Once you have accumulated your $888 bankroll from your initial $10 deposit, your job is far from done. While it’s great that you multiplied your initial deposit by 88.8, $888 is far from a life-changing amount.
Some people strive to win only a little money from poker, but most dream of accumulating an amount that is life-changing.
To win life-changing money, you must continue to grow your bankroll.
Take It Slowly
While I initially suggested a somewhat aggressive bankroll management, with you keeping about 20 buy-ins, as you continue your climb up the stakes, I recommend you keep many more buy-ins. In fact, most professional poker players keep about 100 buy-ins for tough cash games (and they will get tough as you move up), and 200 buy-ins for tough tournaments and sit n’ gos.
They also play a smattering of lower stakes when their main game is abnormally tough, padding their bankrolls by playing in games where they are definitive winners.
While I do not suggest you keep 100 buy-ins just yet, if you have $888, continue grinding $50 NL until you have about $3,500. Grinding from $888 to $3,500 will feel like an eternity, given the initial aggressive bankroll strategy outlined in the first part of this article series, but it is what must be done if you want to ensure you stay in action.
From there, you can start taking shots at $100 NL. I suggest you have about $8,000 before moving to $200 NL, and $20,000 before moving to $400 NL. It may seem inconceivable to have $20,000 in your poker bankroll, but realise that $20,000 is only 22.5 times your current $888.
Keep in mind that you have already multiplied it by 88.8!
Once You Are Winning Life-Changing Money
It’s difficult to quantify what “life-changing money” is because it varies from person to person. I will broadly use the term to describe an amount you would be willing to quit your job to pursue poker full-time.
I realise that for some that number is $1,000 per month, whereas for others, it is $10,000 per month. Once you are winning at a life-changing rate, it is important that you really pad your bankroll, so you do not lose your ability to continue winning at that same rate if you go on a downswing.
After all, nasty downswings are inevitable and certain to happen if you play enough, especially as you move up and your edge diminishes. This fact necessitates keeping a sizable bankroll of about (or more than) 100 buy-ins for cash games and 200 buy-ins for tournaments and sit n’ gos.
To build such a sizable bankroll, you have to put in a lot of hours at the table. Don’t view this as a bad thing. Enjoy the grind and the experience of winning significant money by playing a game. Cherish your opportunity.
While this article is not about going pro, realise that if you are winning a decent amount of money part time, it does not necessarily mean you will enjoy playing poker as a career. Poker is one of those activities that makes a great hobby and a way to make side income, but when it is your livelihood, it becomes much tougher. If possible, I recommend you take a few weeks off from your job and grind full time, as if you were a pro. If you like it and continue winning substantial money, only then should you consider leaving your job.
Be smart and make intelligent, well thought out decisions.
You have hopefully noticed that I have not addressed how to go about cashing out your winnings at any point in this article series. While I do not advise that you keep a sizable bankroll in any one location (such as your online poker account or your bank account), I suggest not spending your winnings until you have a well-funded bankroll.
Like startup companies, you should not consider taking money out of your bankroll until it is fully funded such that it is making more money than it can profitably utilise. Only once a company reaches a certain profit level do they start paying dividends.
About 14 years ago when I decided to become a professional poker player, I didn’t cash out a single dollar until I had built a $20,000 bankroll from my initial $50 deposit, and even then, I only took out $1,000. I never treated poker as a way to make money. Instead, I viewed it as a game where my goal was to get my account balance as high as possible.
Eventually, I got to where I was winning about $20,000 each month (which was obviously way more than a 19-year-old could spend). I made a point to keep my expenses somewhat low, about $1,500 per month, and continued the grind until I eventually had about $300,000 in my online account.
While I certainly do not suggest you keep that much money in any online poker site, my sole goal was to build my bankroll so I could be well-funded for larger and larger games, allowing me to continuously increase my hourly rate.
I understand that my hardcore “don’t cash out until you are rich” strategy isn’t for everyone. A reasonable cash out strategy is to withdraw one buy-in every time you win 20. While this strategy is far from “optimal” for most people, giving yourself a small monetary reward as you work hard to move up may help keep you motivated. Alternatively, every time your account increases by $100, you can cash out $5 (or more or less, depending on your goals).
