Bankroll Management - When do you pay yourself?

So, this question is on my mind. Obviously, one goal of a professional poker player is to build his/her bankroll up enough to be able to safely play at higher limits. For example, I play at $1/$2 no limit, but I'd like to build my bankroll up enough to eventually play at the $3/$6 game.

Assuming the professional player keeps good records and plays for the long-term, how would he pay himself?

In other words, suppose you just finished a whole weekend session in Atlantic City. You turned a fantastic profit of $1,000. How much do you put back into your bankroll and how much do you pay yourself?

I suppose you could do 50/50, but suppose on your next trip to AC you lose $1,500. That means that your total bankroll is now DOWN $500.

Playing poker costs time. If you are doing it as a profession, you should be paid for your time. So, how should you pay yourself? By the hour, win or lose? By a percentage of winnings per session? A decided upon salary once a week or month?

All this is supposing that you have enough professional discipline to not spend all your winnings on shopping sprees immediately after every session.

This is long winded, but my question is basically HOW DO YOU PAY YOURSELF?

As a bonus question, how do you keep track of the bankroll payouts to yourself on your spreadsheets?

Thanks!

If you're really aspiring to play professionally you should have about 10000 before you start playing at 1/2NL so the swings don't crush you. Then I guess you take out just what you need because you won't make a decent living at 1/2 - I don't think. You move up when you have around 25-50 buy-ins for the next level. It really comes down to experience. If you rely on this for your income I think you can save yourself some sweat by playing it conservative... very
The question is really - what is your goal. Do you want to keep grinding at 3/6 or do you want to move up. If you want to move up I guess it's better to keep your dayjob and take some risks - but still you shouldn't play with less than 25 buy-ins unless it's really just a one-shot adventure into higher stakes poker.

Likely people who play poker for a living have this factored into their play. For example, if you play 3/6 and you know you can consistently make 4BB/hour (a good goal over time) then you are making $24 an hour. At 5/10 you're making $40 an hour.

High level players generally have such a huge bankroll that unless they have a bad weekend they can walk into Vegas or AC and walk out with a couple of grand over a weekend. Reading Phil Gordon's books he would enter high level tourneys and get knocked out, and then go and play cash games in the same casino to win his money back .

I think if you're playing to actually pay your bills the game changes quite a bit. If it were me I would have lots of money put aside each month in case of a bad run so that bills could get paid. Your bankroll is just that, your bankroll - not your source of income.

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Originally Posted by oskar

Then I guess you take out just what you need because you won't make a decent living at 1/2 - I don't think.

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I beg to differ on not being able to make a decent living at 200nl. I'm assuming a reasonable winrate at 200nl is something like 3ptbb/100. That $12/100. If you are multi-tabling playing say 6 or so tables you can reasonably get about 400 hands/hr. So that's $48/hr on average. 5 hours per day, 6 days a week and your at $5,760/month or $69k/yr. I don't know what you see as a decent living but that's pretty damn good me thinks! Of course alot of players are playing more than 6 tables.

edit: Is my math off anyone?

Awesome thread, me!

Here's one way to do it for say a month's period of time.

Working Money = Winnings - Taxes - Average Bills/Cost of Living

Then break Working Money up into parts for savings/emergency fund, extra spending money, and bankroll padding.

Edit: I'll go a step further.

Say you play $100nl for 25k hands/week (about 30 hours/week 16-tabling which is about standard for full ring) at 2 ptbb/100 and that there's only 28 days in a month for simplicity. In a month you'll make about $4000. Now we add in rakeback or bonuses or whatever benefits you get from whatever site you're on. We'll round this down to about $1500, so your income for the month is about $5500.

About $1500 or so will go to taxes depending on your state income tax and what you deduct and whatever else (assuming you live in the United States). That leaves $4000 to deal with. Now suppose your cost of living is $2000 for the month. That leaves you with $2000 to divide up however you like.

I know some people who play regularly at the local casino at $1/2 and they live off their winnings. But they're puttin' in 40-50 hours/week. Of course their flirtin' with disaster because they're so under-rolled from spending every dollar they cashout. Those games are so freakin' juicy it's like playing $10NL online only 20X the profits. :?

Anyhoo, I've only played "semi-professionally" like a lot of other FTR posters, meaning I only had partial income coming from poker. I usually withdrew somewhere between 25-50% of my "winnings" at the end of each month. If I had a down month however, I wouldn't make a withdraw.

