Bankroll Management

What is a Bankroll? 

A bankroll is the amount of money you set aside solely to play poker. This should be entirely separated from the money you require for your daily needs – Rent, food, and utilities. Having a bankroll is crucial as your career is entirely dependent on it and without proper management, your career will be over even before it begins.
 

What is Bankroll Management?

Bankroll management is the process of managing the amount of money you risk at any point in time relative to the size of your bankroll. Ideally, you want to have at least 30x multiplier for Live Poker and 50x for Online Poker. Due to the nature of the game, no matter how skilled you are, you will face variance throughout your career and most poker players underestimate the power of variance. As such, you need to have a healthy bankroll in order to withstand all the variance that is to come. 

In live poker, you will be playing around 30 hands per hour which means that you will experience variance at a slower rate and because of the skill level of opponents in live poker, it will not hit you as badly. However, in online poker, you will be playing about 100 hands per hour per table. If you are multi-tabling, you could be playing up to 1000 hands per hour or more. With these much volume, it is perfectly normal for variance to hit you hard where you could possibly lose 5 buy-ins in a single day and swing back up the very next. There will also be times where you go on a 10-15 buy-ins downswing in live poker and 20-30 buy-ins in online poker before swinging back up.

If you plan on playing a $2/$5 game with a buy-in of $500, you will require at least $15,000 in your bankroll. Similarly, if you are planning on grinding online at NL20 with a $20 buy-in, you will require at least $1,000. 

In general, the larger your skill edge is in the game, the smaller the bankroll multiplier you will need. For weaker players or beginners, you will need a much larger bankroll to withstand the variance and also to compensate for your skill gaps.

For recreational players, you do not need a strict bankroll management since you are not going to be playing long term. However, you also do not want to be playing with your children's tuition fees or retirement funds.
 

In a nutshell, whether you are a for-profit player or a recreational player, always play within your means.

#1 - Run Good, Feels Good

If you happened to be on an upswing, taking shots at a higher stake and winning feels amazing. Your winning sessions feel sweeter than usual since it is now a significant portion of your entire bankroll. For the same amount of effort, you are now enjoying greater returns. Life is good. 

#2 - Sub-Optimal Decisions

As the stake gets bigger but our bankroll remains the same, we are now taking more risk per unit of buy-in than before. As much as we aim to make maximum EV decisions, sub-consciously our mind tends towards the safer option albeit it being the most +EV. We give up on our aggression without having the nuts, we avoid going for thin value as we are too afraid of facing re-aggressions, we under-bluff certain spots while we overfold in spots where we should be calling and lastly, we avoid navigating in big pots. Overall, our entire gameplay has shifted and we become a -EV and losing player.

#3 - Downswing

Since you are now under-rolled and facing a downswing, your losing sessions become more impactful and detrimental towards your entire bankroll and career. You start to make losing plays and become an overall losing player. Now you are turning up to the tables day after day with a completely wrong goal - To chase your losses. As each losses cannibalize a significant portion of bankroll, in the end, you are faced with 2 options - To drop back down in stakes and rebuild your bankroll or continue taking shots and risk busting your bankroll.

#4 - Competency 

There are 2 main reasons why players are playing at certain limits. Some are grinding at $2/$5 while some are battling out at $25/$50. The first will be that they are wealthy and these amount of money on the table are insignificant portion of their income. The second one will be those professionals that have proven competencies. They are winners at every stake below $25/$50 and have an accurate track record of being a consistent winning player. At the end of the day if you do not fall into these 2 buckets of players, you are only going to sell yourself short and play the game at a huge disadvantage.