One thing that ruins many new professional players is they think they are supposed to cash out some set amount each month (usually to pay their living expenses). I strongly advise against doing this. This move doesn’t work well unless your bankroll is huge because you will likely not win consistent amounts each month, especially if you don’t play a lot of hours.
While it is nice to think you can readily depend on your poker bankroll to pay your expenses, it is much wiser to have money equal to about a year’s worth of expenses set aside, separate from your bankroll. So, even if you somehow bust your bankroll despite cautious management and excellent play, you will still be able to survive for a year and figure out your next step in life.
Once you are more than adequately bankrolled for your game of choice, you should consider taking shots at bigger games that you are well versed at, even if the stakes may feel out of your league. I do not suggest you take shots at other game varieties that you are not great at.
If you won all your money playing No-Limit Hold’em and you currently play $400 NL, it would be silly to hop in a $400 (or even $100) Pot-Limit Omaha game. If you want to spend time learning a new form of poker, start small and work your way up, just as you did with your game of expertise.
If you have a $30,000 bankroll and are playing $400 NL, if an abnormally soft $1,000 NL game is running with an open seat, feel free to devote $2,000 to taking a shot. If you win, you will add a significant amount to your bankroll, perhaps allowing you to move up faster than you otherwise would. If you lose, you can go back to grinding $400 NL, where you know (due to keeping track of your results) you can continue to profit.
Just be sure to remain disciplined when taking shots. Countless skilled poker players have gone broke, or lost a large chunk of their net worth, by saying they were taking a shot, but in reality, they were mindlessly gambling higher and higher, chasing their initial losses. If you devote $2,000 to a shot and you lose, be disciplined and move back down.
Once You Have Lots of Excess Money
Eventually, if you profitably grind the same game for long enough, you will build your bankroll so large that even if things go incredibly poorly, you will not go broke. Going back to when I had $300,000 in my online account as a 19-year-old, the game I played required a $40,000 bankroll. This means that I essentially had $260,000 of “extra” money just sitting in my online account. Instead of stagnantly sitting there, I should have put it in a liquid asset that has a decent likelihood of increasing in value.
Once I realised I could invest my money, I made the amateur blunder of buying a $150,000 house. I was always told as a kid to buy real estate because owning a house is apparently supposed to be an “end goal” of life. The problem with this is that a house is not a liquid asset. If I happened to go on a significant downswing, I would have had to wait around to sell my house, likely at a loss due to brokerage fees.
Having about half my net worth tied up in a house was not an ideal situation. There have been a few times throughout my career where I thought “I really wish I had an extra $150,000!” That said, it currently provides a decent amount of rental income, so it isn’t as bad as I am making it seem. I just want to be sure that you don’t take $10,000 of your $20,000 bankroll and use it as a down payment on a house, especially if you can realistically go on a $10,000 downswing.
Until you have an abnormally large bankroll, I suggest you keep your money in an asset that you can quickly sell, especially if there is a decent chance you may need the money in the near future. Currently, I have most of my money in Vanguard Exchange Traded Funds, which are basically large baskets of stocks that are managed for a microscopic fee. Simply put, I own a tiny piece of thousands of publicly traded companies.
This investment strategy works well because, on average, the best companies in the world gain a few percentage points each year, making my portfolio somewhat immune to the normal swings of the overall stock market. Each year, a few types of businesses lose a decent amount of value whereas others gain a lot. I have no way of knowing what will happen in the financial market (I fully realise I am not an expert), but if I own a piece of everything, it usually evens itself out, resulting in a fairly consistent small profit each year.
There are various other investment vehicles you may want to consider, although as they become more exotic, they either carry more risk (gold, bitcoin) or become difficult to sell (classic cars, fine art). Just be sure that you have done your homework and have a decent idea about what you are investing in, especially if it is a niche market.
Also, don’t invest your money in something just because a random person tells you it is a sound investment. If I have learned one thing in my time on this planet, it is that if everyone is investing in something, it is probably an excellent idea to stay away.
In this series of articles, we have discussed:
- How to diligently grow $10 into $888
- How to continuously move up in stakes
- How to take advantage of the common errors you are likely to encounter in your opponents’ strategies
- When to deviate from a fundamentally sound strategy
- What to do once you have a substantial bankroll
All that is left for you to do is put in the study required to become a great poker player and put your skills to work on the felt.
If you have any questions at all, feel free to ask me on twitter @JonathanLittle. I am happy to help.
Good luck in your games!