Bankroll Management

GetfreeGetfree Red Chipper Posts: 10
edited January 2017 in General Concepts
Hi guys,
I'm new to this site, just wanted to hear what you all thought about proper bankroll size for a 1-3 and 2-5 game. The 1-3 is max $500 buy-in, and 2-5 max $1000. Both games in my area are max bet $500.
Personally I am somewhere in the middle as far as gameplay, mostly striving for tight solid poker, but loosen up when the circumstances seem right. I played the 1-3 for a while on a 10k bankroll but thought it was a little tight when my variance was +/-3k/
I feel like I made a lot of mistakes and definitely have a lot of room for improvement, so would like to lower the variance while improving and plugging holes in my game. In general I think the 2-5 is a better game so I would love to step up, but really not sure where to set my bankroll goals to prepare for that.
Also, what would you consider a solid hourly to sit in either of these games?
I appreciate any thoughts or hearing your own personal experience.
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Comments

  • ZacShawZacShaw Red Chipper Posts: 165 ✭✭✭
    Welcome!

    There is a really good discussion on the topic of bankroll management over here.

    As I mention in that thread, I always viewed bankroll as the envelope of cash I set aside to play poker with. Many others have enough money to not think about bankroll at all. Still others are talking about all the money they have when they talk about the size of their bankrolls.

    My personal goal is a $6k bankroll to play $1/$2, which is 20 max buyins. Currently haven't had any big swings yet but that's just a matter of time. Since I can't exactly move down from $1/$2 I am looking at the $6k goal as the line under which I'm still "taking shots".

    Haven't given much thought to what I'd need to move up to $2/$5 but I imagine it would be $15k minimum. I might take shots sooner, though.

    That's just me personally, I'm sure that other folks might have other recommendations.

    On the question of hourly, I have heard ~10BB/hr or $20/hr at $1/$2, $25-$50/hr at $2/$5 are good hourly rates.

    Good luck!
  • LeonardLeonard Red Chipper Posts: 249 ✭✭
    Here is my take on bankroll management.

    Bankroll Management should be viewed as what the value of money that means to you. It should also be in context of your overall personal financial situation.

    Say if you have a million dollar networth, you have no debt, paid for (house, car, etc) than bankroll management doesn't really mean anything because the value of $1 in proportion to your net worth is nothing.

    But say you have a family, maybe a child or two, a mortgage or rent, student loan debt etc, living paycheck to paycheck, that value of $1 is HUGE in comparison to the first example.

    I think bankroll management should work like this. Set aside whatever amount of money that you can completely dispose of and if you gave it away it to a stranger you wouldn't care what so ever. So whatever amount of money you can afford to lose should be your starting bankroll $ amount.

    Now say you can only scrape this $ amount to $1000 or so with no chance of adding to it. You need to play super tight to avoid variance at first where your only basically playing the nuts. As your bankroll grows, then you can take more chances and take marginal +EV plays.

    But if you can get $10,000 to play 1/2, Lag it up and have a ball, be table captain.

    So the value of $ in relation to your personal financial situation should dictate what stakes you play and the style you play.
  • Christian SotoChristian Soto RCP Coach Posts: 2,195 ✭✭✭✭
    Do you have a job?
  • GetfreeGetfree Red Chipper Posts: 10
    edited September 2016
    I'm glad you read my response christian, because I went to make a small edit and somehow deleted that book I just wrote XD

    Thanks so much for your insights guys, I'm going to try to remember what I just wrote
  • Christian SotoChristian Soto RCP Coach Posts: 2,195 ✭✭✭✭
    edited September 2016
    I think it's important to note that if you have outside source of income and poker is not your source of livelihood, then you do not need a bankroll.
    Because if you were to bust this "bankroll" - you still play from the money you earn in other walks of life.
  • GetfreeGetfree Red Chipper Posts: 10
    Isn't that the point of a bankroll though Christian, to absorb the variance? If I bust a reasonably sized bankroll, then it seems I would just have to accept I am a losing player and find another way to make money.
  • GetfreeGetfree Red Chipper Posts: 10
    edited September 2016
  • Christian SotoChristian Soto RCP Coach Posts: 2,195 ✭✭✭✭
    You don't need a bankroll set aside to figure out if you are a losing player. All you need to do is keep track of the data.
  • jeffncjeffnc Red Chipper Posts: 4,716 ✭✭✭✭✭
    edited September 2016
    Getfree wrote: »
    Isn't that the point of a bankroll though Christian, to absorb the variance? If I bust a reasonably sized bankroll, then it seems I would just have to accept I am a losing player and find another way to make money.

