Lately, thanks to the tutelage (harsh judgment, scorn, and ridicule) of my friend Jordan Cooper, I’ve begun trying to learn how to play poker for money. Aside from learning how to use the game mechanics to my advantage, another aspect of the game that I’ve been dedicating a lot of time to is that of the bankroll.
In case you’re unfamiliar with the term, a bank roll is your lifeline, and you use the value of your bankroll to determine the types of stakes you can afford to play. The higher your bankroll, the bigger the game you can afford to enter.
What people don’t know about professional poker players is that the bankroll is one of the most important factors of success. Without a high bankroll, and the discipline to maintain it, a poker player can never break out of the low stakes environment.
Sounds familiar doesn’t it?
If you follow Silicon Valley and the startup world at all, you might see a striking similarity between the poker player’s bankroll and the money that comes from angel investors and venture capitalists (VC’s).
Investor money is to startup founders what a bankroll is to a professional poker player.
But not many of you are startups that have raised money, and you’re probably not playing poker and building a bankroll, which is why I want to talk about the self-made entrepreneur style of building a bankroll without investors, and without a large reserve of cash to start with.
Why a high bankroll matters
Without a high bankroll, you’re stuck grinding day to day. You might be handing your ass to clients, working long hours, and/or scrounging pennies to pay your mortgage. Having been a freelancer, I can attest to the fact that the “feast or famine” rule applies to almost all of us.
You’re probably trying to build a product in your spare time, and though it’s entirely possible to do so, let’s be honest…it takes a hell of a long time, and I find that personally, I often lose interest or join the market too late when doing so.
The true problem with grinding a low bankroll is that you never get the opportunity to move ahead, and that can bring even the most industrious entrepreneur to their knees.
The feeling of a high bankroll
Just imagine that you pull $200 out of the ATM and use it to buy $200 worth of chips at a poker game, blackjack table, or slot machine. Pretend that this $200 is your grocery money for the week, and that your goal tonight is to double it so that you can not only buy groceries, but buy a new piece of software that you need for your business. You’re running on steam, and you need this to work.
In this situation, how does it feel to place a $10, or even $20 wager on a single hand? You’re probably nervous, biting your nails, and miserable, hoping that someone doesn’t call your bluff. That’s more than 10% of your money.
What happens if you’re down to $150 after a string of bad bets, and someone raises you to $25. It’s horrifying right? This is your grocery money after all. So you start playing tight, and only play when it’s a sure thing. You might come out with your neck, but just barely, and unless you got lucky, you sure as hell didn’t double your money.
Now, instead of using your $200 of weekly grocery money, imagine that you have $10k in the bank to play with, on top of your three month safety fund. What does it feel like to plop down a few hundred bucks at a table and risk 10% of it on a hand? It’s not bad right?
You’re thinking – “what the hell, why not? It’s only twenty bucks!”
This is what a bankroll can do for you, and it’s why you need to think beyond the daily grind.
With a nice bankroll, you can pay a freelancer to develop that app you’ve always wanted to build.
You can outsource some of your graphic design, even though you are a graphic designer.
You can take risks on new services, and don’t have to sweat the fact that if it fails, then you can’t pay the bills.
Having a bankroll gives you the opportunity to place a $50 wager and not worry about it going poorly, and when you can play at the big boy table like that, then you put yourself in position to make bigger things happen.
Lastly, and most important…a big bankroll gives you the chance to build an even bigger bankroll, and when you do that, it’s very hard to make a wrong move, and your empire is not something you say to get excited, but something you build to have fun.
Build a bankroll, and you can be your own Caesar.