How should you manage your online poker bankroll?

ionapaul

A couple of posts in the 'Are you a winning player' thread started me thinking: for those players with significant online bankrolls, how do and should you manage said bankroll? Some posters mentioned they hadn't cashed out (I'm assuming that to mean no cash had left the online poker room-Neteller combination).

Leaving thousands of euros in dollar-denominated poker room accounts or sitting in a euro-denominated Neteller account seems like a terrible waste of capital, given the ease of transferring cash to and from the most simple of savings and investment vehicles, the demand savings account. For those with online bankrolls in the tens of thousands, other options such as mutual funds with very low entry and exit fees might be suitable places to store the 50% of your bankroll you hope never to need - you still could access it within a few days if needed.

Leaving any amount unused in a dollar-denominated account has proved to be a mistake over the past year and could easily continue to be the case - how have players dealt with the currency fluctuations and ongoing risks?* Playing $1/$2 a year ago was the equivalent of playing €0.78/€1.56, now $1/$2 is the equivalent of playing €0.68/€1.36 - do you think many in Europe have moved up stakes as a result?

Think about it this way - a winning European player might have increased his BB/100 winrate over the last year as a result of improvements in his game, but unless he has moved to higher stakes (and assuming he's playing the same number of hands) he is making less a month than in the previous year!

Anyhow, just wondering what people's thoughts and experiences were regarding managing and optimising use of your online bankroll and reducing risk to the same. If there a few threads on 2+2 on the subject please let me know. Given that there are a few financial professionals among us, maybe they have some good ideas.


*Another thing popped into my head here - with the housing crash, credit crunch and probable recession on the way in the US, when does this feed into the online poker scene in the US and what results will it have? I imagine less money feeding into the poker system so games will get tougher, fish harder to find and many of the semi-decent players will move down in stakes.

Imposter

I've tried starting similar threads in the past and they tended to die a quick death! Hopefully this one is an exception.

Personally I intend putting about 1/2 my live bankroll into a savings account. It's got a reasonably good guaranteed interest rate if the money stay in for 9 months. At least it'll track and maybe slightly better inflation if nothing else. I guess i'm gonig for such an account as I guess it's probably one of the better options in terms of having relatively quick access to the monies. I'm also beginning to investate funds, and if as you say there are low entry and exit fees, then I may also consider them for poker money in the future. Of course that means I need to continue increasing my br to a level where doing something like this makes sense.

ionapaul

Yeah, I noticed that these types of threads arn't so popular but I was thinking about it so decided to throw it to the floor to see if anyone had any thoughts! I do think that players who spend hours and money buying poker tracker / getting coaching / improving their game are really missing the big picture if they are not devoting some time to clever use of the capital involved in playing poker.

ollyk1

These types of threads are the acid test Paul and for me there is a simple reason why they aren't so popular.

Most people (including Boardies) lose money playing poker so having to make plans for managing their capital will always run into excuses to hide the fact that they are losing money in the long run and bleeding money into the game.

I used to have a complex spreadsheet tracking my BR and expenses (my money goes in a cash deposit account once it goes over €1.5k in cash) but it made me a real BR nit and the game was less about fun and more about grinding out a measly hourly rate.

This year I've been giving live cash games a go and whilst I expected to lose or break even initially I decided that I'd cut myself some slack and just try to keep a running total of where I was for the year. It's worked out reasonably well so far but its probably time to re introduce some real discipline and try and guage an hourly rate etc.

As for your central point about managing your poker monies it applies to so few people here that it's very unlikely to generate a big thread Paul but I think that's irrelevant. Signal over noise and all that.

ianmc38

im completely ignorant on the investment front but would be interested in hearing suggestions/ideas.

like what's the return on short term investments where the money is accessible within a few days notice? I cant imagine anything too lucrative (like greater than a % or 2 per annum)

Macspower

I personally dont think that a lot of our bankrolls are large enough to justify moving them around to get the best rates etc.... Maybe I'm wrong at a sub 10k BR....?

Your right about the exhange rates... I made a plan when I went full time a year ago to take 2k USD from my BR each month as a wage.... I've thankfully managed to do this while keeping my BR intact increasing on it.... but I now find that 2k when it arrives in my bank account is now only 1300 euro and not enough to make it worth my while so I've increased it to 2.5 k but havn't moved uo levles to compensate... I've increased the number of hours and hands I play to compensate.... but it's not really the answer..

400nl is no easier then it was last year and probably tougher if anything..... so making a living from the game with the current exchange rates is getting tougher by the minute...

pok3rplaya

I've been doing a lot of research on this lately and it seems there is just no easy solution. I've got books on investing coming from amazon soon and I've been trawling the net etc etc and basically the problem of retaining liquidity and reducing fees (currency exchange, service charges) and the effects of inflation/currency shifts while ensuring a good investment is a very difficult one. I'd wager this is the reasong that you have had seen no solid answers, there aren't any.

NickyOD

I recently opened a neteller account in €. I asked if I could just switch the base currency on my existing dollar account but they forced me to open a new account and go through all the identity and security checks again which was a pain in the ass but ultimately worth it as it now means my money isn't losing value as it sits online. I keep the absolute minimum I need to play in dollars and withdraw regularly. I also keep some money on a boss site and withdraw by bank transfer which incurs zero charges and is just as quick as neteller.

It's definitely worth keeping your bankroll in Euros as since you're playing in dollars you can see your bankrol actually grow rather decrease in value if you were doing the opposite. In the new year the € is likely to go as good as $1.50 so I think anyone with any significant amount of dollars held online is completely nuts keeping it that way.

phantom_lord

I converted my br to euro a while ago since I could only see the dollar declining, and I was gonna pay the charges anyway on withdrawals over time.

At least now it's more liquid and currency fluctuations aren't as much of a concern.

Ollieboy

hate telling people this...lol

kept a large amount online at the start of the year in $ over 2 sites. I loss a lot due to currency movements, around 6k. I've now move the money out of my online bankroll into Anglo Irish deposit accounts.

I've currently a large bankroll(to me anyway) online in Euro's, but this mainly came around from a good runs in there major Sunday tourneys on this site and I'm currently withdrawing this money to my deposit accounts again.

The problem with withdrawing is simple, I've stop playing 5/10 and not playing all the bigger tourneys online, like the 100 rebuys etc on stars, so its as effect my selection of games. I only keep about 2 to 3k online now, but have this spread over a few sites in $ and euros. But 90% of my bankroll is in accounts and I dont see it going back into the poker community.

RedJoker

I remember reading some threads about this on 2+2 a long time ago but I probably wouldn't be able to find them now.

Putting money from your bankroll into investments is generally a bad idea. A bad run in the market coinciding with a bad run in poker could mean having to drop down levels and playing lower stakes could mean that you're losing more potential returns then you could have made from investing.

Another problem is that if you follow the markets regularly and the market is declining it may affect you psychologically causing you to play badly. Also if the markets decline you may decide to take your money out at the very worst possible time for fear of losing more of your hard earned money. And moving money in and out of funds would kill you on fees.

Investing is extremely important but keep it separate from your bankroll. Take money out of your bankroll to invest longterm, don't use your investments as a bankroll.

If you have a significant size bankroll then putting a % into an online savings account is a good idea.

RoundTower

I agree, my "bankroll" is in poker sites, neteller, a current account, or wads of cash and I recommend the same for most people.