working bankroll. Before you step up I would consider that it is hard to step back down and I would also warn you that just because you now have a larger bankroll does not mean that you are a better player. You may be better off staying at the limit that won you the money.

Managing your money in this fashion is fun, you have more control and in the long run you are giving yourself time to make the best decisions for you and your situation.
I will tell you right now that I chose option (C – Save day three and play on the $1200.00). This is the best choice for me because I can play a little higher and I still have choices while remaining inside my money management guidelines. Let’s say that I stumble and fall and get busted at 6:00pm on day three, I can still decide that if I want to continue to have fun and play (I am in Vegas after all) that I can go back to the room and reload with my day three envelop and restart my session at the $500.00 working bankroll level.

Let’s say that our hero (You) makes the play I would have made and heads out the door with $1200.00 in his pocket and $500.00 in the safe available if necessary. We play a $250.00 buy in tournament with our now larger working bankroll and what do you know all those years practicing at the pay off. We make third place, we should have won it but a donkey called our all in with 56 and cracked our AA, what can you do. Third place pays us $1850.00 so we are now working with $3050.00 and $500.00 in reserve. Let’s take a brake and have some dinner with our lovely wife and beautiful daughters, they are sure to want to hear every detail of our conquest. Hey, it’s my story I can make up stuff that would never happen.

The point is this it’s time for a brake and another group of money management choices.
(A) Play the 3050.00 and go back to the room and get the day three envelop and play a total working bankroll of 3550.00. We are on a roll and we should buy into the largest cash game we can after all we are leaving tomorrow or are we? I could easily do this for a living, run this up to 50 or 60 grand and ……

(B) Go back to the room and refill day one and day two leaving us a $2050.00 working bankroll and $1500.00 in reserve with $500.00 still earmarked for day four. This is a neat choice because we have the total bankroll we were willing to lose protected in the safe on day three and if we leave in that spot we leave even and that by itself is a nice achievement.

We make the smart choice and head out into the night rested and well feed with two grand to play with and happy girls, life is good. Let’s say we play a little higher, now is a good time. We are not worried about the money and we are feeling pretty good. We enter the 15/30 game up one level from our normal 8/16 limit holdem game and we learn something. The players at the higher level are better and we learn that this is a good thing, they are not out classing us, we have practiced and we are ready. The play at this level is more predictable and because it is a larger game than we are used to we are playing tight but aggressive, watching the players identifying their tendencies, guessing their hands (to ourselves only of course) when we are not in a hand and then using all this information when we have cards worth playing.

3:00am tired but very satisfied we book a nice win in the 15/30 $1600.00 up for a total working bankroll of $3650.00 with $1500.00 in reserve and $500.00 earmarked for day four. We are off to bed and when we get up we need to do some more money management planning.
I am not going to drag this out any more you get the idea. I will just say in summation that my move on day four is to play a $1650.00 working bankroll of the total $5650.00 I have available to me on day four, assuring me that worst case scenario I take home $4000.00 booking a nice $2000.00 win for sure.

When I am in the airport at 3:00 going home I have just over $5000.00 bankroll and because hey I was up and I gambled a little. I also have $1200.00 of the $2000.00 in real world money I didn’t spend on other entertainment because I only busted one day and I was playing so much.

What a trip!

You will notice that this system is designed to focus on keeping me in play NOT as an income device. I love poker and I want to play, the worst thing that you can do is lose all your money on day one and like I said going to the ATM is just a sucker’s play. Be your own best friend at the poker table, make a plan before you leave home and stick to it. I have used this system for over 20 years and I hope it helps you enjoy the game of poker as much as it has helped me.



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