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Bankroll Schmankroll, It’s All About Budgeting

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One Dollar Bills Y’all
Bankroll management is always a hot topic for poker players. “Do I have enough bankroll to play $3-$6? Is 300BB really a good limit hold’em bankroll? Do I need a bigger bankroll to play deep stack than I do to play short stack?” And so forth. I think the majority of poker players worried about bankroll are overthinking the issue.

Unless you play poker for a living, or at least for a significant portion of your income, I don’t think you should think in terms of bankroll requirements. To paraphrase the wisdom of Donald Rumsfeld, you go to play with the bankroll you have, not the bankroll you might want or wish to have at a later time. Sure, you can go ahead and calculate the number that would give you a 99% chance to avoid ruin… but is that number really meaningful to you and your lifestyle?

Unless you rely on income from poker to pay your bills, you’re playing as a hobby. If your hobby were photography, would you be asking about your bankroll? “Hrmm, I can sell X photos for Y dollars per month, plus or minus, and spend Z per month on equipment and supplies… what dollar figure D ensures that I’m likely to stay above water with 99% chance if I hit a bad rough patch and don’t sell enough photos for a few months.”

Kinda silly, right? Most people would say, “I enjoy photography, and I’m willing to spend $500 per month on it.” Out of that budget comes investments in new equipment, film, ink, etc. If you happen to sell some photos for some extra cash, then great. If you happened to sell a ton of photos all of a sudden, maybe you would increase your budget to $1,000 per month. If I told you that, at the rate you were selling photos and buying equipment and supplies, you could expect with 95% certainty that $127,350 would be a self-sustaining amount of cash for your photographic lifetime, what would you do. Would you do anything? If you’re like most people, you’d react to that news with a, “Huh, really? Interesting.” And then you’d be back to your $500/month budget.

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25 Responses to “Bankroll Schmankroll, It’s All About Budgeting”

@ Fri Jan 04, 2008 12:25:27 PM

I think that approach to viewing a bankroll makes sense for some hobbyists. There are also a number of people who, even though they are hobbyists, could still probably benefit from approaching their bankroll the way a pro does, albeit on a smaller scale perhaps (they’re not paying their bills with their bankroll).

I approached my gambling “bankroll” the way you did when I used to play primarily blackjack. I had a general entertainment/hobby budget, and blackjack was one of the things I did for recreation. So, I relate to what you outline, and to some extent I look at poker the same way.

But I play poker in part to profit…if not immediately, then long term. It’s more than just entertainment, although I do enjoy it. This is personal I realize, but it applies to a number of other folks I’ve chatted with and read about. So, if part of the enjoyment from poker is long term profit, even though I’m not paying bills with it, it behooves me to have some sort of bankroll plan that minimizes the chances I’ll need to re-deposit. My plan can, and probably should, be more aggressive than a pro, but it’s still a plan.

There are also a significant number of hobbyists who would like to avoid some disapproval. I’m thinking about younger players whose parents are pretty skeptical of poker, or maybe those whose significant others don’t care much for poker. One of the reasonable things they can do to show that they are not irresponsible about poker is to manage their bankrolls as pros do.

Anyway, I didn’t set out to write such a lengthy comment. I think you made some good points, but not for everyone.

vito augello
@ Fri Jan 04, 2008 12:58:25 PM

As with most things in life. I think the proper percentage is 90% of the winning gets done by 10% of the players. I think not only in poker but in all things. Since most of us lie about our winning and how frequently we win, I have a different question. How much money does it take to sucessfully move up in levels? Brian Townshend suggested amassing 20 buyins. Sounds a little light…what do you guys think?

Ed Miller
@ Fri Jan 04, 2008 01:42:41 PM

Actually, I don’t think most people should think in terms of how many buyins or big bets or whatever they need to amass to move up. That thinking makes sense if you play poker for a living, but if you’re a student or hobbyist or amateur or whatever, then that just doesn’t make sense to me.

