Episode #62: Money Management: Take 2

One way to become a better gambler is to properly managing your money. Here are some notes from this episode along with some of your tips:

Know why you’re gambling:

• This needs to be addressed before you start.
• Are you really trying to make money?
• If so, you’re approach will be vastly different than that of a casual gambler.
• For low rollers, it’s near impossible to make money- a large bankroll is needed to handle short term volatility and necessary increases in spread when applicable.
• If you truly want to make money consistently, you’re limited to two games: live poker and blackjack.
• If not for profit, your only other option is entertainment.
• If that’s the case, your bankroll should be managed in a way to maximize your entertainment value, not as a way to increase principal yield.
• In other words, your goal is simply to have the most fun you can have with the money you brought, not to have the most money at the end.

Strategies

• Have daily limits
• Don’t dip into future days and winning days should be banked at the end of each day (Ryan via Twitter)
• Envelop method
• Don’t chase losses or comps
• No trips to the ATM (Chris on Twitter)
• Keep other day’s gambling allotment in the safe
• Have an exit strategy. Lose your planned gambling money during a session? Make a habit of doing something, anything right after. Perhaps a drink at the main casino bar. Maybe a $20 VP session.
• Don’t succumb to peer pressure
• Know the value of your gambling dollar. Is timid play above your normal average bet worth it?

Tips

From you:

Johnny D: Be happy with 25% of your buy-in. Never chase. Have fun. Have balls!

Jason: If I triple my $100 buy in on VP, I cash out and put in a fresh $100.

Sheil: Be happy with small wins.

Mr. Bill: Trying to use stop loss limits to take breaks. Sometimes unsuccessfully when downtown.  

The Math Nerd:

To me, money management all comes down to discipline.  Set some reasonable win/loss limits and stick to them!  (A reasonable loss limit is NOT 100%)  It’s tough to do, for sure.  

Now for each session you play, you must keep track of your money.  On machines it’s easy, your balance is displayed on the screen.  But for table games here’s what I do.  At blackjack or poker-type table where there is no rack, separate your cheques into stacks of equal height, either 5, 10 or 20 high. If they are $5 chips, each stack is $25, $50 or $100.  Quarter chips I would stack in groups of 4, 8, 12… so, $100, $200, $300, etc.  This helps you to quickly count up your bankroll.

For craps where you’ve got a rack, actually 2, right in front of you this is much easier and cleaner. You can even use both racks as part of your money management “system”.  You can put your initial buy-in on one rack and, hopefully when you get up, put your profit in the 2nd rack and play only with that group of cheques.  If you’re looking to double your money, the length of the cheques in the racks will be equal when you’ve doubled your money.

If you really struggle with discipline try this – put all of your cheques in one rack to start with.  Make your bets from the first rack and when you get winners handed back to you, put those in the 2nd rack. You make bets only with the first rack and collect into the 2nd. When the first rack is empty, you’re done!

Here’s my trick for counting up your bankroll during craps play.  Use the different colors of cheques to separate into groups.  5 red’s, then a white, then 5 red’s, another white, etc.  Every 4 groups of reds is $100.  (Plus the separator $1’s)  Or 5 red’s, then a green, then 5 red’s, green, etc. Or 4 greens, then a black, 4 greens, black, etc. You can get an accurate count of your bankroll very easily between rolls or when the table is being reset after a 7-out. Finally – QUIT WHILE YOU’RE AHEAD, DUMMY!

Big thanks to Todd for sharing. I really like the way Todd separates his chips on the craps table to know exactly how much is remaining. A stack of single colored chips can be hard to count, especially after a few sodas. One point of contention, and I know I’ll get some flack for this, but I think, at times, 100% is a reasonable loss limit. I say this because if I have responsibly built my bankroll in such a way that it is truly superfluous income, then if I have a good time, parting with all of it is not bothersome. One thing I have never done is place money on table felt that I was not comfortable never seeing again. That being said, I still would like to leave the table with some of it. Ideally, I’d leave with more.

We all like to win money, but concentrating on limiting losses, in my opinion, impacts enjoyment, thus negating my purpose of playing. This is what has changed for me in the last two years. It doesn’t mean I’m completely risk averse or don’t like to manage my money at the tables in such a way to ensure I leave with some money, but it’s not my purpose for playing and not my driver while I bet.

You can limit losses by simply sticking to a strict budget and not straying from that budget no matter the gambling outcomes. While I am prepared to lose all my my money, I’ll still try to protect winnings, knowing how rare it can be for casual gamblers. I, like others, am a fan of stop losses.

I’ve heard from multiple people that they’d like to leave the table with a certain percentage of their intial buy-in. If that’s the case, from a pure mathematical perspective, you could simply sit down with less money. If your goal is to leave with at least 30% of your buy-in, simply buy in for 30% less. But, I guess that gets to the heard of the issue. Most of this is psychological, not mathematical. I mean, mathematically speaking, our best bet is to not bet at all. But where’s the fun in that?