A Bankroll-Building System

I recently read a statement by someone that if you buy a poker book for $20 or $30 and get only one good idea out of it – that is, you find only one thing that might potentially help you, whereas everything else will not improve your game in any way – that $20 you've spent is a true bargain. I felt like this a couple of years ago, after having bought and read Doug Young's High Stakes Poker: The Sky's the Limit. While the book itself didn't help my game as much as I would have liked (it's more a personal story on how to become successful than an attempt to offer serious advice for players wanting to move up to the big games), I got one idea out of it that has helped me tremendously during the first four years of my professional poker career. On pp. 33-34, in the chapter "Building Your Bankroll," Young states:

"Now, this is the procedure. Go to the bank right now and open an account. What you will put in this account is 10 percent of each and every win you have at the table. You don't touch it except to buy equity. If you're playing poker to pay the bills, then you should be aware that you don't get a pension plan with this job, so the 10 percent that you pay yourself is your financial cushion.

This is emergency money and only when it's an emergency can you take a dime out of it. Even then you keep strict accounting of what you take out and repay every cent when you get back on your feet.

If you do this, it won't be very long before you see the account grow and grow. If you follow this very simple step for saving money from your winnings, I know this will be one poker book you will never forget reading."

I have used Young's system for a very long time; only recently (when I started playing abroad more frequently than I used to) have I given up on it. This doesn't mean I think the system isn't of any use anymore; it's just that I think it's of more use to the player just getting started than it is to someone who has established himself somewhat and gotten to know the way things work in poker. The good thing about the system is that it keeps you focused on your two main goals: increasing your bankroll all the time and playing winning poker. When you start playing for a living, you may be surprised by the big swings that are part of the game; if you become faced with a long losing streak (which you inevitably will), it may be hard for you to stay focused and keep the faith. Now, if you see that your bankroll keeps on growing even though your results haven't been very good, it will be easier for you to maintain your long-term perspective and get over your recent – bad – results. (Also, if you are having a good run, saving this money might prevent you from spending it on things that won't help your poker in any way. As you should know, spending your poker winnings early in your career, rather than adding them to your bankroll to play in bigger games when you're ready, is a definite recipe for disaster.) You've basically got two bankrolls now: your active bankroll (the money you've got at home to play the game) and your passive bankroll (your account, the money you never touch). Although, of course, your total bankroll doesn't grow when you're having a bad run, it will be easier for you to cope with your losses if it seems like you're still on the way up. That is, this system will be very good to you psychologically, and when you've just gotten started as a freshman pro, having something solid to rely on can be extremely important. If the amount of money you have available to play (your active bankroll; that is, it is not the amount of money in your account) is rather large, you may want to develop this system a little bit further. I will show you how I used the system during the first couple of years of my career, and some of the adjustments I made. Not only did I save 10 percent of every winning session, I also saved 5 percent of every winning month and 2.5 percent of every winning year. This meant that if I had a few big wins but also a couple of big losses, I wouldn't be able to save a lot of extra money at the end of the month; on the other hand, if things went very smoothly during the entire month (that is, no big losses), my passive bankroll grew accordingly. I made these additions to help me focus on the long-term perspective even more than I already did. The system looked something like this (all figures are purely fictitious):

After every session, I wrote down my results and the amount of money I "saved" from it. I went to the bank every time a month ended. By doing this, my (passive) bankroll kept growing and growing, even when things weren't going so well for me.

When you try to make a living playing poker, it's hard to always keep things in the right perspective. By very thoroughly holding on to this system, it will be easier for you to think: "Hey, this month I've played 150 hours and my hourly rate is $20, so therefore I have made $3,000," even if you are going through the worst streak of your career and may in fact have lost four or five grand over the entire month. Remember, this system helps you psychologically only if you're a winning player already. If you cannot beat the games in the long run, you can create as many bankrolls as you'd like – but you will still go broke.