Professional Bankroll

radical_dgradical_dg Red Chipper Posts: 29 ✭✭
edited March 2017 in General Concepts
Hey Red Chip,

So I've officially been playing professionally now for the last 4 months. I'm playing 1/3 NL and am a little curious as to how you set aside life roll expenses vs poker bankroll. I have approximately a $10k bankroll (made strictly from poker) to be used, strictly for poker. My question is more along the lines of what percent to you put back into your roll after a cash, how much goes into savings/investments, etc...how often do you pull money out? Is it session by session or weekly, monthly, etc? Any help would be greatly appreciated. Obviously there's no right or wrong answer, however I would like some direction.

Thanks,

Devin
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Comments

  • jeffncjeffnc Red Chipper Posts: 4,842 ✭✭✭✭✭
    edited March 2017
    Yeah, a lot of this is risk tolerance, etc. I don't think you're going to find an exact number you're looking for.

    Speaking strictly mathematically, if you withdraw money from your bankroll every time it goes over $10,000 (i.e. try to maintain a $10,000 bankroll and just take out the profit), then the probability of losing your roll (risk of ruin) is 100%. (I don't know the math, I'll let a math guru confirm that.)

    So before we get into your more practical questions, if you want a mathematically legitimate chance of maintaining your roll over the long haul, you have 2 options:
    - make sure you get your roll well over $10,000
    - consider your roll to be only $8,000 or so with a $2,000 cushion that you might dig into

    The bottom line is, you have to put some of your profits back into your roll and increase it, before you start taking money out from cashes. Then we can start talking about how much to cash out when you win.
  • emkayemkay Red Chipper Posts: 32
    30ish buy ins when you have no other income is not a good situation for you...
  • LukaLuka Red Chipper Posts: 216 ✭✭✭
    jeffnc wrote: »
    Yeah, a lot of this is risk tolerance, etc. I don't think you're going to find an exact number you're looking for.

    Speaking strictly mathematically, if you withdraw money from your bankroll every time it goes over $10,000 (i.e. try to maintain a $10,000 bankroll and just take out the profit), then the probability of losing your roll (risk of ruin) is 100%. (I don't know the math, I'll let a math guru confirm that.)

    So before we get into your more practical questions, if you want a mathematically legitimate chance of maintaining your roll over the long haul, you have 2 options:
    - make sure you get your roll well over $10,000
    - consider your roll to be only $8,000 or so with a $2,000 cushion that you might dig into

    The bottom line is, you have to put some of your profits back into your roll and increase it, before you start taking money out from cashes. Then we can start talking about how much to cash out when you win.

    Why would your risk of ruin be 100% with a $10K roll playing 1/3?
  • emkayemkay Red Chipper Posts: 32
    Luka wrote: »
    jeffnc wrote: »
    Yeah, a lot of this is risk tolerance, etc. I don't think you're going to find an exact number you're looking for.

    Speaking strictly mathematically, if you withdraw money from your bankroll every time it goes over $10,000 (i.e. try to maintain a $10,000 bankroll and just take out the profit), then the probability of losing your roll (risk of ruin) is 100%. (I don't know the math, I'll let a math guru confirm that.)

    So before we get into your more practical questions, if you want a mathematically legitimate chance of maintaining your roll over the long haul, you have 2 options:
    - make sure you get your roll well over $10,000
    - consider your roll to be only $8,000 or so with a $2,000 cushion that you might dig into

    The bottom line is, you have to put some of your profits back into your roll and increase it, before you start taking money out from cashes. Then we can start talking about how much to cash out when you win.

    Why would your risk of ruin be 100% with a $10K roll playing 1/3?

    I dont have the scientific anwser, but I'll take a stab... As a pure pro, you rely on poker income to satisfy your needs, rent, food, transportation... his 10K roll is about 30 buy ins give or take, and the stakes he plays at is rake heavy. What are his life expenses? lets go with 300$ a week if he's a life nit. Whats his hourly? Lets assume he crushes the game for 30$ an hour... Thats 10 hours of poker just for expenses, and at some point variance kicks in and he goes on a downswing, now not only is he losing money playing poker for awhile, his life expenses also eat away at his bankroll... Pure inevitable bad luck is very likely to crush his professionnal poker dreams...
  • persuadeopersuadeo Red Chipper, Table Captain Posts: 4,200 ✭✭✭✭✭
    He didn't say that exactly, Luka, he said if you withdraw whatever funds which exceed your 10k, you will theoretically always go broke at some point. This is intuitive - think of ROR as a bad lottery ticket that will pay off eventually wherein the smaller your roll the greater the chance of your number being called.

