A few weeks ago, while Tricia was still in Vegas, I got together with dawhiteninja to record a special podcast episode on Bankroll Management. Unfortunately, we had some audio problems so it never made it to air, but there were some real nuggets in the recording so I transcribed the episode instead.
Gareth: How you doing dawhiteninja?
Dawhiteninja: Hi Gaz. I’m really good thank you.
G: So what have you been up to recently? Have you been grinding hard? What’s been going on?
D: Yeah. I actually recently started a new job. I play poker about four times a week in the evenings in between having two kids, a wife and a career. The new job has some travel involved and I’m currently in a hotel room three nights a week so I’ve actually been getting to play a fair bit of poker undisturbed recently so yeah I’ve been hitting the online felt pretty hard.
G: Have you had any recent success that you want to share with our listeners?
D: I mean, it’s all relative yeah. I haven’t had a losing month (#sickbrag) in about six months…
G: [laughs]
D: …but I haven’t started off this month brilliantly so we’ll see how it develops.
G: OK
D: But not like you, I know that you chopped the Mini Mill? No, I haven’t had many successes as big as that recently. I chopped the Big 11 earlier this year, for my third time in my career, but that was about three months ago now.
G: OK, so you’ve chopped the Big 11 three times while at the same time as managing a wife, two kids and a career… how does that work?
D: It’s challenging. But the topic we’re going to talk about today, bankroll management, has a lot to do with it. I’ve been playing seriously for three years or so now. I had a very lucky week about three years ago that gave me a bankroll to be able to play a lot more. I’d been working on my game for about a year up to the point as well.
G: Sounds good. I mean I take my hat off to you for being able to manage the full-time career and the family and then the poker on the side. Tricia and I actually talked on the podcast a few weeks ago about how to manage relationships. We won’t get in to that today because we’ve got another topic to talk about, but I just think it’s fascinating. I actually mentioned you on that episode and how you were able to manage things – you have a date night once or twice a week where you make sure you spend that time with your wife, right?
D: Erm… just once a week yeah, let’s not get carried away.
G: [laughs]
D: I hope she’s not listening, but it certainly wouldn’t be moving to two. Once is plenty.
G: Right ok, so I suppose she appreciates that one day that she gets her husband to herself?
D: [laughs]
G: Ok then, I guess we should talk about today’s topic then, which you’ve already hinted at… bankroll management. I think it’s a really important thing to talk about. I’ve had a few questions in about this topic, generally along the lines of, “What should we be thinking about when it comes to bankroll management?” Is there still this idea that we should have 200x the buy-in or 100x the buy-in, which some people were asking as well. And what should we be thinking about? Is it bigger than just how many buy-ins we have? Or the average buy-in? Or is there a little bit more to it than that? What are your thoughts?
D: Well I think bankroll management (BRM) is fundamentally the number one thing that poker players, whether professionally or recreationally, need to be focused on. I think it effectively turns a game of gambling into a game of not gambling. There are a couple of underlying variables, as I say, that turns you from effectively gambling to a guaranteed or very likely success and profit. And that’s what I think is fundamentally brilliant about the game. Sure, it is gambling, and some people will see it like that and if they want to see it as a form of entertainment then that’s great for the people who are practising good BRM. Because they’re effectively giving their money away as far as I’m concerned. So yeah it’s absolutely crucial and a good part of BRM is really game selection.
G: Absolutely. OK, so as we move on I just wanted to talk about a few things you highlighted there about whether they’re practising good BRM or seeing it as a form of entertainment. Would you say that there might be players out there who like to put on $100 a week and play whatever tournaments they fancy? From my point of view, I think that’s an absolutely fine thing to do. You know, if you can replenish your bankroll because you’ve got another job then there’s absolutely no reason to keep a separate poker bankroll. That’s my opinion, you might think slightly differently. But if you’re playing professionally or even semi-professionally then you don’t want to keep replenishing your bankroll, you know your poker bankroll wants to be exactly that. You don’t want to have to add to it or dip into it and you want to keep your poker expenses separate from your life expenses then you need to be stricter with it and have some rules in space. Is that something you agree with or what are your thoughts on that?
D: Right yeah, I slightly disagree, mainly on the entertainment side of things. I haven’t met a player yet, whether it’s for entertainment or not, who plays to lose. I just think you’re setting yourself up for failure if you have the attitude of, “it doesn’t matter, I can reload at the end of the month with my paycheck.”
G: Yeah
D: And the reason why it sets you up for failure is I think it’s going to be really hard, I’m not saying it will be impossible, but it will be really hard to end up getting a bankroll like that and getting good at the game without getting frustrated and effectively leaving the game.
G: So what about that player then that just chases the big scores so they’re happy to just put money on at the weekend and play the majors and chase that big score, what do you think about that?
D: I think it’s gambling. I don’t think they’re looking for any long-term success. I think it’s going to be very hard for them to have any kind of long-term success. I’m not saying it’s impossible, of course you’re going to get a few players who get the lucky bink and that’s what they’re looking for, but very, very rarely does that happen these days.
G: So I guess when we set out to learn poker, we really need to learn how to manage money as well. I think it’s something that perhaps we need to do in life as well. I often speak to adults today and they say they wished they’d learnt about money management at school. Coming from an education background, we teach kids English, Maths, Science and various other things like languages and Music and Geography, but actually being able to develop a business or grow a brand or manage money might actually be more useful. So, I think there is an onus on poker players to learn how to manage money better early on in order form the foundation for a successful career. I guess that’s what you’re eluding to?
