Don't Call It a Comeback

As I've detailed in previous posts, I was having a very challenging 2011. I say "was" because the second half of the year is turning out to be great. Three things have shaped the rebound.

The first thing is I won a charity poker tournament. The charity proceeds went to a relative of a poker league player that needed a kidney transplant. The top four players, me included, "chopped" the pot. "Chopping" is a poker term for splitting the pot. I made over three times my money. There were 40 players in the tournament. I then went on to win in my league nine days later. I also won a league game a month earlier. I hope my hot streak continues as I'm playing in two more charity tournaments in October and November.

The second thing is that I got a new job. I know what your thinking, "didn't you just get a new job in June after being unemployed for a few months?" Yes. Back in June, I got a job with a defense contractor working on a contract with the Postal Service (USPS). If you watch the news, you know that the USPS is having major financial trouble. Their fiscal year ends September 30th and the contract was up for renewal. I was doubtful since every financial transaction was being scrutinized. The wife and I were concerned if I would be out of a job just a few months after being unemployed for 4+ months earlier in the year. I had other concerns as well. I was using outdated software and there wasn't much work to do. This job was not good for my career. At most it was a stop gap. At the same time, a company I interviewed with back in March contacted me about the same position. I never heard back from them after the March interview. It seems that they were having a hard time finding a senior ColdFusion developer. They went back to review all the resumes they had obtained and contacted me in September to see if I was still interested. The timing couldn't have been more perfect. The position offered me an opportunity to get into object-oriented programming using current technology and software that was new to me. It would be a positive challenge that would be good for my career. I was offered the position and happily accepted. And it turned out to be in the same general area of DC as the USPS job, so my commute would be the same. It was lucrative as well.

The third thing is the most exciting-Jennifer is pregnant! Shock Jr. number two is on the way. She is due May 18. We go from double coverage to man-to-man. Keep up with the family and the coming attraction at the Shock Family Circus blog.

Shuffle Up and Deal

Image via Wikipedia

I started really getting into poker and specifically the Texas hold'em variety of the card game back in 2004. I read some books on how to play and improve my game. I hosted a few games at my house, but quickly learned none of my friends knew how to play. I played a couple cash games in casinos in Reno and Atlantic City. I learned very quickly that cash games are very different from tournament style. I didn't play online because I liked the action of a live game and being able to study my opponents. The World Series of Poker tour was all over the TV, but if I wasn't playing I wasn't watching. I guess I could have learned something by watching the pros, but that didn't dawn on me at the time. I joined a poker club that met Sunday nights at a local bar. A poker club is for those who live where gambling is illegal, which is pretty much everywhere in this country. I had fun in the beginning, but being a stickler for the etiquette of the game, I learned very fast that people play very differently when it's free compared to when money is on the line. Playing in a smoky bar with drunk idiots or with people who didn't know how to play or both wore me down pretty fast. What really did it for me was the fight where the word "divorce" was first uttered by my first wife started at a poker club game because some crusty old douchebag was hitting on her. Seriously-no joke. You play the hand you are dealt (pun intended).

I moved on with my life without poker. I still loved poker, I just didn't go out seeking to play. The passion died. Fast forward a few years. I got remarried and started a family. We joined a great Episcopal church. The Young Family Ministries dad's group has a monthly poker game that I got invited to. I won my first two games. That's all it took to get the fire burning again. I was back baby. I was so motivated that I got my own monthly poker game together with a new group of friends who love to play poker as much as I do. Two games a month didn't satiate my hunger. Like a sign from the heavens, I turned on the boob tube one night and what was on? You guessed it-poker. This time i watched intently, hoping to learn a trick or two from the pros. What I did learn is that as skilled as these poker pros are, you still need lots of luck. With lots of playing, studying and luck, I can do what they do. So I took the plunge and started playing online for free. Online poker is a very different beast which is good because it adds another facet to my game.

Last week I played in my first high stakes ($100 buy-in) game. It was a charity game dubbed "Hold'em for the Cure". Half the buy-in was a donation to the Susan G. Komen for the Cure, the other half went to the prize pool. I was excited. So excited in fact that I was the first one knocked out. On about my fifth or sixth hand I went all in with a full house deuces full of aces. It's hard to beat a boat. But I was beat by a full house sevens full of aces.  He sank my battleship! I then played the role of sore loser as there was no re-buy and you still had to be in the game to purchase the add-on. I stayed for the pizza dinner. After eating and throwing a hissy fit, I quietly left.

So here I am playing and losing lots of poker. I have dreams of becoming a professional poker player. It's my only hobby that if I'm good enough could pay the bills. Like the saying goes "you can't truly know success without failure." Well, I've failed a lot. Hopefully thats a catalyst for my success. Shuffle up and deal.

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Money Tips I Learned from Poker

A repost from my favorite personal finance blog, Bargaineering. It combines two of my hobbies - personal finance and poker. I'm going to print out the article and take it to my monthly poker game to see what the guys think.

Money Tips I Learned from Poker: "

This was a guest post written by my friend John H. about the some money tips he took from the felt and put into his wallet.

When you think of your bankroll, you probably think about how much cash you have in your wallet or how much money you have access to via your debit card that’s not already spoken for by bills. It’s your extra money that you’ll use to put gas in your car this week, go out to eat one night, or for some random purchase like buying a box of Do-Si-Dos® from the Girl Scouts outside your local grocery store.

