Bankroll management exists in all aspect of life, including the traditional world. If you have a traditional job in the real world, you budget for expenses like food, drink, entertainment, rent, and travel. For every dollar you earn, a certain percentage must be put aside in order to pay monthly expenses. The same is true in poker, where poker bankroll management, or budgeting in layman’s terms, is critical.
Tournament Bankroll Management
In the high-stakes world of live and online poker tournaments, variance plays a large role. You’re not going to cash in every tournament you play and your significant wins will be few and far between. For most of your career, you’ll be busting before the money bubble, which can be quite a shell shock to players used to winning. When you bust out early, you experience a loss on the day, which can add up over time.
Poker pros like Chris Ferguson have developed steadfast rules of bankroll management in tournaments. They include not laying out 2% or sometimes even 1% of your bankroll in any one event, ensuring that if you come up short, your career will go on. Tournaments typically have the highest variance of any poker format you can play, so be judicious when registering for an event. Don’t drop more than 2% of your bankroll in any one tournament.
Cash Games Bankroll Management
In tournaments, one wrong move can mean an early exit from a tournament. Sometimes, a bad beat is all it takes to thwart your title hopes. If the tournament is a freezeout, you can’t buy back in. Instead, you’re relegated to the rails second-guessing key hands. In cash games, this isn’t the case. If the odds don’t favor you in one hand, you can quickly move on to the next, where real money will once again be at stake.
Rebuy tournaments only allow you to buy back in during a specific time period. In cash games, you can pony up another buy-in or top out at any point. The general rule of thumb I’ve followed for cash games is that if losing a buy-in will hurt you significantly, then drop down in stakes. Some sites have put this amount at about 2% to 5% of your bankroll. You’ll want to buy in comfortably for 100 big blinds at every juncture in order to ensure maximum play. This means that at a $0.10/$0.25 table, you should sit down with $25. Although the online poker site may offer you a smaller buy-in amount, always go for the maximum.
Avoid the Casino
We can’t stress this point enough. If you’re playing at an online poker room that also offers a casino, avoid it like the Plague. Exactly $0 of your bankroll should ever be put on the line in virtual or live games of blackjack, craps, or roulette, just to name a few. Instead, build and spend your bankroll on poker.
The reason isn’t that these games are rigged or anything like that. Instead, the logic for avoiding the casino lies in the house edge. In online poker, the house juice is simply the rake. If you’re more skillful than your opponents, you can dominate the game and be profitable. In the casino, you’re a guaranteed loser in the long-run. No matter how “skilled” you might be in predicting roulette numbers, you’re going to go broke in the long-run. In poker terms, it’s –EV to take your business to the casino.
Bankroll Management Summary
Being a successful and profitable online poker player requires proper bankroll management. Without it, you stand no chance of moving up through the ranks. When in doubt, exercise caution when committing your bankroll on the felts. You’ll be happy you did. Stay tuned to MacPoker.com for more helpful tips from poker experts.