Learn About Bankroll Management in Poker With Tips from Daniel Negreanu

A poker bankroll is the amount of money a player has set aside to play with at the poker table. You should only ever add discretionary or recreational funds to your bankroll. Proper bankroll management means that if you were to lose your entire bankroll, you’d still be able to pay rent, afford bills, and sustain yourself.

If there’s a constant in poker, it’s variance. Having a bankroll large enough to withstand the game’s natural variance in upswings and downswings is crucial to success, whether as a professional poker player or a recreational player. It doesn’t matter how good you are—if your bankroll is too small, you will go broke. For live cash games, you need a bankroll that will cover at least 20 buy-ins. The smaller your skill edge, the larger your bankroll needs to be.

Risk of ruin, or gambler’s ruin, is the principle that your risk of losing everything goes up with each bet. Generally, your risk-of-ruin percentage depends on two factors:

• The size of your bankroll
• Your skill level

To decrease your level of risk, you can play with a larger bankroll. Additionally, the better you are at poker, the lower your risk of ruin. (It goes without saying that this only applies to winning players—no bankroll is big enough for a losing player.)

Nevertheless, just because you have a large bankroll, doesn’t mean you should move up in stakes. After all, higher stakes make it easier to lose it all.

How to Track Results For Better Bankroll Management
It is important to track your poker results accurately. The typical metrics you should record include:

• Venue. Is this a live game or online? Are you playing in a casino or elsewhere?
• Game type. Cash games versus tournament poker, as well as multi-table tournaments versus single-table tournaments can all impact your game.
• Hours. For online poker games, you can utilize database software, which calculates your hourly rate and overall win rate. Live players should always keep track of their hourly rate.

Here are some simple tips for managing your poker bankroll effectively.

1. 1. Divide your personal and poker finances. Professional poker players treat it as a business. In the same way that you wouldn’t use your personal checking account for a business expense, or vice versa, don’t mix your personal funds with your poker bankroll. At best, you’ll struggle to stay in the game. At worst, you’ll struggle to pay your bills.
2. 2. Don’t try to “stop” variance. One of the biggest differences between professional and recreational players is that the latter tend to change their game when faced with the inevitable downswing. But variance has no memory: you can’t break a losing streak by playing recklessly, just as you can’t extend a winning streak by playing conservatively. Instead, take every game one hand at a time.
3. 3. Move down in stakes when you need to. If you move up in stakes and get poor results, don’t be afraid to move back down again. Often, this process is repeated many times before a player moves up permanently.
4. 4. Avoid unnecessary expenses. If you’re playing poker at a casino, you may be tempted to use your bankroll to pay for the luxuries around you: food, drinks, massages, etc. Remember that every dollar you spend is potentially a big blind you can’t use later.

Daniel advises that cash games be your anchor when it comes to regular income. Tournaments exhibit much more extreme variance and cannot be relied upon as a source of income for live players. Cash games, on the other hand, will allow you to steadily increase your bankroll in a safer way.

Whether you’re an enthusiastic amateur or dreaming of going pro in Texas hold’em, mastering the game of poker takes time, wit, and cunning. No one knows this better than Daniel Negreanu, the biggest live tournament poker winner of all time. In Daniel Negreanu’s MasterClass on the art of poker, the six-time World Series of Poker champion delves deep into poker strategy, advanced theory, and hand-reviews of his winning games. Put yourself across the felt from Daniel and learn how to sharpen your mental game through demos on reading opponents and spotting tells.

Want to become a better poker player? The MasterClass Annual Membership provides exclusive video lessons from master poker players, including Daniel Negreanu and Phil Ivey.