Lesson 1: Bankroll Management

These things, while individually are minute, eventually add up to “I’m broke.” Instead of looking at your bankroll as your own personal petty cash fund, think of it like poker players do their bankrolls. The average professional poker player will typically only play in cash games for which his bankroll is 300 X the big blind, sometimes up to 500. If you don’t play poker, then this means nothing to you, but a blind is the maximum bet that the game will start out at. You don’t really need to understand this though to apply the strategy to your own life. Think of it as only making purchases that are equal to or less than a certain percentage of your bankroll.

Example 1:

For the sake of not being ridiculous, let’s lessen the number to 30 X your bankroll. Inflation has pushed the price of Girl Scout Cookies up to about $4 per box in most regions of the US. Do you have $120 in your bankroll to cushion the loss of the $4? You want two boxes? You should have at least $240 of extra money in your pocket if you plan on splurging. Only buy the Girl Scout Cookies when your bankroll can afford the blow. When you are running low on cash, you won’t be able to afford 30 X the purchase, and if you’re disciplined, you won’t buy it; thus, not running out of money before your next paycheck.

Example 2:

Another scenario: You have a date. Going out to dinner at a really expensive restaurant like Ruth’s Chris Steakhouse, for two people, would run you at least $100 (more if you plan on ordering martinis). If your bankroll has at least $3,000 (30 X $100) to cushion the loss, then by all means, you can afford it and your wallet won’t suffer too harshly. If you’ve got more like $200 in your pocket, Applebee’s is running a special that includes an appetizer and two entrees for $20 and $2 20 oz. beers—now that’s a date you can afford.

There’s another term for this, it’s “living within your means,” which some people don’t do, especially when they get mixed up with credit cards, but that’s an entirely different story, and it’s been addressed on this blog already. Of course the number “30” is not the exact number for everyone, as there’s no perfect formula that fits every single person when it comes to finances. However, in such tough economic times as these, using restraint and moderation with your money is more than mildly important. Find a number that works for you, but just stick to it. Try it for one month and see how much money you have leftover in your bankroll.

Lesson 2: Saving/Investing

After you’ve practiced bankroll management as described above, you hopefully actually have some money left over above your monthly expenses. Now you can take a percentage of that amount and put it away in your “savings.” In keeping with the poker theme, poker players don’t take all their money with them to the casino (the responsible ones don’t anyway). They put away what their original investment was, plus some, and then continue to build on to their adjusted bankroll.

Example 1:

You’ve managed to pay all of your monthly bills and budget yourself to only spend 30 X your bankroll for an entire month. At the end of the month, you have $250 left over. Take 50% of that and put it away. So you now have a savings of $125, plus another $125 to throw into the pot for the next month’s bankroll. That following month, you’ll essentially have more money to cushion your spending. Stay disciplined, though; this does not mean that you should blow your extra cash on iTunes. Stick to your bankroll management, but you’ll have a little more free reign with what you can spend in relation to your bankroll (i.e., perhaps this week, you can afford Long Horne Steakhouse).

Example 2:

This one is for those who have credit card debt. Take the same example above. Instead of “saving” your extra $125, throw it towards the balance on one of your cards (that is if you have the will power to not use that card, which hopefully if you’ve come this far, you do). Continue whittling it down each month in this way, until it’s gone. Then your extra cash can go to another credit card or to that desperately neglected savings account.

Lesson 3: Expect Pitfalls

As in poker, life throws some things at you sometimes from left field. If you’ve heard of a bad beat in poker, you know that it means that a player, who otherwise had a killer poker hand, got beat by a better hand. Bad beats happen in life too. For instance, if you are a homeowner, you know that things happen to your house that need fixing. If you have kids, they need stuff. If you own a car, no matter how new, reliable, or gas efficient it is, it will eventually need work done to it. These things happen. Such is life. However, with the bankroll management tools explained here, you’ll be prepared for a bad beat.

If a poker player loses his entire bankroll on one bad call, then he’s out. He’s out of chances to risk anything whatsoever. If he is smart, though, he hasn’t lost it all on one hand. He’s been preparing for something like this since he first decided he’d sit down at a poker table and play a session. He may have to move down to smaller limits in order to build his bankroll up (instead of playing at the $25 blind table, he’ll move to the $5 blind table—something closer to his bankroll divided by 300).

Example 1:

You need new tires on your car. This is an expense that is not part of your monthly bills. You must dip into your bankroll and/or savings in order to afford this repair. No problem. If you’ve been following the rules suggested in this article, you have some fluff to your bankroll, especially after a few months like this have gone by. You may be able to take half of the expense from your cushiony savings account and half from your pocket, or 60%-40%, etc. But the key here is that once the expense is taken care of, you must be prepared to “move down to a lower limit table.” Tighten up on your spending again to cushion the blow to your wallet/savings that the tires cost you. Move down to only purchase at the 25 X level for a couple of weeks. You’ll be able to move back up, but you don’t want your quality of life to suffer severely down the road, when you have another unexpected expense come up.

Bankroll management in poker is applicable to personal budgeting tactics. Everything must be considered in terms of the bigger picture. If you don’t have a mental grasp of your spending to earnings ratio, you’ll never be able to establish savings or make investments, or worse yet, survive those inevitable pitfalls of life.

(Photo: jamadams)

Money Tips I Learned from Poker from personal finance blog Bargaineering.com.

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