    You can do that in a virtual sense, without real money. Just track your data - keep good records - and you'll have a good idea if you're a winning player or not.

    To answer your question directly, no that's not really the point of having a bankroll. In fact, bankroll calculations all assume that you're a winning player to begin with. You would already have to know you're a winning player, and then decide what bankroll you need. This is mostly for professional players, or players who really can't add any more money to their poker accounts. That way you know how much you can take out of your account and still avoid risk of ruin. If you're a losing player, then it's a mathematical certainty that you'll lose your bankroll if you keep playing. As far as creating a bankroll simply to determine if you're winning, there are obvious better ways to do that (losing your bankroll doesn't really prove you're a losing player anyway.)

    For you, just take out enough cash for one trip to the casino, or maybe for a week of running bad. If you run out, go to the bank again for next week. If you win, you can keep the cash safely in your house somewhere as it grows, and make a deposit if it gets big or go buy something :) Keep track of your results for a year and see how you do. Keep in mind that winning players can break even or even lose a little if they have a bad year.
  • GetfreeGetfree Red Chipper Posts: 10
    I see.. Thanks Christian and Jeff for your responses and explanations. I guess I kinda saw this as a way to never bust and keep money organized, separate from any other living expenses. Also I suppose allows for some general ROI analysis., but thinking about it a little more, judging hourly may be the best way to see results. The problem with this is it doesn't account for study time or effort put in off the table.

    I'm kinda the type where I can never half do something, and if I make a decision to invest a fair amount of money in something I want to be confident about it in all aspects. I think if I ripped through a 10k plus bankroll, I would probably say that I am not equipped to be playing. So in general I would probably choose to set aside an investment in poker if not for anything but my own personal organization and to reduce stress when handling other finances.

    I feel like I have a lot to work on before hitting the tables hard again and look forward to learning from you guys. The game has changed a lot since I've been gone so its time to hit the books and catch up :)
  • jeffncjeffnc Red Chipper Posts: 4,716 ✭✭✭✭✭
    Yeah, you can either say "if I lose $10,000, I'm done", or you can actually take $10,000 and set it aside for your poker account and say "if I lose my poker account, I'm done". Same thing, maybe different psychologically so do whichever works for you.

    To answer your question about what that number should be, you will hear differences. Personally, based on the (low-ish) variance in Holdem I've seen over the last few years, I would say if I burned through $12,000 that would definitely mean losing for me. Depends on your win rate and how crazy you play or how crazy your games are. The lower your win rate, the more at risk you are of a really bad run ruining you. I think a long term hourly rate of $15-20 is pretty good at 1/3 Holdem. A few can make more, most will make less (negative, obviously).
  • SaintsTigersSaintsTigers Red Chipper Posts: 238 ✭✭
    I think it's important to note that if you have outside source of income and poker is not your source of livelihood, then you do not need a bankroll.
    Because if you were to bust this "bankroll" - you still play from the money you earn in other walks of life.

    Disagree, because if you have money set aside to play on you will play better- there will be no money pressure, you can make big bluffs in the appropriate spots, call down light without worry, etc. Without a roll but a job, you'll be sweating the money and not play as good. Say you get paid $2,000 every 2 weeks and can pay $500 of each check on poker. If you get paid Friday and go play that night, you will be sweating getting stacked very hard. If you lose 2.5 buyins you can't play again for 2 weeks. That sucks.

    On the other hand, if you take that same $$$ and play a short stacked strategy, you can grind up a roll and in a couple months play regular poker without caring about the money.
  • Christian SotoChristian Soto RCP Coach Posts: 2,195 ✭✭✭✭
    edited October 2016
    Should never sweat the money. Job or no job... roll or no roll.

    You think well off businessmen have a roll? I don't think they do.
    I also know they do not sweat the money, and that is one of their biggest strengths.
  • jeffncjeffnc Red Chipper Posts: 4,716 ✭✭✭✭✭
    Disagree, because if you have money set aside to play on you will play better- there will be no money pressure, you can make big bluffs in the appropriate spots, call down light without worry, etc. Without a roll but a job, you'll be sweating the money and not play as good.

