Is money the root of all evil?
During a networking seminar I recently attended, a very insightful individual raised an intriguing question.
I nodded in the affirmative.
Hailing from a working-class family, I was brought up in a public housing area alongside three sisters. My mother was not employed, and my father's income was barely enough to satisfy our basic needs.
This background ingrained a strong perception of scarcity and a mindset of 'not having enough'. I was surrounded by a significant feeling of deprivation.
That's the reason I indicated my agreement.
While it's common for most individuals to choose a safer route, many others actively seek out the thrill of gambling for real money. play poker for free With this context, it's vital for poker enthusiasts in the community to appreciate the significance of maintaining a sound bankroll. If you decide to gamble, think of your finances as fuel for a vehicle; adequate financing allows you to continue playing, but once you run out, you must stop.
Below are five core pieces of guidance to ensure your gaming journey keeps going smoothly. play poker for money Before diving into playing poker for money, it's crucial to evaluate your personal financial circumstances.
Take a sheet of paper and divide it into three sections.
Where Are You At?
Record every source of income you have, including any passive earnings you might receive from assets.
List all your regular monthly expenses. For variable costs such as dining out or shopping, you'll need to make educated estimates, although you should easily note down fixed monthly bills.
- Income
- Expenses
- The Nest Egg
Income
Subtract your total expenses from your income, and what remains is your savings.
Expenses
If your savings total is negative, that indicates you're spending too much. Robert Kiyosaki, the author of the insightful financial book Rich Dad Poor Dad, stated:
The Nest Egg
"Affluent individuals buy luxuries last, while those who are poor or middle-class tend to buy them first.\"
The Negative
Reevaluate your spending patterns. What can be reduced or eliminated entirely? Generally, individuals with lower incomes struggle with poor spending habits. Identify these habits and commit to changing them.
It's important to note that if you're consistently in the negative each month, you’re effectively living in debt. Engaging in poker with a deficit is unwise. Some folks mistakenly think gambling can resolve their debts, but that’s a flawed perspective.
Using debt as a solution is not a productive approach. Tapping into your savings is not a good fix; it’s merely a shortcut. If you wish to avoid these options, you’ll have to devise more innovative strategies to eliminate your debt. Build a robust financial plan instead of opting for the easy route.
On the other hand, if your savings box holds a positive number, it’s time to explore how to put that surplus to work. Let’s momentarily return to the negative side to face the matter of debt, which will lead us into discussing what I refer to as The Emergency Fund.
Deciding to play poker There’s an unsettling reality about debt; it can entrap you like quicksand, gradually suffocating your financial freedom. Life’s unexpected costs, akin to surprising spices in a dish, can perpetuate the cycle of debt.
The Positive
When appliances fail or your car breaks down unexpectedly, these financial surprises can swiftly accumulate if you lack a reliable financial plan. Thus, establishing an emergency fund is the first step toward freeing yourself from debt.
Goal #1: The Emergency Fund
Your willingness to take risks determines how large your emergency fund should be. As a poker player, you likely have a high tolerance for risk. I typically recommend saving up to cover six months of expenses, but if you're more cautious with money, you might want to aim for a full year.
For instance, I require £1,800 monthly to support my family. Therefore, for six months' worth of savings, I’d need to accumulate a fund of £10,800.
Using this scenario as a guide, my initial goal would be to funnel every extra penny into the emergency fund until it reaches £10,800.
My Example:
Let me emphasize again that if you are in debt, you should refrain from playing poker for money. Instead, channel your passion for poker into building a financial situation that allows for gameplay whenever you desire.
While you're working towards establishing your emergency fund, it’s important to only pay the minimum on any debt you have. After reaching your emergency fund target, focus on aggressively paying down your debt.
Goal #2: Pay Off Debt
Debt usually manifests as credit card balances and loans. Always prioritize paying off the debt with the highest interest first, then move down the list of obligations.
Credit Card Debt - £3,000 (4% interest) - Minimum payment £25
Credit Card Debt - £15,000 (0% interest) - Minimum payment £75
Example:
- In the case above, you’d be required to pay a total of £250 monthly just to cover the minimums. Any extra funds in your savings should be utilized to pay down debt (C), as it has the highest monthly interest payment of £300.
- Once you’ve paid off debt (C), channel the £250 monthly and all remaining cash towards the next highest interest debt (A) with £120 interest. Once this is settled, move to the next in line, (B), and repeat the strategy.
- Loan - £15,000 - (2% interest) - Min payment £150
If an emergency arises during this repayment strategy, withdraw from your emergency fund. Once your emergency fund drops below £10,800, go back to the minimum payments on your debts and redirect any surplus back into the emergency fund until it is fully restored. Then resume the debt repayment plan.