D: Yeah, yeah exactly.
G: So, what are some general rules then that you use for bankroll management or that you would suggest players out there adopt?
D: The fundamentals here are: you need to know roughly how many buy-ins you need as a buffer. So if you’ve got $1,000 bankroll and you work out you need 100 buy-ins you can play a $10 average buy-in (ABI). So that’s kind of the premise we’re working on, but of course there are variables involved in that – not all tournaments are the same. The variables you’ve got to look at are: the number of players in the tournament, obviously playing in a 10-man SNG is a lot less variance than playing in the Sunday Storm; you’ve got to look at your ability or essentially you return on investment (ROI) in that particular tournament; and what’s linked to that is the pay-out structure as well. You know, that’s pretty standard, it’s normally like 15%. So they’re like the three main variables. The other thing to think about is blind structure, so if it’s a turbo, hyper-turbo, but then that’s not a variable, that’s just directly linked with your ROI so your edge is going to be lower in the hyper-turbos compared to something like the WSOP Main, which has two-hour long levels. If you’re a good player, then the deeper and slower the tournament, the higher your ROI. Then there’s an underestimated variable that’s actually the strength of field, which is linked again with ROI. So the three main things are: ROI, number of players and payout structure, but really it’s really just ROI in that particular game and the number of players that you should really focus on.
G: Yeah absolutely. We’ve obviously talked about this before - we’ve talked about this tool over at pokerdope.com where you can go in and put in the number of players, the percentage of the field that gets paid, how many games you think you can play in a week/month/year and what you believe your ROI to be and then see how variance might affect you in various ways. I definitely recommend checking out pokerdope.com – do you have anything to add about that?
D: I think what would be useful for those taking their poker seriously is: you need to set out your schedule each night and work out the tournaments you’re going to play and then you can input those into pokerdope as a session and run how many times you play a week and therefore a year and then you can work out the probability of success, which will probably be a little bit lower than you expect even with a positive ROI. They’ve got the confidence intervals on there so you can be pretty certain about what it’s going to spit out.
G: Very cool. Do you know of any other tools online for bankroll management that will give you an idea of what games you should be playing based on field size?
D: There are a couple of apps that can help you manage your bankroll, but no I don’t use anything else I guess other than my brain and the standard rules that you eluded to earlier on.
G: I know of one site you can go to called bankrolltools.com and you can put in the buy-in and the average number of players in that tournament and it will tell you how big your roll needs to be. I’m just looking at it now, so for example, a $15 200-man tournament you should be looking at 120 buy-ins so $1,800, but let’s say we want to play the Sunday Million, we put in $215 and the closest entry-wise is the 8000 option, we’re then looking at 519 buy-ins or $111,585. So something you mentioned earlier about the bigger the field the more buy-ins you’re going to need, simply because of how difficult it is to run deep and get that big score. So pretty interesting to see that we need over 500 buy-ins for the Sunday Million – I’m going to say that 90% of the people playing the Sunday Million do not have over $100,000 in their bankroll – do you think that’s fair?
D: Yeah
G: So I guess those players think that it’s such a high value tournament that it’s one not to miss, so they fire. If it’s forming part of an average buy-in so let’s say they’re playing a $100 ABI where they’re flicking in some $55 and $109 as well then that’s something else to consider. You know, taking a shot every Sunday for that life-changing score, which is obviously going to have a very good effect on your overall ROI.
D: Yeah and that’s a really good point. I occasionally do exactly that, I’ll load up a single higher buy-in tournament, or a shot, which raises the ABI a little bit, but not enough to put the bankroll in jeopardy, and then you can apply the focus on that tournament on maybe the others that you’re grinding. I would question the bankrolltools.com site – are there any ROI calculations on there? It would be interesting to see what they’re stipulating as their ROI.
G: No it doesn’t let you put in the ROI unfortunately. It does for their SNG bankroll calculator, but not for MTTs. I don’t know what they’ve done. There is a bit of information at the bottom.
D: OK fair enough.
G: OK then. I guess we should wrap things up there. To give our listeners a takeaway hear I guess I would recommend a 200 buy-in rule, e.g. with a $1,000 bankroll you said earlier that you want to be playing $10 games, I actually think it should be more like $5 games. It’s obviously going to depend on everyone we’ve talked about today…
D: Yeah and also the amount of risk you want to apply to that figure. You know if you’ve got no real attachment to $1,000 then you can apply a 100 buy-in rules. If that’s all the money you can get your hands on for the year then you want to think about you might want to think about 500 buy-ins. So it’s all about the risk you want to attach to your bankroll really.
G: Yeah, I think you’re absolutely right. It kind of links back to the point I made at the start about how easy it is to replenish your bankroll and how important it is to develop that key business idea of being able to manage money from the get go and develop that skill and that understanding of money management so that further down the line when you have that $50,000 or $100,000 bankroll you can be confident you’re still going to apply the rules and not go broke.
D: So that’s it right? If you want to be a professional poker player you have to practise bankroll management – that’s the bottom line of it.
G: Absolutely! OK, so let’s wrap things up there. I’d like to say a massive thank you to dawhitenina for joining me today and being the guest host while Tricia is away. Where can people find you if they want to get in touch in the future?
D: I’m on Twitter, I think it’s @whiteninjapoker and that’s the best place to find me.
G: OK sounds good. Thanks for joining us guys and Tricia and I will catch you next time.