I think most players should think in terms of, “How much can/will I lose at limit X in a bad week or month, and how much am I willing to lose, budgetwise, in that time?”

No matter how good or bad you are at poker, you’re going to have bad runs, and those bad runs will cost you some money. Think ahead before you play any game and say, “How much will a bad run likely cost me?” and decide if that’s acceptable to you with your current state of finances. If it’s not, play lower or play less frequently. If it is, and that’s the limit you want to play for whatever reason, then go for it.

So I would say you should move up when you think it will benefit you in some important way and when you can afford a month or two of running bad at that level.

@ Fri Jan 04, 2008 01:44:38 PM

I think this is an interesting article. I do think that we all can be a little bit over-anal about our bankrolls, including myself. I think if we are willing to take a break, drop down and levels, and other things like this, we should would benefit on from it and we may even get better faster.

Ed Miller
@ Fri Jan 04, 2008 01:46:35 PM

For instance, if you go to Atlantic City once or twice a month to play, and you have maybe $1,000 or $1,500 that you’re willing to lose, I think it’s still fine for you to play $1-$2 or even $2-$5 NL, even though that $1,500 number would be woefully “underrolled” for either game.

Since you only play once or twice a month, then if you drop a grand in a $2-$5 game this time around.. oh well.. just wait until you have more money to try again. Or make shorter buy ins. Or whatever. Thinking in terms of “I can’t play $2-$5 unless I have 20 buyins or $10,000 dedicated to poker” makes no sense for that person! They’re a hobbyist and they should BUDGET for poker, not BANKROLL for it.

@ Fri Jan 04, 2008 03:44:32 PM

Isn’t a bankroll just the amount of capital you would need to survive variance if you were relying on poker playing for food/child support/etc.? It seems like even for people who would want to play professionally if they can make enough to get above the micro or low limits, bankroll considerations shouldn’t matter because prior to quitting their job, they aren’t really going to be taking much out of their poker account to begin with. Am I wrong (Dude)?

@ Fri Jan 04, 2008 03:55:31 PM

I think we might be beating a dead horse. I believe that the real reason most people have a poker bankroll is because his wife won’t let him have a poker budget.

Let’s face it, wifey is usually just barely (and I mean “just” barely) able to put up with hubby spending so much time on “that silly little game” only as long as said game doesn’t cost anything. As soon as he mentions a budget, he gets the standard lecture on “Don’t you know how many things WE can do with that money that are so much more important to US” etc. etc.

So lots of people want to set up a bankroll to play, not putting anything in, but not cashing anyting out either.

Ed, there you go, the title for your next article – “Bankroll Management for the Married Poker Player”… :)

@ Fri Jan 04, 2008 04:37:35 PM

My wife and I have used a personal allowance system for a long time now. It works great for us because we can each spend it however we like, no questions asked. I started with a $30 ‘stash’ to play a nickel/dime home game two years ago. I couldn’t afford to take hundreds to a casino (the nearest one is about 1.5 hours away anyway) but I played that home game for a year. Then I started hosting my own game of .25/.50 and took a few trips to the casino. All out of that initial stash. My bankroll is now over 1K and I couldn’t really replace it from my allowance – so, in some respects, it’s even more valuable now. I can take shots at 1/2 or even a soft 2/5 game and winnings go back to my BR, loosings come from my BR. I promised my wife that my poker playing would never negatively affect our home finances. It’s a promise I’ve easily kept.

At this point, I have to maintain a winning game or go back to grinding out another year of .05/.10 home game. (blech) :)

No real point here other than to share my personal (successful) experience. I will say that as soon as you carve out a finite amount of cash for playing poker – it gets really easy to tell if you are a winning or loosing player. Suddenly you care about plugging leaks in your game and maximizing the value of your hands. Keeping the tilt-beast safely locked away has immediate demonstrable effects. It made me play better, your mileage may vary.

@ Fri Jan 04, 2008 04:44:20 PM

Hi Ed!
I think in the net everyone is so concerned about the bankroll management because it’s very important in online play, even if it’s a hobby-play.