Eliminate the word ‘can’t’ from your vocabulary. Robert Kiyosaki elaborated in Rich Dad Poor Dad:
"If you consistently spend every penny you earn, then an increase in income will likely lead to an increase in spending too.\"
What if I Can't Pay Off my Debt?
Before making any additional purchases, you need to shift your mindset. Otherwise, it doesn't matter how much your income increases, you'll continue to find ways to spend it away.
"If you plan to construct the Empire State Building,\" Kiyosaki said, \"the first step is to dig deep and lay a solid foundation.\"
Transforming your mindset, securing your financial base, building an emergency fund, and eliminating debt are all critical components of crafting a stable financial foundation.
If you're still wrestling with self-doubt, try a simple exercise I learned from Vicki Robin in her compelling book Your Money or Your Life. Jot down all the money that has come and gone through your hands over your lifetime (salaries, gifts, contests). During my mid-thirties, I realized that I had earned over a million pounds but had no tangible assets to show for it. This exercise helped reinforce my confidence that I could generate a million pounds again.
"What their education lacks is not the ability to earn money, but the wisdom of how to spend it wisely,\" Kiyosaki noted. "It’s called financial intelligence—understanding what to do with your earnings, safeguarding it, and ensuring it works hard for you.\"
If you find yourself free from debt, it’s time to move on to managing the surplus in your savings.
Many individuals earn, pay their bills, and then slip back into debt due to a lack of leftover funds for their necessities. This kind of living is a lazy pattern fostered by the easy access to credit in our modern environment.
The Positive Nest Egg Process
"Thinking is the most demanding task on the planet. That’s why so few engage in it,\" remarked Henry Ford.
Goal #3: Pay Yourself First
In George S. Clasen’s enchanting book The Richest Man in Babylon, he describes The Five Laws of Gold.
"Gold willingly and abundantly comes to any person who saves at least one-tenth of their earnings to build a secure future for themselves and their family.\"
This guideline indicates that upon receiving your income, you should instantly reserve at least 10% of your gross earnings for the long-term safety and well-being of your family.
The First Law of Gold
An efficient way to achieve this is through automation—either request your employer or financial institution to facilitate it for you. As a self-employed individual, I make sure to allocate this as soon as I receive payment through online banking.
Many professional poker players overlook the First Law of Gold, believing that reinvesting their funds in improving skills offers a superior return. Only a select few can gain substantial benefits this way.
Once you’ve stashed away 10% for savings, you’ll need to determine the cash you have available for poker.
If you're single, you can set whatever limit you prefer depending on your priorities. If you value playing poker more than buying new clothes or dining out, allocate more funds for gaming. The key is to avoid fixating on a specific figure; keep experimenting until you discover a suitable amount.
Goal #4: Create a Poker Fund
In a relationship, this task becomes a bit more complex, yet it's even more crucial to ensure that the amount allocated for poker is appropriate.
Poker is a challenging game where you can incur losses even with good gameplay. This reality is hard to grasp unless you participate in the game yourself. You want to avoid adding pressure on your relationship by overextending your poker expenditures. Establishing a dedicated poker fund, separate from your household finances, can create a clear boundary between your own funds and the family budget.
After you establish your poker fund, the amount you’ve set aside, alongside your risk tolerance, will dictate the stakes you can comfortably play at. There’s a wealth of resources available that offer guidance on what percentage of your bankroll should be in play at any given moment. Engage with this material, and then set goals that resonate with you, adjusting them as needed based on your progress or shifts in your life aspirations.
All these smart financial management tactics mean little without the ability to keep your ego in check. As Bilbo Baggins famously voiced:
Understanding how to handle your poker finances is crucial for any player to prevent financial ruin. Discover the top 5 key principles of managing your poker bankroll.
Goal #5: Control Pride and Ego
5 Key Principles of Effective Poker Bankroll Management
The 5 Core Principles for Managing Your Poker Bankroll
5 Key Rules for Managing Your Poker Bankroll Effectively
At a Network Marketing seminar I attended, a very insightful individual raised this thought-provoking question.
I was raised in a working-class environment on a public housing estate, sharing my childhood with three sisters. My mother was a homemaker, and my father struggled to bring home enough money to provide for our basic needs.
This background fostered a mindset focused on scarcity and the feeling of never having enough. Throughout my upbringing, I was immersed in a strong atmosphere of deprivation.
Money is not the root of all evil.
You are the root of all evil.
That's why I agreed without hesitation.
While it's true that a majority of individuals choose to gamble; there exists a considerable number of people who thrive on the excitement that comes with wagering real money.
Given this reality, it’s critical for players within the poker community to grasp the significance of effective bankroll management. If you decide to gamble, think of your finances as fuel for a vehicle. You can keep the journey going as long as you have fuel, but once it's depleted, you're stuck.