    Risk of ruin is a mathematical concept and not a truth about any one player. Nor should players necessarily fear going broke. However, it does suggest the importance of growing your bankroll and/or having cash flow, as well as the real key to the whole shebang - the skill that makes winning happen in the first place.
  • radical_dgradical_dg Red Chipper Posts: 29 ✭✭
    edited March 2017
    Obviously the optimal size would be to get to 17k - 30k. Currently I am at 10k. I plan on putting the bulk of every session back into the roll, I'm just curious as to what rate most pros do it.
  • radical_dgradical_dg Red Chipper Posts: 29 ✭✭
    I never plan on just sticking to 1/3 and the plan is to continue growth and move up in stakes at some point, so feeding the most amount of money back into the roll is my number one priority.
  • jeffncjeffnc Red Chipper Posts: 4,842 ✭✭✭✭✭
    edited March 2017
    Luka wrote: »
    Why would your risk of ruin be 100% with a $10K roll playing 1/3?

    It's not. However, that's not exactly how the problem was stated.

    To have a non-zero risk of ruin, first you have to be a winning player, obviously. But after that, all those calculations assume that you will leave your bankroll intact. In other words, the calculations take into account the fact that you're leaving profit in the bankroll. It assumes there is no upper limit. If you create an upper limit of $10,000 by taking money out every time it gets over that, then if you play long enough you're guaranteed of eventually going broke.

    In practice of course you might not play "long enough", so it doesn't mean in real life you're actually guaranteed of going broke.

  • jeffncjeffnc Red Chipper Posts: 4,842 ✭✭✭✭✭
    radical_dg wrote: »
    I plan on putting the bulk of every session back into the roll, I'm just curious as to what rate most pros do it.

    Can you say what your realistic living expenses are every month, and a conservative estimate as to how many hours you play and your win rate /hr?

  • radical_dgradical_dg Red Chipper Posts: 29 ✭✭
    So this is where it gets muddy because everybody and their brother is gonna freak out over what my hourly is....after 225 hours of play, I'm making 22.3bbs/hour, this using the application Run Good since I started tracking my results sometime after the first of the year. I know that number is definitely an outlier, I've been playing poker for more than 10 years and 4 years were spent playing online daily during college, I don't feel I've been "running good". Very few times have I "coolered" anyone. This game is dominated my regulars and because I play with them daily, their tendencies are noted and exploited.

    As far as what my living expenses are...for the next two months I'm living with my parents and up until the point my fiancé and I move to another city, where she'll be taking a full time position as a pharmacist, my living expenses will be near as minimal as can be. I can't quite give an exact definition. I spend maybe $25 in fuel per week and maybe $70 in food and another $25 in entertainment, a safe conservative estimate of expenses per week would be $150.
  • jeffncjeffnc Red Chipper Posts: 4,842 ✭✭✭✭✭
    edited March 2017
    radical_dg wrote: »
    So this is where it gets muddy because everybody and their brother is gonna freak out over what my hourly is....

    My grammar was a little ambiguous, but I didn't mean to ask what your currently hourly is, I was trying to ask if you can come up with a conservative estimate as to what your hourly will be over the next year. Also you didn't say how many hours you'll be playing per week.
    radical_dg wrote: »
    ..for the next two months I'm living with my parents and up until the point my fiancé and I move to another city, where she'll be taking a full time position as a pharmacist, my living expenses will be near as minimal as can be.

    That's a good situation to be in, and one key will be her supporting you, even if she doesn't fully understand how the poker world works.