@ Fri Jan 04, 2008 04:48:34 PM

JJS, I wrote an article for a friend’s (now defunct) poker blog. My title and your title are probably interchangeable.

It can be found here:
Bankroll Management for the Casual Player

@ Fri Jan 04, 2008 05:03:09 PM

@JJS: You may have discovered the holy grail my friend :) The answer to all poker problems might as well be: Does wifey approve? :D


Speaking of me: being a rather poor student trying to reach higher limits, to have fun with learning the game AND ALSO with the aim of getting a small income on a regular basis to aid my other interests as well–>
this article won’t work for me at all. My approach is very ‘anal’ so to speak: 20-30 buyins then moving up (taking shots if I run hot or feel ready to gamble)

I think the article is a little too biased in a way – I definately think of Tommy Angelos very opendefined “Firewood-Metaphor” as THE perfect way to describe BRM.

@ Fri Jan 04, 2008 05:07:19 PM

@ dubiousdrift:

Thats exactly the system my wife and I established- and thats also why I rather have a big BR in order to minimize my RoR (and being a student who does not have the extra cash)

Eds article still works fine for some recreational players that have a well paid job.

@ Sat Jan 05, 2008 02:30:10 PM

My newest opinion is that bankroll requirements are for people who would never need them- and yes, I am referring to professionals. A number requirement (i.e. 300 BB) only would make sense for someone who is not disciplined enough to move up and down accordingly. I have played professionally for almost 4 years now and I have NEVER had anywhere near the bankroll requirements stated. I have been living out of my bankroll for just as long. Although I would never recommend that to anyone else, as things can get a little scary at times, the point is that I have always maintained the discipline to move down as my results and bankroll have dictated and I have never gone broke.

Here is an example:

Say your normal game is 1-2 NL. If you can consistently beat that game, you should also be able to beat the 2-4 game as there are few differences between those levels. If your bankroll is $2,000, it is OK to take $400 and take a shot at that game if you want to pump up your earnings faster. Even better, take the minimum $80 and break it up over 5 tables or sessions.

Of course, the bank roll freaks must have their heads spinning right now. The point is that none of this matters. Why? Simply because I am willing to drop back down to 1-2, .5-1, .25-.50, or (gasp!) even lower. You can divide this up even further if you take Ed’s advice and break up these limits into smaller buy-ins for each limit.

The only bankroll requirement that I believe in is that you should never put yourself at risk of going broke RIGHT NOW. If the way I am playing right now expects to get me broke in 2 months, the answer is simple: I WON’T be playing that way 2 months from now.

In sum, anyone who has the discipline to adhere to bankroll requirements probably also has the discipline to never go broke because they can drop down if necessary. If you are the type of person who actually NEEDS these requirements, you are probably going to eventually find yourself broke anyway.

@ Sun Jan 06, 2008 11:10:13 AM

Ed, I’ve been saying this for years and no one listens to me. :) But you make the case very convincingly so hopefully this idea will gain traction, and people around 2+2 will stop answering the “How much bankroll?” questions like they do.

@ Sun Jan 06, 2008 11:54:27 AM

BR management will be discussed forever, some like 200bb/300bb/500bb/800bb/1000bb some even bigger. I think it mostly comes down to discipline

Ed Miller
@ Sun Jan 06, 2008 11:58:34 AM

To calculate a “bankroll requirement” you need to know three variables: your winrate, your variance, and the percent chance of going broke you’re willing to accept. Most players don’t have even a decent feel for any of the three numbers, so any “bankroll requirement” they come up with for themselves is likely to be a completely meaningless number. Garbage in, garbage out, so to speak.

I think that, until you get a better feel for your winrate and variance, you’re better off taking a shorter term approach. Instead of asking, “how much money do I need to keep playing at this limit forever,” ask yourself, “What do I need to make sure I stay in action for this week/month until I either get a new infusion of cash or can drop down and lower my exposure?” That’s a number most players can estimate reasonably well (if they’re honest about it).