    I think it could just as easily be the opposite. With a roll, you're sweating increasing it and watching it and hoping you don't bust. By just taking money from your income source, it's stress free. You always know you can never go bust and just refill when you need to.

    Either way, if you're sweating it, you're playing too big for whatever your source of money is.

  • SaintsTigersSaintsTigers Red Chipper Posts: 238 ✭✭
    I know I personally play better if I have 30 buy ins or so set aside. I can "afford" to bring in outside funds but I rather deploy those dollars for retirement savings, other investments, vacations, etc.
  • SaintsTigersSaintsTigers Red Chipper Posts: 238 ✭✭
    edited October 2016
    Should never sweat the money. Job or no job... roll or no roll.

    You think well off businessmen have a roll? I don't think they do.
    I also know they do not sweat the money, and that is one of their biggest strengths.

    Well off businessmen don't need a separate account labeled bankroll. They can afford to go on a 10 buy in downswing or so and it won't matter.
    Either way, if you're sweating it, you're playing too big for whatever your source of money is.

    It's easy to say that if the money matters to you, then you shouldn't play. And I agree with that to an extent. That's why I haven't moved up sooner from 2/5. I want to be able to bluff for stacks or hero call for stacks and not worry about it...If a new player who makes say, 40K a year, loses 2K/10 buyins playing 1/2, that will suck really bad for him. What's he supposed to do instead, not play live poker?

    He'd be much better served to set aside a pool of $$$ and play on that rather than siphon from his meagerish check.

    **All of that said I still support shot taking in bigger games when the lineup of villains is good.
  • jeffncjeffnc Red Chipper Posts: 4,716 ✭✭✭✭✭
    He'd be much better served to set aside a pool of $$$ and play on that rather than siphon from his meagerish check.

    Not necessarily. You've determined what works for you, others have to determine what works best for their style. Why take out a large chunk of money, putting a large stress on your bank account right now, when you don't necessarily even need it?

  • SaintsTigersSaintsTigers Red Chipper Posts: 238 ✭✭
    "Set aside a pool of money" wasn't the most artfully drafted phrase. I'd actually advise a new player making that salary (which btw comes to 769/week not counting taxes, insurance, retirement contribution...) to play a short stacking strategy, rathole wins for multiple sessions while watching the good players, study, then start buying in for 100bbs. A player clearing probably $500/week or less can't really rely on work income to fund 100bb buy ins and play more than occasionally.
  • KirillShamanKirillShaman Red Chipper Posts: 22 ✭✭
    Should never sweat the money. Job or no job... roll or no roll.

    You think well off businessmen have a roll? I don't think they do.
    I also know they do not sweat the money, and that is one of their biggest strengths.

    I agree Christian , many businessmen bust and then rise just to go bust again. Only resilience and selfconfidence and a vision of success can keep them in the game.

    Poker is similar to start up businesses, day trading etc. many try but few survive. It is a constant evolution of ideas and what worked yesterday may not work today. But unfortunately human mind is very complex and does not accept changes easily and quickly. That is why in my view there will always be weak players and your profit will depend a lot on game selection more than anything.

    As for bankroll, for me a bankroll is similar to an entrance ticket to the club. You can go to the club once but this ticket might not be enough for you to be established. You loose your entrance, reevaluate and decide if you are committed enough to build your bankroll and go at it again.

    That is why bankroll is good. Evaluate your initial investment and cosnider the return and break even point. Many people trading loose over not having proper risk management or bankroll management. Not because of skill.

    Most people in day trading will never come back after losing their bankroll. Not sure about poker community. Still very new to the scene.

    I know I am not winning player now but I will be. Thank you RCP and community here! But than again I am not very risk averse at the tables.

  • GetfreeGetfree Red Chipper Posts: 10
    edited October 2016
    Should never sweat the money. Job or no job... roll or no roll.

    You think well off businessmen have a roll? I don't think they do.
    I also know they do not sweat the money, and that is one of their biggest strengths.

    I think smart business people separate their accounts for their different investments and endeavors. If they see poker as a possible stream of income rather than just entertainment, I believe those people would separate money from any other personal or business account in order to play.

