Note: Not at the old Poker1 site. A version of this entry was first published (2006) in Poker Player newspaper.
I get more questions about bankrolls than seems sensible to me. There are no magic formulas for managing your poker money. The more risk you take, the more likely you are to build your bankroll in a hurry and the more likely you are, also, to go broke during the attempt.
Any reasonable plan of profit assumes that you’re good enough to win. If that isn’t true, then you should forget about building or even maintaining a career bankroll until your skills increase. Once you’re good enough to earn an advantage at poker, it’s up to you to decide how much risk is right.
You can plod along, building gradually. Or you can flirt with danger and go for a quick score. Once you’ve decided, you need to understand some important concepts that govern your poker finances. I discussed them years ago in this lecture, delivered to serious students…
Building and rebuilding
Maybe you’ve been playing casually for many years and now you think you’re good enough to play poker professionally. Fine. Or maybe you’ve been playing professionally and you’re in a drought. The cards won’t come. Your bankroll shrinks. Today I’m going to share some strategies for building or rebuilding a bankroll.
The first thing you’ve got to determine is whether you need a bankroll. If you’ve got lots of liquid assets and can comfortably afford to play poker at any level you’re likely to choose, then you probably don’t need a bankroll at all. You can just get money when you need it and there’s no reason to decide which funds of yours belong to poker and which funds belong to something else.
But most players who take poker seriously should maintain a bankroll. If you own an automobile repair shop, you need a garage, tools, a desk to write estimates, and a lot more.
But to a poker player, a bankroll represents the entire business. There is no separate equipment needed. It’s pretty much just you and your bankroll. That’s why you need to treat your bankroll with care.
Maybe you had a very large bankroll and lost most of it. If your bankroll is now too small to worry about, you might want to continue to take chances in an attempt to quickly restore your bankroll. That’s because of a powerful concept that seems strange to most players. That concept says that a large bankroll is more worthy of protection than a small one.
Most players instinctively see it just the opposite. They figure that when you have a large bankroll, you can afford to take chances. To a degree, that’s true, but they tend to become so adventuresome that they often fall too far and they’re unwilling to play smaller again.
Down in class
Remember, it’s psychologically hard for some players to bump down in class and play smaller limits when survival dictates that they should. That’s the reason so many top players go broke from time to time.
The truth is, you’re better off playing the limits your bankroll dictates. But that doesn’t mean that if your bankroll is five times as large that you should play games that are five times as big. Here’s the secret. If you go broke, that’s not the end of it. You’ll have a collision with the real world.
When you have just $500 or $1,000 to start with or just $500 or $1,000 left in your bankroll, it may not be worthwhile nursing that bankroll along. Because you can replenish it from interacting with the real world, assuming you have other sources of getting money, it’s not a major disaster.
It might take you longer to build or rebuild your bankroll if you nurse the money you have left. Sometimes it’s better to take a shot, knowing you might go broke, and if you do, find another source for a new seed and take another shot.
But when your bankroll is already large, it will be much, much harder to get it back to that point again if you lose. That’s why it’s OK to take chances with a smaller bankroll, but a larger one should be cherished. You do this by making sure you have more minimum buy-ins in reserve with a large bankroll than with a small one. That’s why I said that if you have five times as much money, you shouldn’t play five times as big.
But here’s another clue. When you’re in the process of building or rebuilding a bankroll, and you’re trying to protect it – as opposed to taking a shot – you need to take fewer risks. This means that after you’ve built a meaningful bankroll and are playing for stakes near the top of what your finances will allow, you need to play fewer borderline hands.
Simply stated, you should play tighter and sometimes wait for hands where you have a greater edge. You’ll sacrifice some chance to maximize profit in order to have a better chance of survival. With an established bankroll, only deploy your complete arsenal of small-profit, risky tricks and tactics when you’re playing for comfortable stakes.
What we’ve learned
So, today we’ve learned that not everyone needs a bankroll, but most serious or professional players do. And we’ve learned that one of the biggest mistakes serious poker players can make is to take big risks with a large bankroll and nurse a smaller one.
You should do just the opposite – take some chances with a smaller bankroll, because it sometimes isn’t worth your time protecting. Remember, it can be replenished from the real world. And be very careful with a larger bankroll, making sure you have many more minimum buy-ins available for the limit you play than you would with a smaller bankroll.
Finally, we’ve learned that if you do have a smaller bankroll that you need to protect, because you don’t want to risk losing it or you can’t find ways to replenish it from real world endeavors, then you should play more conservatively.
If that’s the case, you should not take advantage of every edge; instead, you should reduce your profit expectation slightly by playing fewer borderline profitable hands in order to survive. This also applies if you have a large bankroll and are playing bigger than you normally would.
This is “The Mad Genius of Poker” Mike Caro and that’s my secret today. — MC