Then, if you eventually become a 6-tabling NL1000 pro, you will have a much better feel for your winrate and variance and you can come up with a bankroll number that actually means something for you.

@ Sun Jan 06, 2008 09:29:57 PM

Interestingly, Ed’s post got a cold reception on the 2+2 Beginners forum — in at least one case by a poster whom I respect. I think people are very sold on the “proverbial 300 big bets” or 20 x 100BBL buy-ins or whatever as a means to financial discipline.

Certainly a poker player needs to be disciplined, but I still think Ed’s right to object to calling this bankroll. Not only do most people asking about bankroll not know their own winrate; they typically don’t even know whether they’re long-term winning players in the first place!

I think training budget is a helpful concept. If you tear up 2c-5c NL and feel like $200 is a good point to move up to 5c-10c, even if you’re not sure you’re good enough to beat it, then great. But don’t call it bankroll; it really has little to do with that concept, and the correlation to the “risk of ruin” number is an accidental one.

@ Tue Jan 08, 2008 04:35:12 AM

The whole issue is rather trite when you think about it. It is simply theory and nothing more. Bob Ciaffone recommends that if a limit player wants to take a shot at that bigger game, he should do so, but avoid playing back at someone when you don’t flop anything.

In no limit, some of the advice that I take myself is to:

A) Avoid big bluffs

B) Avoid big calls, such as with bottom set with 4 flush cards and/or 4 open straight cards on the board.

C) Buy in small. I mean seriously- who ever set the standard at 100 BB’s anyway? It’s an arbitrary number that does more players harm than good.

D) Avoid large push confrontations with overcards and straight/ and or flush combinations, as well as flush draws with small pairs. Or you can even fold them if is someone is setting too high of a price.

E) Pass on likely/possible coin-flips. For example, in a 1-2 game, if someone limps and you raise AK and the limper goes all in for $100, you can pass in this spot, even though in my experience this person tends to have exactly QQ or JJ, FYI.

F) Fold weak draws like low flushes.

G) Play super tight.

Although there are more, this should be more than enough food for thought. Theoretical bankroll requirements usually don’t take these things into consideration. They are pretty much just assuming “business as usual” in your normal game.

In sum, simply make an attempt to avoid all slightly +EV situations, move down if you have to, and then you can stretch that tiny bankroll down to infinity :) .

@ Tue Jan 08, 2008 09:33:24 PM

I have always played with a working bankroll taking expenses out when solely playing BJ or poker not relying on anything else. I have tapped out many times through the years but my level of play ultimately has been based on the worse case scenario plus about 6 months living expenses. This varied immensely from other members of the team. So it became a phantom bankroll. However when I have other sources of income without backing and limited time, I play with what I can afford to loose finding myself playing better and often making more per month than when I grinded for 60 hours a week. I know pros giving the game up for a living and playing with what they could afford to lose finding themselves tapping out every month for a few years. It is difficult to know how much one needs. In holdem we are dealing with a non recursive regression to the mean. Just because we go through a series of losses does not mean we are due to get it back. The same thing can happen over and over again. There was a time that the play was so poor that one could live off a limited bankroll. Now that there are so many people having a basic understanding of the game it is difficult to know how much one needs. I believe the play of pros I know who have experienced a loss playing the past few years is because the level they play and the lack of trials to result in what they are suppose to end up with. Possibly they will be better off in the end and I am still limiting my long tern earnings by being too worried about my bankroll.

@ Tue Jan 08, 2008 11:26:01 PM

Shelby>”Just because we go through a series of losses does not mean we are due to get it back.”

This is absolutely true. It’s like the roulette wheel – just because black came up for the last 4 spins in a row does not mean that the next spin is more likely to be red. The wheel has no memory. Similarly, the cards have no memory either. Just because you get hit with a cold deck, that does not mean that you will run good sometime soon. You could just get hit with another cold deck again.

Shelby>”Possibly they will be better off in the end and I am still limiting my long term earnings by being too worried about my bankroll.”

