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Bankroll Management Theory

Posted at 20:42 2010-03-11

Full props to Jennifer “Jennifear” Sullivan on this concept. It’s her idea and I’m borrowing liberally from it.

As mentioned on the latest PokerNetwork Podcast I found this concept to be most intriguing and wanted to promote it a little to you guys. Bankroll management is a nice notion. Unfortunately for a lot of players – that’s all it is. An integral part of any winning player is their bankroll management, and yet too many players just continually go broke because they play above their means. However even those guys playing in games that they are rolled for, may be incorrectly practising bankroll management.

One element of bankroll management is not going broke, but what about when you start winning? How should you go about withdrawing cash without depleting or handicapping your playing roll?

Jennifear has come up with a great way of managing both sides of your bankroll to ensure that you’re not only winning, but your maximising your poker ability. The concept could also be adapted so that it applies to cash games, but this was originally written for tournaments.

Firstly the basics:

It’s been said a bunch of times that players need to play where their bankroll will allow them. So what does that exactly mean?

The following are recommended buy-ins for various tournament sizes:
Heads-up/Double or Nothing SNGs: 30 buy-ins
Single Table SNGs: 50 buy-ins
Two Table SNGs: 70 buy-ins
45 Player MTTs: 100 buy-ins
90-149 Player MTTs: 120 buy-ins
150+ Player + MTTs: 150 buy-ins

These should be enough for winning players to not go broke. Losing players unfortunately are going to go broke no matter what the size of their roll is. As stated before, surviving is half the puzzle, the other part is maximising your returns based on your ability as a poker player.

There is a simple way to go about this. We play poker to make money and cash should dictate how high the stakes are that we play. So if we follow a simple structure to cashing out, it will ensure that we are playing at the level where we will be making the most money.

Some people have the ability to make more money in lower stakes games, so therefore they should stay in these games. The following system will ensure that you are playing at the appropriate level.

Players should pay themselves a wage that is based not off how much they win, but rather how much they play. Basing pay around volume of play will mean that your ROI needs to be high enough to counter your pay-packet; otherwise you will be forced to move down levels until you can pay yourself a wage and continue to adhere to the bankroll rules set out above.

So how much should you pay yourself:
Heads Up/Double or Nothing SNGs: 2% of your buyin
Single Table: 3% of your buyin
Two Table: 4% of your buyin
45 Player: 5% of your buyin
90-149 Players: 6% of your buyin
150+ MTTs: 8% of your buyin

At the higher stakes levels smaller ROI’s will be expected. If you’re playing at elite stakes divide your long term ROI in half, and cash out that much per tournament.

This system has additional benefits in that it rewards playing more volume. The more you play, the more you get paid. Better still it keeps you playing in the levels where you’re most profitable. You should pay yourself at a set time like a job would – say on the same date each month.

Additionally Jennifear recommends using 25% of your cash out amount as a “shot taking fund”. This fund will allow you to take shots in bigger games that you’re not rolled for. It allows you to keep it fun and fresh as not many of us are auto-bot grinders who can stay perfectly disciplined all of the time.

This type of strategy could also be applied for cash game players. By using you’re bb/100 and taking out an appropriate percentage you could grow your roll while also gaining from the same benefits as tournament players.

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Bankroll Management - don't forget to pay yourself! Bankroll Management - don't forget to pay yourself!

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