Poker Winner Blog

How much money do you need to keep from going broke if you’re a professional and poker is your paycheck?

A professional poker player should realize that every dollar she wins will not be added to her bankroll. After all, she has to pay rent and buy groceries just like anyone else, and her only source of income is her winnings. Lose, and she pays her bills the only way she can: by dipping into her bankroll. But there’s a limit to how deeply she can dig without putting herself in jeopardy.

Reducing your bankroll converts capital into income — and that distinction is an important one. Change too much capital into income and you’ve eaten your seed corn.

When a professional poker player on a short bankroll hits a protracted losing streak, she has only a few choices:

• Get a job in order to build up her bankroll (in which case she is reversing the process and converts income to capital)
• Become a horse by playing on a backer’s money. (But a horse takes only a percentage of her winnings)

• Quit poker entirely — or at least until she rebuilds her playing stake to a sizeable amount.

None of these options is very desirable for working professional poker players.

Bleeding off capital is not limited to poker players either. Businesses do it all the time. When veteran airline company Pan-Am was on the rocks, it sold its flagship building in New York City. Therefore, Pan-Am’s balance sheet made it seem like the company had a good year. But you can convert capital into income only once, and then it’s gone.

A poker player’s bankroll is his capital. When poker is your business, you don’t need money to build factories, or buy office buildings, trucks, machine tools, or computers. Money — in the form of a playing bankroll — is your capital. Lose some of it and you’ll probably have to drop down and play at smaller limits, put the screws to your personal spending habits, and grind out an adequate bankroll. If you lose too much, you’ll be so undercapitalized that you’ll be ill-equipped to even compete at all.

Moving Up to Bigger Limits

Can you still take occasional shots at bigger games? Sure — and you probably should — as long as the game looks good and you think you can win. If anything, it will help you prepare for the next move up the poker ladder, once your bankroll grows large enough to play there regularly.

Limit poker, after all, is like a job. As long as you’re a winning player, the more hours you put in, the more money you’ll earn. And if you give yourself a pay raise by jumping to a bigger game, you ought to earn more in the long run. Just make sure you don’t take risks you can’t afford — like playing on a short bankroll. Without a sufficient cushion, all it takes is a few big losses to find yourself terminally downsized.

As for using money-management concepts — like setting stop-loss limits and quitting once you’ve won some predetermined amount of money — and thinking they will shield you against the possibilities of going broke, forget about it.

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