    But assuming you can play 35 hrs/wk, and you can make $15/hr, and you can put $300 each week back into your bankroll on average, you will probably be OK.
  • LukaLuka Red Chipper Posts: 216 ✭✭✭
    persuadeo wrote: »
    He didn't say that exactly, Luka, he said if you withdraw whatever funds which exceed your 10k, you will theoretically always go broke at some point. This is intuitive - think of ROR as a bad lottery ticket that will pay off eventually wherein the smaller your roll the greater the chance of your number being called.

    Risk of ruin is a mathematical concept and not a truth about any one player. Nor should players necessarily fear going broke. However, it does suggest the importance of growing your bankroll and/or having cash flow, as well as the real key to the whole shebang - the skill that makes winning happen in the first place.

    Okay, that helps a bit. I wasn't doubting or disagreeing with the statement but just trying to understand. It seems difficult to lose $10K playing 1/3 but I'm also not a pro, and don't have the volume under my belt to necessarily fully understand what a real downswing looks like. So just curious from a concrete standpoint about what is behind this referenced mathematical concept to help with my future planning.
  • emkayemkay Red Chipper Posts: 32
    Well living with your parents certainly helps...
    radical_dg wrote: »
    So this is where it gets muddy because everybody and their brother is gonna freak out over what my hourly is....after 225 hours of play, I'm making 22.3bbs/hour, this using the application Run Good since I started tracking my results sometime after the first of the year. I know that number is definitely an outlier, I've been playing poker for more than 10 years and 4 years were spent playing online daily during college, I don't feel I've been "running good". Very few times have I "coolered" anyone. This game is dominated my regulars and because I play with them daily, their tendencies are noted and exploited.

    As far as what my living expenses are...for the next two months I'm living with my parents and up until the point my fiancé and I move to another city, where she'll be taking a full time position as a pharmacist, my living expenses will be near as minimal as can be. I can't quite give an exact definition. I spend maybe $25 in fuel per week and maybe $70 in food and another $25 in entertainment, a safe conservative estimate of expenses per week would be $150.

    So basically, you have made around 15 000$ in the last 2 months and a half, and your bankroll is now 10 000$? What was your bankroll when you started tracking your results?
  • radical_dgradical_dg Red Chipper Posts: 29 ✭✭
    Correct, that's what I have recorded. My initial bankroll was 4K. The question then becomes, "why is your bankroll only 10k now?" Well two things happened, the first being a ring to my girlfriend of 9 years...this was something that should of been done long ago however once I had made a bit on poker, I gave her what she deserved (may not of been the best business decision, but it was definitely the correct life decision). Next was a failed alternative income source which ended up kicking me in the nuts...so that's how we're now at 10k.
  • jeffncjeffnc Red Chipper Posts: 4,842 ✭✭✭✭✭
    Luka wrote: »
    It seems difficult to lose $10K playing 1/3

    It's more of a math concept than a real world concept, but the simplest way to think about it is to think of playing "forever" - an infinite number of hands. Infinity is a long time. Like if you flip a coin that many times, eventually you're going to hit a streak of over a million heads straight. So compared to that, losing 33 buy ins seems like nothing :)

  • LukaLuka Red Chipper Posts: 216 ✭✭✭
    Ok, that helps conceptualize it. Thanks.
  • AustinAustin Red Chipper Posts: 5,483 ✭✭✭✭✭
    Having 1 year of living expenses saved and only take out money from your bankroll once a year would be a great plan. This will allow you to move up levels and keep improving as you go without handicapping your bankroll with bills.

    If you need 25k a year to live on and you make 50k for the year playing 1\3. Then you have your current BR 10k+50k for 60k. Take out your living expenses for 2018 leaving you with a BR of 35k for 2018.

    Then just move up and down as your bankroll fluctuates. Every 40 buyins you have for the next level does not hurt to take a shot especially if its a soft game.

    Treat it as a long term journey. You wouldnt cash out your stocks every day not your retirement.

    Best of luck
  • Paul_KPaul_K DFWRed Chipper Posts: 330 ✭✭✭
    radical_dg wrote: »
    Next was a failed alternative income source which ended up kicking me in the nuts...so that's how we're now at 10k.

    Yep... I took the Falcons + the under too.

