It's all about the bankroll

As mentioned in my previous post, I'm not playing poker to make money so that I can spend it, at least not yet.  Without a poker bankroll, I can't do anything, just as someone who has to drive to work every day can't do it without gasoline.  That should be intuitively obvious.  After all, if I win $500 playing poker, then take it all out and spend it, what am I going to do? The answer is start over,playing more $1 or $2 tournaments--or quit.

If I keep most of that money in my bankroll, it's an investment.  Not an investment like a savings account or mutual fund, where I can get interest and make more money.  In my case, as my bankroll grows, I can play higher stakes, and make more money.

Many of the poker pros who play in $10,000 (or higher) televised tournaments don't do this.  They actually borrow money so that they can play.  There are various ways that players do this, and it goes by various names, for example, "getting staked" or "selling pieces" of yourself.  In the poker world, many players buy pieces of other poker players, usually without a written agreement.

Ocassionaly a player will wind up selling more than 100% of himself, and there is a minor scandal in the poker community until everyone is paid what they are owed.  Of course, if someone operated this way in just about any other business (professional poker players, under US tax law, are self-employed business owners) there would be investigations, lawsuits ,arrests, and generally all kinds of legal mayhem.

I've been thinking about this post for a few days, and I just found out today that a few weeks ago, Gavin Smith, a Canadian professional poker player, said that he is broke.  At one time Smith was the World Poker Tour Player of the Year, and his total winnings, as estimated by the twoplustwo.com Pokercast, are about $5 million.

http://en.wikipedia.org/wiki/Gavin_Smith_(poker_player)
http://pokercast.twoplustwo.com/pokercast.php?pokercast=200

To his credit, Smith is not going to borrow money to keep playing.  He could easily do that, as he has a lot of friends in the close-knit community of touring poker pros.  Instead, he's planning his comeback the right way.  He's getting on the casino waiting lists for the very low-level cash games, and he plans to work his way back to the top.

I'm going to do it the right way.  The right way is the mathematically sound way, to make your statistical risk of ruin as low as possible, usually 2% or less.  In practical terms, this  means investing less than two percent of your bankroll in any one poker tournament, or to put it another way, a tournamnents should not cost more than 2% of a player's bankroll.  That's why 50 buy-ins are considered the mimimum bankroll for SNGs.

For larger tournaments, with field sizes in the hundreds or thousands, there is a lot more statistical variiance (cashes will be much larger, but happen much less often), so that 100 or more MTT buy-ins are necessary to play safely as a pro.

The main reason that I'm still messing around with $1 tournaments in 2012 is that I didn't practice proper bankroll managemen.  That's terribly ironic, and humiliating, because in the 2+2 Beginers Forum, I tell playes over and over that correct bankroll management is the most important thing that that a poker player can do to give himself a chance at success.

I was pretty good about sticking with a level that I could afford.  But I treated my bankroll as cash for emergencies.  It may have seemed necessary at the time, but it's no different that if we stopped buying gasoline, even though my wife has to drive to work every day.  I told myself that I was taking poker seriously, but obviously I wasn't, and I'll never make that mistake again.

I know what I have to do.  My wife undertands the importance of my bankroll, and she's with me on this.  2012 is going to be the year when I finally start turning poker into a real income.