    I think trading is very similar to poker in a lot of ways. You have to pay close attention to the variance and long term expected outcome of any given stock. A 10% increase or decrease may be huge for some stocks (as players) but not for others. So I think it is best to judge based on your style of play, understanding how much your swings can be and separate the money from other accounts as not to put stress on other parts of your life when the stock drops. If I wanted a secure bankroll I would say that average variance should not be more than 15% of the total roll. From what I have heard from a lot of players, a 10 buy-in swing is not uncommon in most cash games?

    So if I went by my own advice, I guess a bankroll needed for the 2/5 max $1000 buy in would be 40k. Taking my swings of +/- 6 buy-ins average---- $6000=15% total bankroll. Does this sound about right to you guys? Does anyone else think this is reasonable, too much or too little?


  • jeffncjeffnc Red Chipper Posts: 4,716 ✭✭✭✭✭
    Getfree wrote: »
    I think smart business people separate their accounts for their different investments and endeavors. If they see poker as a possible stream of income rather than just entertainment, I believe those people would separate money from any other personal or business account in order to play.

    Believe me, good businessmen and investors don't tie up any more of their own money than they have to.

    They will take a free loan if they can get it (investors), otherwise they will take a low interest rate loan (again investors usually). The poker analogy would be backers.

    Also, if they could start a business with less money up front, and only adding more money from another account if really necessary, they would. If they wanted a business that required a large initial investment, they'd do it but only if there was no other alternative. The poker analogy would be only taking enough money for each night's play, and leaving the rest in a better investment.
    Getfree wrote: »
    So if I went by my own advice, I guess a bankroll needed for the 2/5 max $1000 buy in would be 40k. Taking my swings of +/- 6 buy-ins average---- $6000=15% total bankroll. Does this sound about right to you guys? Does anyone else think this is reasonable, too much or too little?

    I would feel comfortable playing $2/5 with $40k, if that's what you're asking. But I guess the question is, what will you do if you lose $40k?

  • porterporter Red Chipper Posts: 312 ✭✭✭
    Your bankroll should be a function of your win rate, standard deviation, and tolerance for risk of ruin. Any rules of thumb (for number of BBs or BIs) based on other people's experiences may not be applicable to your game, skill level, etc.

    If you don't have enough hours to reasonably estimate your win rate then you should use a budget rather than a bankroll.
  • jeffncjeffnc Red Chipper Posts: 4,716 ✭✭✭✭✭
    porter wrote: »
    Your bankroll should be a function of your win rate, standard deviation, and tolerance for risk of ruin.

    I think the issue some of us are making is that if you have a job, your "risk of ruin" is basically zero.


    porter wrote: »
    If you don't have enough hours to reasonably estimate your win rate then you should use a budget rather than a bankroll.

    That might be a better way to look at it for amateurs (even if you have established a win rate.)

  • GetfreeGetfree Red Chipper Posts: 10
    edited October 2016
    jeffnc wrote: »

    Believe me, good businessmen and investors don't tie up any more of their own money than they have to.

    The poker analogy would be only taking enough money for each night's play, and leaving the rest in a better investment.

    I think this is the ideal situation. To be able to have a liquid investment or account with decent returns that could be drawn from when needed. Any finance guys know off the top of their head what would be the best way to do this?
    jeffnc wrote: »

    I would feel comfortable playing $2/5 with $40k, if that's what you're asking. But I guess the question is, what will you do if you lose $40k?

    As with any business endeavor, results need to be observed carefully and decisions made from those results. Personally I don't think I would lose the entire bankroll, after all it is sized to absorb a good amount of variance. I think worst case I would spend a lot of time at the tables to realize that I am not a winning player and quit if I showed consistent losing months or years without repair. I think though it would be better to analyze leaks and fix them before quitting to turn any game to positive return.
  • kageykagey Red Chipper, KINGOFTAGS Posts: 2,241 ✭✭✭✭✭
    Getfree wrote: »
    So if I went by my own advice, I guess a bankroll needed for the 2/5 max $1000 buy in would be 40k. Taking my swings of +/- 6 buy-ins average---- $6000=15% total bankroll. Does this sound about right to you guys? Does anyone else think this is reasonable, too much or too little?
    this is silly math...
    if you're buying in for 1k and you're having -6k swings... you're doing something DREADFULLY wrong.