  • EquityEquity Red Chipper Posts: 13
    Radical, save and grow your bank roll as much as your discipline will allow. Real life doesn't always match theoretical plans so do your best.
  • kenaceskenaces Red Chipper Posts: 1,426 ✭✭✭✭
    10K might be find for part time player who has other income but for a full-time player it is pretty small. When you are living off your BR the risk of ruin is WAY bigger. MAP has some great thoughts on this depleting vs non-depleting bankroll idea.

    @OP you might be find for now with super low monthly nut but Life happens(ie you take 1/3 your BR to buy a ring). If I were you I would be looking to grow my BR/saving ASAP in anyway possible(job, grinding, keep spending down......)
  • jeffncjeffnc Red Chipper Posts: 4,842 ✭✭✭✭✭
    We've had other discussions before about what a "real" poker bankroll is, and if risk of ruin calculations truly apply, because at the end of the day, there's actually another source of money. So the "bankroll" turns out to be more of a "budget". So in your case, I think this boils down to the fact that your wife has a full time job, and in case of an emergency situation, technically you wouldn't have any absolutely required expenses. If your wife can pay the rent in a month where you don't contribute, or give you a ride to the casino if you can't buy gas, and feed you her table scraps so you don't starve to death, then you can scrape by, technically. So again, I think a lot of this would boil down to how much she's willing to support this idea if things run bad.
  • ChipXtractorChipXtractor Red Chipper, Table Captain Posts: 1,191 ✭✭✭✭
    jeffnc wrote: »
    We've had other discussions before about what a "real" poker bankroll is, and if risk of ruin calculations truly apply, because at the end of the day, there's actually another source of money. So the "bankroll" turns out to be more of a "budget". So in your case, I think this boils down to the fact that your wife has a full time job, and in case of an emergency situation, technically you wouldn't have any absolutely required expenses. If your wife can pay the rent in a month where you don't contribute, or give you a ride to the casino if you can't buy gas, and feed you her table scraps so you don't starve to death, then you can scrape by, technically. So again, I think a lot of this would boil down to how much she's willing to support this idea if things run bad.

    My situation exactly.
    It all boils down to good spousal choices.
    Twitter = @ChipXtractor
  • kenaceskenaces Red Chipper Posts: 1,426 ✭✭✭✭
    jeffnc wrote: »
    We've had other discussions before about what a "real" poker bankroll is, and if risk of ruin calculations truly apply, because at the end of the day, there's actually another source of money. So the "bankroll" turns out to be more of a "budget". So in your case, I think this boils down to the fact that your wife has a full time job, and in case of an emergency situation, technically you wouldn't have any absolutely required expenses. If your wife can pay the rent in a month where you don't contribute, or give you a ride to the casino if you can't buy gas, and feed you her table scraps so you don't starve to death, then you can scrape by, technically. So again, I think a lot of this would boil down to how much she's willing to support this idea if things run bad.

    The title of thread said "professional bankroll", and I have no other income except poker so I see this discussion through a different lens. So at the "end of the day" there is no other source of money for me without starting over in new career. Of course we don't know OP's situation on this issue?

    I just cringe at the idea of relying on my wife(or anyone) for money if I run bad.
  • DirtyFilthyRatDirtyFilthyRat Red Chipper Posts: 23 ✭✭
    $10,000 is NOT near enough for a 1/3 NL bankroll.
  • ChipXtractorChipXtractor Red Chipper, Table Captain Posts: 1,191 ✭✭✭✭
    edited March 2017
    kenaces wrote: »
    jeffnc wrote: »
    We've had other discussions before about what a "real" poker bankroll is, and if risk of ruin calculations truly apply, because at the end of the day, there's actually another source of money. So the "bankroll" turns out to be more of a "budget". So in your case, I think this boils down to the fact that your wife has a full time job, and in case of an emergency situation, technically you wouldn't have any absolutely required expenses. If your wife can pay the rent in a month where you don't contribute, or give you a ride to the casino if you can't buy gas, and feed you her table scraps so you don't starve to death, then you can scrape by, technically. So again, I think a lot of this would boil down to how much she's willing to support this idea if things run bad.

