I was introduced to poker back in 2007 while I was in college (back when it was legal). It started from a friendly $5 buy in and quickly climbed up to $500 sit-ins. The sound of shuffling poker chips were music to my ears.
Learning how to play poker definitely changed how I view money. I was your typical broke college kid looking forward to $1 beer specials at the bar, and in short time frame, I was the guy ordering a Grey Goose and Red Bull. You could say that I had a pretty lucrative poker run while in college, but as they say, all good things come to an end.
Spending Money Is Way Too Easy
I had my first “big score” when I played a live cash game at a friend’s place. It was a $20 buy-in and the total pot quickly rose to over $400. By the end of the night, I vividly remember cashing out around $300.
I remember going back home, still filled with adrenaline. It was the fastest and easiest money I’ve ever made. So what exactly did I do with the winnings? I went to Wal-Mart and bought a flat screen TV for my dorm.
Lesson #1- Learning How to Save Money
Many of you can attest to this. You get a nice bonus, you win some money at the casino, or you somehow come up with extra cash in your pocket. What do you immediately think about? Maybe that nice vacation you always wanted to take, or a down payment on your dream car, or splurging on a juicy $70 rib-eye steak.
Bankroll management was never my forte back in college. Instead of setting aside a portion of my winnings, I would immediately think about what my next big purchase would be.
Every Penny Adds Up
When I was playing online poker, I would mainly play in MTTs, or multi table tournaments. These would consist of 100s of players, sometimes even thousands! It was like winning a jackpot. You could walk away with a 50-100x return on your money if you took down first place.
I found myself playing in a lot of small tournaments. It didn’t seem like a lot of money at the time, but playing twenty $10 tournaments per week costs me $200.
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Lesson #2- It’s the Small Purchases That Really Matter
It’s hard to imagine a few things here and there making a huge dent in your budget. When you look at it holistically, it’s always the little things that add up. You’ll always remember your big purchases but never the small ones. For example, one of the biggest changes I’ve made is by always buying generic brands over brand names. I have a tendency to always look at the ingredients and 9 times out of 10, you’ll realize that it’s all the same thing.
I also started taking public transportation to work. It would cost me about $12/day to park at a nearby lot all day, which turned out to be $240/month. It was super convenient especially during the brutal Chicago winters. Instead, I decided to commute to work for $4.50/day round trip. This saved me $150/month.
Depositing Money Was a Button Away
Perhaps the reason why I played in so many tournaments was because of how simple it was to deposit money. The poker site had my debit card information stored, so all I had to do with enter three little numbers (CVV code) from the back of my credit card, and voila!
Lesson #3- Be Careful with 1-Click Buys
The other day I was on my Groupon app. I was sifting through to see if there were any interesting deals. I stumbled on a deal that was pretty useful and I went through the checkout process to see what the total purchase price would be. Before I even knew it, I had already completed the purchase.
Same goes with Amazon. Everyone makes it dead simple to complete a purchase, mainly because they already have all the necessary information from you if you’re a returning customer.
Play Within Your Boundaries
During the peak of my short lived career as a poker player, I was making a little over $7,000 per month. I decided to play in higher stake games, thinking that I would make more money proportionate to what the buy ins were.
I was wrong. The nature of the game changed dramatically. I was up against better players and I had no reason to be playing these type of games. My bankroll had a steady downward decrease until I had rock bottom. I busted out. I got caught up in the moment and literally drained my account.
Lesson #4- Live Within Your Means
When I first started making real money in poker, my expenses quickly followed. I spent more money on clothes, electronics, and eating out. One of the toughest things to do is to save money when you have money. It’s easy not to spend money when you don’t have anything to spend, but it’s easier to spend money when you have more money to spend.
Nothing is Ever Guaranteed
When you have a hand in poker that’s almost guaranteed to win but you suffer a lose, it’s called a bad beat. You’ll flop the best hand but the turn and river will paint a completely different outcome. It happens more than you can imagine. The opponent will have a 1-2% chance of winning and they beat the odds.
Lesson #5- Save for the Unexpected
You’ll never know what kind of curve balls life will throw at you. In a blink of an eye you could lose your job or have an unexpected medical expense. That’s why it’s super important to keep an emergency fund or contribute to your savings account.
If I had better bankroll management in playing poker, perhaps I would’ve been on the cover of Card Player magazine, but that certainly isn’t the case. For all the poker players out there, what was the biggest financial tip you’ve learned?