Bankroll Management

This is from a site called sitandgotraining.com.

• Problem 1: Playing beyond your means.
• Problem 2: Moving up too quickly.
• Problem 3: Going on Tilt / Bad Luck.

Now I will outline the bankroll rules that I strictly follow to address these problems.

THE BANKROLL RULES

Rule 1: Deposit a maximum of $50 per month.

To start building your bankroll you must first develop respect for your money. The best way to create respect for your money is to apply a penalty for losing your initial deposit. Do this by limiting the frequency of your deposits. Start with a deposit of $50 and only allow yourself to redeposit once per month. If you lose your deposit, move to the play money tables until the next month. However, by applying Solution 2 in addition to the playing strategies I will teach you in the lessons to come, you might never need to deposit money again!

Rule 2: Apply the 5% and 25x rules.

The 5% rule is simply this: do not commit more than 5% of your bankroll to any one sit 'n go buy-in. By limiting your buy-in to 5% of your bankroll, you will limit your losses for any one event. In addition, as you build your bankroll, this rule will allow you to move up in stakes. However, if you begin to lose money at the higher stakes, the 5% rule will also "force" you to move back down. The one exception to this rule--you can always play at the $2 level, regardless of your bankroll. In addition, do not move up to the next level until your bankroll is at least 25x the buy-in. By using the 25x guideline you will give yourself a few shots at winning at the next level before the 5% rule forces you to move back down.

For example, if your initial deposit is $50, you should start by playing the $2 sit 'n go tournaments. Stay at the $2 level until you grow your bankroll to 25x the next level buy-in. So if the next buy-in is $5, do not move to the $5 level until you have grown your bankroll to $125. I realize that 5% of $125 is more than the $5 entry fee; you want to give yourself a little buffer to start winning at the next level. However, if you have problems winning at the new level, you must apply the 5% rule and drop down to a lower level if your bankroll drops below $100. By applying the 5% and 25x rules you will ensure you are always playing at a level appropriate for your bankroll.

Important Note: The 25x rule works great when you are starting out at the lower limits. However, once you build you bankroll and start playing at higher limits, say $20 and above, or start playing multiple tables, I recommend a larger bankroll to protect against downswings. Consider staying at the $20 level until you have 50x the next buy-in.

Rule 3: If you lose 3 times, quite for the day.

To avoid going on tilt due to bad beats or a run of bad cards, the solution is simple--stop playing! If you lose 3 times in a row, quit for the day. By quitting, you will stop the trend (at least for that day!). The next day when you start playing again, your frustration will have lifted and you can approach the game with a clear mind. By applying the strategies outlined in the following lessons, it will be unusual that you will experience this issue two days in a row. But if that does happen, you might want to take a few days away from the game. Going on tilt can destroy your bankroll. It is better to sit out for a few days than to give back the profit that you have so carefully earned.

Rule 4: Withdraw 10% Per Week

Once you build your bankroll go over $1500, it is time to start rewarding yourself for your efforts. I strongly recommend that you withdraw 10% of your total bankroll every week. That might seem like a lot but it only represents two buy-ins (if you are following the rules above!). Withdrawing money does two things. First, it protects the money (you can't lose what isn't in your online account). But more importantly, it rewards you for your hard work.

CONCLUSION

As I mentioned in my introduction, I went broke numerous times trying to learn the game. As I look back on my failures, each time can be attributed to breaking one or more of the rules outlined above. However, I have not gone broke since I adopted the rules. Obviously I can not force you to apply these rules--I can only encourage you to adopt and apply them to your bankroll. Here they are again:

• Deposit a maximum of $50 per month.
• Apply the 5% and 25x rules (50x at higher stakes).
• If you lose 3 times, quit for the day.
• Withdraw 10% per week.

Although critical, there is more to building a successful bankroll than effective bankroll management. You must also learn and apply the strategies that will set you up to WIN. I will begin outlining the strategies in the next lesson.