The Value of Money - Part I

While checking out information on a few poker forums, I ran into a thread that discussed the differences between the money you play with in a poker game and the money you use for outside activities. One person noticed that quite a few players are not afraid to put an entire month's wager at risk with a very marginal holding, while at the same time these people will walk an extra mile if they can get a

$1 discount on their groceries.

This reminded me of a story someone once told me, or maybe I read it in a book or magazine. A high-stakes poker player and his friend are at Burger King or McDonald's, and our poker player orders a burger. When asked what kind of burger he would like, he answers, "How much are they?"

"Well," the person behind the counter replies, "the most basic burger is $1.49, and if you like some extra cheese on it, that will cost you an additional 15 cents." The poker player just stands there, hemming and hawing, and finally decides to take the plain burger.

His friend looks at him and says, "Man, what the heck is wrong with you? You don't mind putting in $160 on an eight-card draw, but you are too stingy to spend 15 cents on a bit of cheese."

"Well, yes," the poker player replies. "When I put money into a pot, that's an investment. But when I spend money on things I don't really need, that just empties my wallet."

The Value of Money at the Poker Table

I may have had a few details of this story mixed up, but it is nonetheless a good example of the way some poker players seem to think. They will not hesitate to call a large bet on the turn with just an inside-straight draw (which in most cases is a play with a clear negative expectation), but they wouldn't dream of buying a round of drinks for the entire table – even when they know that it might make for a much more pleasant, and possibly much more profitable, game. Having said that, for the most part, these people are right. There is no need to spend a lot of money when it fulfills no specific needs or offers no direct return. I especially think that people who play for relatively small stakes, but who are serious in trying to make it as a player, should refrain from spending a lot of money on things they don't need. For instance, in the $10-$20 limit game in my hometown of Amsterdam, there are a few wannabe pros who would be very glad to make $10 an hour – yet they routinely spend $20 or $25 a night on food and drinks. The thing to do when it comes to money management is this: First, you should try to become the best player you possibly can, and then try to always make the best possible decisions while in the game. Now, if you calculate how much money you make on average each month, and you subtract the costs of living and your other expenses from that, you still should be comfortably ahead or you are doing something wrong. It may mean that you simply don't play well enough, but it also may mean that you spend too much money on things that won't help your poker career in any way. If you average $5,000 a month playing poker, you can probably consider yourself a rather successful player, but if your overall expenses exceed this amount, you will have to re-evaluate. You will either have to find yourself a job that pays better or – more likely – cut down on your expenses.

Some Final Words

In the second part of this column, I will analyze the value of money from another viewpoint. I will take a look at some examples of the decision-making process at the poker table, where expected value (EV) plays a role. It's an extremely important factor when it comes to the amount of money a player can make.