    The title of thread said "professional bankroll", and I have no other income except poker so I see this discussion through a different lens. So at the "end of the day" there is no other source of money for me without starting over in new career. Of course we don't know OP's situation on this issue?

    I just cringe at the idea of relying on my wife(or anyone) for money if I run bad.

    Well, let me ask you this... If you were just starting out in a law or medical practice and had to rely on your spouse to support the household would you feel the same way? What if you were starting a new business?

    I only ask because people sometimes have notions about 'Pro Poker Players' that they dont always hold true for other professions.

    p.s. I was only half joking in my original response. But, I do think it brings up something worth talking about. Relying on others (family, friends, investors, etc.) as you build your 'business' is very common in many professions. Why should it be any different in poker?
    Twitter = @ChipXtractor
  • porterporter Red Chipper Posts: 313 ✭✭✭
    It all boils down to good spousal choices.
    One sentence poker revelations.
  • emkayemkay Red Chipper Posts: 32
    kenaces wrote: »
    jeffnc wrote: »
    We've had other discussions before about what a "real" poker bankroll is, and if risk of ruin calculations truly apply, because at the end of the day, there's actually another source of money. So the "bankroll" turns out to be more of a "budget". So in your case, I think this boils down to the fact that your wife has a full time job, and in case of an emergency situation, technically you wouldn't have any absolutely required expenses. If your wife can pay the rent in a month where you don't contribute, or give you a ride to the casino if you can't buy gas, and feed you her table scraps so you don't starve to death, then you can scrape by, technically. So again, I think a lot of this would boil down to how much she's willing to support this idea if things run bad.

    The title of thread said "professional bankroll", and I have no other income except poker so I see this discussion through a different lens. So at the "end of the day" there is no other source of money for me without starting over in new career. Of course we don't know OP's situation on this issue?

    I just cringe at the idea of relying on my wife(or anyone) for money if I run bad.

    Well, let me ask you this... If you were just starting out in a law or medical practice and had to rely on your spouse to support the household would you feel the same way? What if you were starting a new business?

    I only ask because people sometimes have notions about 'Pro Poker Players' that they dont always hold true for other professions.

    p.s. I was only half joking in my original response. But, I do think it brings up something worth talking about. Relying on others (family, friends, investors, etc.) as you build your 'business' is very common in many professions. Why should it be any different in poker?

    When starting a business, I'd like to have at least 6 months of living expenses set aside for living expenses only, apart from from the money available for business expenses like marketing, employees... And of course there's no problem with friends, family or the wife supporting you if things go bad. But I'd like to make sure that I have a good plan in place before taking on such a project, and minimize as much as I can the odds that I do need support at some point. I just think a 10K bankroll isnt a well thought out plan.

    As for your last question, it shouldnt be any different for poker IMO, but I'd make sure to explain to my wife what poker is and that I might not always win 22 BBs an hour playing poker and that starting with 10K the odds are pretty good that she will need to bail me out at some point. Family and friends will talk about how good at poker you are when you're winning, but once you hit a downswing, the narrative often deviates towards poker is gambling and you're throwing your life away...

  • kenaceskenaces Red Chipper Posts: 1,426 ✭✭✭✭
    edited March 2017

    Well, let me ask you this... If you were just starting out in a law or medical practice and had to rely on your spouse to support the household would you feel the same way? What if you were starting a new business?

    I only ask because people sometimes have notions about 'Pro Poker Players' that they dont always hold true for other professions.

    p.s. I was only half joking in my original response. But, I do think it brings up something worth talking about. Relying on others (family, friends, investors, etc.) as you build your 'business' is very common in many professions. Why should it be any different in poker?

    Not even close to apple to apples comparison between a professional career and playing poker for a living. A recent grad from med or law school has WAY higher chance of high lifetime earnings. There are very few if any poker players who are gong to make 6 figures every year for the duration of their career! So the risk for a new "pro poker player" is MUCH higher as most go busto or leave the game for other things, and the reward is MUCH lower.

    At least in comparing poker to a new business has some relation on the risk side of things. But I in the long run the reward of successful business is much higher as a good business can become passive income or sold sometime in the future. Anyone want to buy my poker business?

    As far as relying on others money - I guess that is personal decision.

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