PacDragon's Money Management Tips

Bankroll: $1043.87

Published on January 3, 2006 By PacDragon In Gaming

It's the new year, so I decided I need to keep better track of my poker sessions. I suspect I'll be making enough from the game this year that I'm going to have start to paying taxes on it. It's kind of annoying that I can't just declare my net win for the year. I have to add every single winning session to my income, then deduct every single losing session. It'll be vastly easier to start tracking this in a spreadsheet right now.

Since I'm doing all this improved record keeping anyway, I decided I may as well start blogging about it. For the rest of the year, I'll keep you all informed of my progress. I might offer a few tips here & there, but keep in mind I'm only a level 4 Poker Player, so I probably don't know what I'm talking about most of the time.

“Level 4? What is he talking about?” See what I mean? I'm making this up as I go. Ok, time for the first lesson: PacDragon's Money Management Tips.

The first thing you need to do is keep your poker money completely separate from the rest of your money. Stop thinking of your bankroll as money, it is now just points. Either put it in a separate bank account or keep really good records. Since I play a lot of RPG's, this concept is pretty easy for me. I consider my bankroll as equivalent to XP.

The next thing is to make sure you always play at the appropriate stakes for the size of your bankroll. My game of choice is limit Texas Hold'em. I won't explain the rules here, there are better sites for that, but the stakes for that game are listed in terms of small bet / big bet. For example, I currently play $1/$2. That means it costs $1 per bet before & on the flop, $2 per bet on the turn & river. You really should have at least 300 times the big bet to play at a certain game. This number isn't an absolute, and there's a lot of debate as to the appropriate size, but this is the system I use.

Level 1 – Play Money - $0
Level 2 - $0.25/$.0.50 - $150
Level 3 - $0.50/$1 - $300
Level 4 - $1/$2 - $600
Level 5 - $2/$4 - $1,200
Level 6 - $3/$6 - $1,800
Level 7 - $5/$10 - $3,000
Level 8 - $10/$20 - $6,000
Level 9 - $15/$30 - $9,000
Level 10 - $20/$40 - $12,000
Level 11 - $30/$60 - $18,000
Level 12 - $50/$100 - $30,000
Level 13 - $100/$200 - $60,000

There's a lot of random variation in poker... if you're a better player than your opponents, you'll definitely earn money in the long run, but your bankroll needs to be able to survive the randomness of any particular session. As you earn money, and your bankroll grows, you'll move up in stakes. If it shrinks, you must drop down in stakes. This should help you survive and make sure you're “vetted” before you take on a new level. This method will accelerate your bankroll when you're winning, but decelerate your losses if you're losing. If you refuse to drop down in stakes, you risk losing all your hard work. Keep that in mind.

It can be tough when you break into a new level... the competition is tougher and you're right at the edge. One loss and you might have to drop back down. It took me a while to move from $0.50/$1 to $1/$2. Every time I moved up, I lost and had to drop back down. I had to save up, then take another shot. After a few tries I finally won enough to stay, kept earning, and now I'll be ready to take my shot at $2/$4 before too long.

If you're starting out at level 1, just play a lot of free poker. Nearly all of the sites let you play with fake money. Don't make any real deposits until you feel comfortable. Once you're ready, put $150 in your bankroll and start out at $0.25/$0.50. Keep going until you bust and have to redeposit, or until you have $300 and can move up. A lot of sites also give bonus cash on your first deposit, so you might want to check out Bonus Whores for a good list of what bonuses are out there. Those can really help keep your bankroll healthy while you're learning. Good luck!

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