Wednesday, August 19, 2009

Advice on Playing Poker Professionally

This year so far: contains one 30+ BI downswing, two 20BI ones and one around 15 BIs.

Right around the time that my computer started hanging (resolved now; one of my memory sticks was failing) I was getting ready to blog a little about what it's like to play poker for a living and (on demand) to try to share any worthwhile tips on what it takes to "make it." Despite being delayed for five days, here goes:

I'm an optimist. I tend to think happy thoughts a lot. I tend to not worry about the future too much and I tend to try to make the best of the "now" instead of the "then." This is true for almost every aspect of my life, with the important exception of money. I'm raised to be careful with money - not cheap or greedy, but to be sure not to overextend myself, not to get myself in unnecessary debt and to have a decent budget. For a natural optimist like myself, this takes some practise in practise. Fortunately, I have a wife who's a natural born pessimist and she helps me carry it out.

I tell you this, because I think that financial pessimism is a sound trait to have. And it's especially sound if you're thinking about starting your own business - including playing poker for a living. Now, I have a feeling that the majority demographic of my readership (there's actually hundreds of you, which I find both encouraging and a little intimidating) to which my advice on playing poker professionally may be of interest is going to be young. Probably early twenties. To some extent, being super careful with money when you're 22 is not going to be entirely necessary. You probably haven't settled in with any really expensive habits yet - like a house or a car or a family - and for some, living with your parents may still be an option if all else fails. If you belong to this group and think that I'm being ridiculously uptight about the money part, then you have the right to ignore it and I wouldn't blame you for it.

But I didn't have that option. I needed to be able to cash out a certain amount every month to cover expenses, and not pulling that off wasn't a real option for me. If you're young and without any major expenses and can make it on very little every month, then there's not even a real need to consider yourself a poker professional. Just look at it as something you do for a little extra cash. Or maybe a lot of extra cash. But if you're planning to actually make a long term living out of it, I'm guessing you wouldn't want to settle for earning $20k/year because seriously, there are better jobs to have for that kind of money unless you despise contact with other humans and/or want to get away with working only 1-2 hours per day. So if you're looking to build a future around playing poker professionally, here's my advice:

Win-rate pessimism

Look at your win-rate for the past 6 months. Slice it in half and ask yourself if you can live off of that. And not only live off of it, but also that it's sufficient to put some of it away for savings, and some of it for "vacation." As in, taking time off from poker for an extended period of time - 3+ weeks, perhaps - without going bankrupt. But why slice your win-rate in half? Because you're not as good as you think you are. Look: If you're considering playing for a living, you've probably made a bunch of money at poker. And, like it or not, there's a statistically very high probability that you've been running hotter than average (if you're going to refer me to your EV-graph, save it - that's a tiny part of how well you run) because if you had been running cold, I guarantee you that you wouldn't be thinking about going pro. See what I mean? People who are considering going pro are compromised of people who are good players and at worst running average, and of people who are not as good as they think they are and are running hot. The average "hotness" of the to-be poker pro is above expectation. So slice your win-rate when you do the numbers.


Volume pessimism

Next, consider how much you're actually going to be playing. I set a goal of playing 75k hands/month and didn't reach it once. Now, to be fair, it's not because I couldn't. It's because I didn't want to. And therein, I guess, also lies an important lesson: Consider the fact that you're often going to be faced with options that are going to seem a lot more appealing than poker. So if you want to be really pessimistic (and I've already told you why I think that's a good idea) also slice your expected monthly volume. I've heard people claim that they can just make up for lost volume later if they want to do something more fun today and while that may work in principle, I must then ask you to slice your expected win-rate even further. If you're playing casually today and winning, say, 3bb/100 then I can almost guarantee you that your win-rate would be lower if you tried playing a marathon session. Tilt and fatigue are costly companions. Better then to cut your expected volume, probably trim at least 25% off of it.


"How Much You Need" pessimism

Third, see if your expected monthly earnings will be at least twice what you need to cover your expenses. Now you may be thinking that I've already asked you to slice your win-rate in half and your volume to 3/4ths of what you may expect and this is still supposed to cover twice your monthly cash-outs? The reasons for needing to average more than your monthly nut is partially so that you have padding. If you have two average month followed by a cold spell, you'll still be able to support yourself. The other reason is so that you can, in time, move up in stakes. There's more money to be had at the higher stakes but if your projected earnings just about covers your expenses, you'll never get there.


Savings

Next step is to have a bunch of money saved up. And no, your bankroll doesn't count as a savings account. The reason you should have money saved up is in case tragedy strikes. Injury may cause you to be hospitalized for quite some time. And if that should happen, heaven forbid, or something else that prevents you from playing, it would be very unfortunate if you had to live out of your bankroll because when things return to normal you'd be out of a job because you wouldn't have a bankroll to sustain you. This is a huge point and one that I think most young people miss. I remember what it was like to be 23 and invincible. But now we have 6+ months of expenses saved up, and in principle even that may be on the short side - however, I knew all along that I wouldn't have to last longer than 5 months so it was a safe gamble. If you have no backup, this is something you seriously need to consider. Yeah, severe injury is a long shot, but it's not something you should be willing to gamble on.

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But if, after cutting your win-rate in half and your volume by some, you'll still win more than twice what you need to sustain yourself, and you have a very healthy savings account (net - pay off any debts you have first, please) then it looks like you're in good financial shape for playing poker for a living long-term.

I'm such a kill-joy.

Now, if you're younger, without any real expenses, still living with (or have the option of moving back to) your parents, then by all means, play poker as your primary income without any of the above safety nets, that's fine. But keep in mind that you should try to acquire the safety nets as you go. Cash out more than you need every month to try to build a savings account. Work on your game and make sure you stay ahead of the curve. And, for god's sake, don't forget to have fun, not only while playing but to reserve time for doing something completely non-pokery.

3 comments:

Icemonkey9 said...

Pure gold, great post FP.

Kev said...

Awesome post Fred, always a pleasure reading your blog.

Fletchdad said...

It was actually a google search 2+ years ago that led me to an article you wrote for cardchat (where I am a member since then) I read a lot of your stuff, never commented so far. Just a HU to say thanks. I love your blog, and your advice is always great.