I don’t think so. I think you are doing the right thing.

Let’s suppose we have a large group of people, all playing “too big” for their bankrolls. What happens?

Some get lucky, they run well and win, and rapidly increase their bankrolls. Others (and this will be “most” of them because of the rake) will go bust. The successful ones are the ones you hear about. They love to publish their success stories for all to hear. The ones who go bust tend to keep quiet, and you don’t hear about them so much.

Variance is the thing that makes it so very difficult to live solely off poker with no other source of income. Professional traders have the same sort of problem; trading for a living also requires that you deal with large variance. In both cases you have a really difficult problem if your bankroll (or your “account size” in the case of trading) isn’t large enough. Variance will eat you up eventually.

@ Tue Jan 08, 2008 11:53:03 PM

BTW Shelby you might like Tommy Angelo’s excellent article on this subject…


@ Wed Jan 09, 2008 12:01:01 AM

Great article! Wished I had known Tommy. I was brought up with the Sklansky camp. I thought they were poles apart but now I realize Tommy found space with poker and David did not.

@ Wed Jan 09, 2008 12:41:45 AM

Actually the trouble I had switching to poker fron BJ was aided by Ray Zee. He was a mentor by donating to him. Zee was not great in a short game but at a full table I learned from him that discipline will pull you through. I also learned by watching him that he did not go through a large variance. The key was not paying off. These days I can relate to you and Tommy. I too spent time with an NYSE house and I understand more as time passes that there is a common thread to playing a game, I have learned an electicism which cuts to a zen like character and it is non dogmatic and difficult to convey. I have taught tens of people to be among the best counters in the world and have written programs to help people track a shoe in BJ but I am yet to teach someone to play poker successfully. In regard to trading, I had successes that lasted for years, but took a bath in a month. I had successfully written puts for a decade but now the formula no longer works. I do adhere to a Thorpe like conservatism with leverage and hedging that seems to stand the test of time. Maybe it is Thorpe that taught me to adhere to a bankroll and find what is significant out of insignificance.

I found to learn a musical instrument that bebop was the best form to master an instrument. Somehow space of the instrument is only found from this idiom. I am discovering from what I have encountered that if I am to find space in poker Tommy Angelo is the Charlie Parker of poker.

@ Wed Jan 09, 2008 02:15:37 AM

I will have to say that the reason I am attracted to this site is about Ed Miller. Malmouth whom I have played agaisnt many times set out an SOS signal needing an expert in NL poker knowing he was not one and not having confidence in David nor anyone else in his stable. Than comes Ed with limit. I owe Ed to ruining the game of limit with his relationship with twoplustwo. Ed has an intellect I would die for. I belong to Mensa, Intertel, Bertrand Russell Society and Triple 999. Ed with a short span broke down and explained what took me a decade to decipher. I am here to learn and I am learning weekly from Ed. The problem is he has found space from energy exerted. He knows that there is contribution needed toward NL but it is removed from the paradigm he found space with. But with all due respect Ed was able to convey what it takes to beat limit that was never able to be conveyed logically before.

@ Fri Dec 19, 2008 12:34:32 PM

Yeah I agree. I think however when we or anyone get to a certain level, it almost seems a disaster willing happen. I started with 1k which I can consistently lose on a monthly basis without affecting my finances. 2 Months ago I busted my whole bank from which I built up to 140k. From there I figured hey lets play a few HU like all the other high rollers in the 100/200+ tables thinking ive finally made it. Long and behold, it took me less than 3 weeks to lose it that took me 8 months of disciplined bankroll habits. Sure I feel like I can do it again then I again I really don’t know. It’s all a chance we can take. I’m so pissed now that I just want to not even play again unless I start with 10k and build it back. Then again that’s the worst way to build your foundation of bank roll management. I just don’t understand how some of these crazy players can build their banks so huge taking the risk that I took. I’m a pretty sound guy who runs his own business which I feel are the same principles of poker.

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