    @SaintsTigers makes a good point about wanting to have extra benjis in his pocket, in his sock drawer and in his bank account to reassure him that he'll be able to play poker again the next time he wants.
    There is a lot of truth to starting players being a little gun shy with their stack because they're trying to" lower their variance." (A dirty little secret is you can't lower variance in poker... it's a fixed entity that you have no control over.)

    But I'm with Jeff & Soto here...
    you don't need a bankroll, you need skilz.
    and you ain't gonna get better at poker playing in the lowest limits (where beginners and really, really, really bad players hang out).

    Also - you need to consider the cost of doing business...
    you'll probably be paying the exact same rake in 2/5 as you would in your 1/3 games... which means that you're losing a larger % of your winnings to rake in 1/3 as you would in 2/5. So why not move up now?

    Bankroll should only be a factor if it affects your confidence.

    And if you're truly worried about your # of buy-ins...then just buy in the 2/5 game for $500. Now you can play with a 1/3 bankroll - but play a better game.
  • SaintsTigersSaintsTigers Red Chipper Posts: 238 ✭✭
    Also, there's value in being able to play several days in a row. I know when I play say, Thursday through Sunday, then Saturday and Sunday I play better. Someone basically scrounging for sources of cash to scrap together a buy in or two will have to deal with overcoming the rustiness of a layoff every time he starts playing again.
  • JCWJCW Red Chipper Posts: 93 ✭✭
    If you lose your Bankroll you are not homeless, then you do not have a Bankroll. That being said, having limits and tracking your poker winnings/losing is smart: roll or no roll.

    It can not only give a psychological comfort but give a real gauge to how you are doing, what levels you should be playing, etc.

    I personally have my money classified in different levels, kept in different accounts. I have what I have called by Bankroll, life roll, savings and long-term savings. And I adjust my games and play based upon how health my different rolls are at. But in reality, it is just one roll. When I have gone on bad runs (with life expensive), I have dipped into my Life roll to keep playing.

    On a few occasions when I have gotten closer to my savings money, I have updated my resume. Lucky things have always turned around before I have gotten into the savings money.
  • KemahPhilKemahPhil Red Chipper Posts: 104 ✭✭
    Getfree wrote: »
    Should never sweat the money. Job or no job... roll or no roll.

    You think well off businessmen have a roll? I don't think they do.
    I also know they do not sweat the money, and that is one of their biggest strengths.

    I think smart business people separate their accounts for their different investments and endeavors. If they see poker as a possible stream of income rather than just entertainment, I believe those people would separate money from any other personal or business account in order to play.

    I think trading is very similar to poker in a lot of ways. You have to pay close attention to the variance and long term expected outcome of any given stock. A 10% increase or decrease may be huge for some stocks (as players) but not for others. So I think it is best to judge based on your style of play, understanding how much your swings can be and separate the money from other accounts as not to put stress on other parts of your life when the stock drops. If I wanted a secure bankroll I would say that average variance should not be more than 15% of the total roll. From what I have heard from a lot of players, a 10 buy-in swing is not uncommon in most cash games?

    So if I went by my own advice, I guess a bankroll needed for the 2/5 max $1000 buy in would be 40k. Taking my swings of +/- 6 buy-ins average---- $6000=15% total bankroll. Does this sound about right to you guys? Does anyone else think this is reasonable, too much or too little?


    If it took a 40K bankroll to play 2/5, there wouldn't be many 2/5 games in this country :-)

    If you are playing in your home area, I think that 3 buyins is all you need to start playing. If you're on the road, you should probably have at least 6.
  • Ruxton_AtheistRuxton_Atheist Red Chipper Posts: 152 ✭✭✭
    Should never sweat the money. Job or no job... roll or no roll.

    You think well off businessmen have a roll? I don't think they do.
    I also know they do not sweat the money, and that is one of their biggest strengths.

    No cautionary tales from AC when your life roll was on the felt?
  • Christian SotoChristian Soto RCP Coach Posts: 2,195 ✭✭✭✭
    edited October 2016
    To be honest I was pretty conservative early on. Although I did have case money at $5/10 early on a few times, but never lost it because I was a damn nit back then.

    I think that's wrong now that I think about it.
    The difference between 0-10K is so insignificant that busting small rolls really doesnt matter. Should just be gunning and firing it.

    I think once you surpass a certain threshold that is a hard to recoup like maybe then it becomes a point where you should start protecting it.

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