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• Bankroll Management

  March 17, 2009

  Everyone talks about it, yet so many poker players seem to toss it out the window; sometimes it's an ego thing, other times recklessness. It's also never enough to simply understand how to manage a bankroll; it's applying that knowledge where people go wrong. I've certainly been one of those people a few times throughout my poker life.

  When it comes to maintaining a bankroll, one must first assess how risk adverse they are. Simply put, a player that can handle the gamble more mentally and emotionally will be able to work with a smaller bankroll. I choose to have greater bankroll requirements than most people I know. I enjoy feeling a little bit more comfortable knowing I will always be able to handle the tough swings that variance can put a poker player through. I cannot stress enough how any decent player with solid bankroll management skills has the ability to make a lot of money playing poker. All it takes are some guidelines to adhere to and discipline. I've seen many friends swell their bankrolls playing over their head and constantly moving up in limits, only to lose it all when their luck runs out.

  Some of the greatest bankroll management skills that I have ever seen came from Chris "Jesus" Ferguson when he chronicled turning a starting bank of zero into over $10,000 in less than a year. Here are the rules Ferguson went by while trying to complete his challenge.

  - Never buying into a cash game or sit-n-go with more than 5% of his total bankroll, but he was allowed to buy into any game with a buy-in of $2.50 or less.
  - He would not buy into a multi-table tournament for more than 2% of his total bankroll, but is allowed to buy into any tournament with a buy-in of $1.00 or less.
  - If at any time during a no-limit or pot-limit cash game, the money he had on the table represented more than 10% of his total bankroll, he would have to leave the game when the blinds reached him.

  Sticking to these rules with great discipline, Ferguson was able to reach his goal of $10,000 in less than a year. This was a truly awesome job in exercising bankroll management and I hope everyone out there will strive to do the same thing.

  With that said, I'd like to lay out the guidelines I use for my bankroll. Generally, I use what I know as "The Rule of 30" for cash games. Basically, for no-limit or pot-limit games, I must have 30 buy-ins or more for a given limit and for limit games, I must have 300 big bets in my bankroll. When I buy into a no-limit or pot-limit game, I always enter with the maximum amount allowed, generally 100-200 big blinds. I know players that have taken this as a starting point and adopted it to fit their style of play. Some players can work with less buy-ins, others would like more. I prefer to keep this as the general guideline for the lower limits and plan on increasing my requirements the higher I go in stakes. The reason for this being that when you're playing for more money, I'd rather feel extra comfortable and it may take some getting used to a limit as you move up. So, it's always a good thing to be on the safer side of things as you improve and climb the ladder.

  For tournaments, I aim to have 50 buy-ins in my bankroll for given stake. Playing multi-table tournaments can be a great way to increase a bankroll exponentially, but one must remember the amount of variance that these tournaments can have. Players can go through extremely long streaks of not cashing or barely cashing and really crush their bankroll. It's also important to move up more slowly in tournaments. One day you could hit a score playing some of the smaller buy-in events and decide to jump to a higher stake. Without being careful, you could lose a bunch in a row without cashing and be out a good portion of your bankroll.

  Another important philosophy about bankroll management that a lot of players have backwards is how to handle their bankroll based on its size. Players with smaller bankrolls tend to really be nitty when it comes to playing because they know they only have a small amount of money to play with while players with larger bankrolls feel more careless because of the amount of money they have. It should be the complete opposite. For example, if you're bankroll is $100 total, don't be afraid to play slightly above your head if you feel you are good enough because even if you lose the $100, it's only $100. Now let's say you had $100,000 to play with. It's more important to stay conservative with $100,000 because taking a shot with that high a bankroll could cost you tens of thousands. After the fact, it's going to be much easier to replenish the $100 than it is the tens of thousands.

  If Chris Ferguson was able to build a five-figure bankroll starting from zero using those three simple rules above then why can't you? It's going to take time and there will be bumps in the road, but as long as you make a plan, stick to the guidelines, and above all, exercise discipline, you'll be climbing up in stakes before you know it.

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