|
|
 make your bankroll work for you
MAKE YOUR BANKROLL WORK FOR YOU
A Better Bankroll Management Strategy for Medium-Stakes Grinders
Many of the better cash game players on this forum are costing themselves somewhere between $50 and $100 every month because of horrible bankroll management. No, I'm not talking about the 20-buyin rule. By now we all know that as a rule, you shouldn't move up until you have at least 20 buyins for the next level, and most of the good players here follow that rule religiously. Many of us are conservative enough that we prefer to have 30 or even 50 buyins before we move up. I'm talking about the players who have oversized bankrolls of thousands or even tens of thousands of dollars just sitting in their online poker accounts, not earning any interest. This is a huge waste. I want to share a strategy that's worked for me, allowing me to play at the stakes I want, without leaving too much extra money in my account uselessly.
First off, a few words about who this article is written for. It's primarily for the medium-stakes players between 100NL and 400NL who have bankrolls of 50 buyins or more. These players are a fairly new phenomenon. Players used to be able to keep moving up as soon as their bankroll allowed, because the games at all of these stakes were good enough that a solid, fundamentally sound player could beat them easily. Not anymore. Any time there's a way for intelligent people to make some easy money, a lot of them will jump on it, so the games have been filling up with more and more decent players. Meanwhile, the U.S. ban on online poker scared away a lot of the fish. As a result, many players have found themselves sitting on bankrolls of 50 or even 100 buyins, but they still don't think they have the skill to move up, so they keep on grinding away at a level they know they can beat. I am one of these players, and I know for a fact that there are lots of us on this forum.
This article is NOT for players who are still at 10NL or 25NL working on their game. If you play at those stakes, your bankroll probably isn't big enough to earn much interest to speak of anyway, and those games are still soft enough that I would recommend moving up aggressively as soon as you have an adequate 20-buyin bankroll. It's also not directed at high-stakes players. Most of them have big enough bankrolls that they'd be better off paying a quality financial advisor than listening to my advice.
If you're the type of player that I described, my claim is that IT SIMPLY DOESN'T MAKE SENSE TO KEEP MORE THAN 20 BUYINS IN YOUR ONLINE POKER ACCOUNT AT ANY GIVEN TIME. For a winning player, downswings of 10 buyins or more, while they do happen, are very rare (I've been playing seriously for about a year, and I've had exactly two downswings of that size). That's rare enough that you can easily afford to keep only 20 buyins in your account, and re-deposit in the unlikely event that you go busto.
The rest of your bankroll should be stored in a savings account earning 5% APY. There are plenty of banks that offer such savings accounts. If you're uninformed, here are some links to get you started:
www.EmigrantDirect.com
www.HSBCDirect.com
www.INGDirect.com
www.VirtualBank.com
If you set up a savings account with one of these banks, they will give you 5% APY on any money you store with them. Here's an example of how this works. Let's say Joe plays 4 tables of 100NL and his bankroll is $8,000. Joe keeps $2,000 in his online poker account, and $6,000 in his Emigrant Direct account. 5% interest on $6,000 is $300, so that means Emigrant pays Joe an extra $25 every month. That may not seem like a lot, but over the course of a year or more, it really adds up. And if Joe has a serious downswing, he can always withdraw from his savings account and deposit enough to keep his bankroll at 20 buyins. If he decides to move up, he can deposit enough to put his bankroll at 20 buyins for the new level. And if he's running really well, he keeps withdrawing money to his savings account so that he never has much more than 20 buyins in his online poker account.
There are investments out there that pay a lot more than 5% APY, but most of them require you to commit your money for a length of time (at least a year). So in my opinion, these e-banks are the way to go if you want to earn interest on your money but you still want it to be part of your working bankroll.
Some posters on this forum like to say that if at all possible, you should avoid cashing out your winnings, because doing so prevents you from moving up and making more money in the long run. I agree with them. But that means that you shouldn't waste your bankroll on a car, a vacation, or a plasma screen TV that you don't really need. Cashing out to a savings account is perfectly fine, because technically that money is still part of your poker bankroll, it just doesn't happen to be stored in an online poker account.
I recently read on 2+2 that the former FTR member loanhorse has about $24,000 in his PokerStars account. He is one of the best 200NL players on that site, and he doesn't play any higher than that quite yet. On the one hand, he's practicing good bankroll management by not playing in a 400NL game that's given him a lot of trouble in the past. On the other hand, his bankroll management is horrible because he's costing himself nearly $100 in interest every month, when all that money simply doesn't need to be there. Don't make the same mistake that he's making. Make your bankroll work for you.
Mike C.
Cliffs Notes: Stop leaving huge amounts of money in your poker account. Unless you have a really horrible downswing, you only really need about 20 buyins. Put the rest of your bankroll in an e-savings account and start earning interest on it.
|
Reply With Quote