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Originally Posted by enteratlantis

I need to know about Texas Holdem Poker, How we can play this

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I predict a bannhammer

Lol.. He even went through the time it takes to get up an avvy. I don't even have an avvy. Damn... I'm outclassed by a spammer.

Anyway, putting all the money back in your bankroll is one of the best investments you can make.

Its all about goals.. imo don't even think about trying to make a living off the game professionally or semiprofessionally until you have:

1. 6 months of expenses in the bank.
2. A big enough bankroll to splash around in the games you think are optimum for profiting. Whether that be $50+ buy-in mtts/sngs, 1/2+ cash games etc.

If at all possible, reinvest all winnings into your bankroll as a means toward reaching the above 2 requirements faster.

Tj

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Originally Posted by a500lbgorilla

Anyway, putting all the money back in your bankroll is one of the best investments you can make.

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This is true up until a point when you have a lot of idle money sitting around that could be doing better in a money market account or something.

But the point is obviously well-taken.

For me I've used the Money Management spreedsheet lying around here somewhere and edited it for my own needs. Basically it goes like this:

First few pages are used as my BR "rules". No-Limit, Limit, MTTs, SnGs. My rules could be considered tight in that I've also split it up into Micro, Small, Medium, Large and High-Stakes. Each jump makes my minimum BR 2x as much as it was before (if not more).

Then I keep major notes on how I'm playing. I play anything from 3 to 8 sessions a day depending on how long each session I play is. At the end of the month I know exactly how much I've made (or lost) on any game I play. For example I'll have my profits to LHE seperated from my profits in NL or PLO (if I played it).

Then I take out half my profits above X at the end of every month. X is a random amount that you feel is worthy of being withdrawn. I then split X in half, putting half into a long-term savings and half to be used as or when I want.

Long and drawn out but I'm planning for my future as well as my present.

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Originally Posted by Andrew

Long and drawn out but I'm planning for my future as well as my present.

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Exxxactly.

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Originally Posted by XxStacksxX

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Originally Posted by oskar

Then I guess you take out just what you need because you won't make a decent living at 1/2 - I don't think.

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I beg to differ on not being able to make a decent living at 200nl. I'm assuming a reasonable winrate at 200nl is something like 3ptbb/100. That $12/100. If you are multi-tabling playing say 6 or so tables you can reasonably get about 400 hands/hr. So that's $48/hr on average. 5 hours per day, 6 days a week and your at $5,760/month or $69k/yr. I don't know what you see as a decent living but that's pretty damn good me thinks! Of course alot of players are playing more than 6 tables.

edit: Is my math off anyone?

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I have a benefits-rich, salary-poor faculty contract of $51k per 9-month academic year (I make more teaching summers and consulting, but the benefits are based on my 9-month contract). To replace those benefits and income when self-employed, I would need to make about $110k per year. In other words, the self-employed poker player can only actually "use" about half his winnings for living expenses since the rest goes for taxes, health insurance and retirement.

A US-based poker player is self-employed, so he or she must pay matching social security. The combined total tax burden is aprroximately 15% FICA + federal income tax + plus state income tax which, in many cases is 40%. And he has no health insurance, which is easily gonna run at least a grand a month for a family. And no retirement savings. But you're young, so $300 a month is okay with you.

So take $5,760 * .6 - $1,000 - $300 = $2,156 per month. That's tough to live on, depending on tons of other variables.

We still haven't accounted for downswings that cut into your bankroll and months you might no be able to withdraw your $2,156, or not all of it. And we haven't accounted for your car blowing up, your washing machine flooding the entire first floor, etc.

I'm nearing 40, and I know a lot of the "kids" on FTR are in their 20's. I'm just suggesting that you need to think about stuff like insurance and retirement. Some day you'll be married and start thinking about kids and then realize - HoLy F**k!!!! I ain't got sh!t for net worth, nothin' to fall back on if my kid gets sick. But not if you've done some decent planning.

I personally wouldn't become self-employed if I couldn't make at least $150k's a year (and probably not even then). I think someone without 3 kids could probably be self-employed to the tune of $100k's a year and build a solid financial portfolio. But any time I see someone thinking about playing "professional" poker with estimated earnings of less than $100k per year, I worry they're headed for long-term disaster.

That being said, I think there is a way to make $100k's per year plus playing 100nl and 200nl, if you multitable and have a historically decent win rate.

Or you could just be like me, using poker as a means to get through school =)