[Special shout-out to J. Money for letting me bring you guys today’s guest post. While playing poker semi-professionally for nearly 5 years (while I should have been studying) I learned a ton about money – a lot of which is still applicable to non-poker players. Hope you guys enjoy my story!]
Given the stigma around gambling, it’s pretty easy to see why people give me the side-eye whenever I say playing poker was one of the smartest decisions I’ve ever made.
For the longest time I was never really comfortable even talking about it. It was disheartening to see the game I enjoyed so heavily criticized by so many people.
During a 5 year run from 2006-2011 I was able to amass over six-figures in earnings by grinding cash games online (grinding is a slang poker term used to describe players who use risk-averse methods to churn out a slow, steady profit).
Not bad for a kid trying to double as a college student!
If it weren’t for one fateful day in April of 2011 (while still in college at Virginia Tech), I’d probably be off playing poker professionally somewhere outside of the United States – but more on that later.
And while the income I was able to earn was a definite perk, it’s more what I learned about money while playing poker that will benefit me in the long run. From acquiring extreme discipline, to learning to respect money, to having a better awareness of my own health, playing online poker for those few years highlighted personal strengths that I’ll forever hold on to.
Most People Just Don’t Get Poker
I never really understood why people constantly lumped Texas Holdem (the form of poker most of you are accustomed to seeing on TV) in with gambling.
“How can they not understand that poker and gambling are nothing alike?,” I’d constantly ask myself.
I guess from the outside it makes sense. You get dealt cards. You shove money in a pot. You cringe when the card you’re looking for never comes. You lie (bluff) when you missed said card.
To the casual observer, that is gambling. You live and die (and win and lose) based on deceit and luck.
Experienced players know, however, that that perception couldn’t be further from the truth…it would be nothing to me to lose a $1,050.00 pot knowing I went in with 16 outs and 2 cards to come on a semi-bluff.
“But Ben, you just lost $457 in one hand. You didn’t even have a pair,” friends would say, totally bewildered.
“Yeah, I know. It happens,” as I sat there thinking “they’ll never get it even if I try to explain it.”
The casual observer just wouldn’t get how pot, implied and reverse implied odds, along with fold equity can all tilt the expected value of a hand into a marginal winner.
A +6.98% EV winner. But hey, that beats slots, right?
Also literally every single other casino game.
It makes me want to cringe every time someone sits down at a game knowing (or not knowing) the expected value (EV) of each and every single hand they play ranges from -0.5% to -27.0% (low house edge games include Baccarat and Blackjack, to Roulette, all the way to Keno on the high side).
You’re placing a bet where a house edge exists, for the chance to win some amount of money. Over millions of hands, you’re going to lose. Even with perfect strategy. Insanity.
Poker players live and die to make those +6.98% (and much smaller) margin decisions time and time again. They obsess over it. At least the good ones anyways.
This isn’t to start a war with those who enjoy table games. To the contrary, opportunity-cost would suggest there is an amount within your budget you can lose and still be allowed to have fun. It is merely to highlight just how extreme someone like me can be when it comes to extracting small money wins time and time again.
You see, poker is unlike every other casino game. While such a house edge still exists in poker (rake), it is singularly one of the only games where a player’s skill has the ability to overcome the house edge over millions of iterations – rule variations aside.
How It All Started
Televised Poker, Texas Hold’em specifically, exploded in the early 2000’s. The mainstream media prominently displayed the WSOP (World Series of Poker) and other high-roller tournaments in prime-time television and viewers couldn’t get enough of it.
That same explosion occurred online as well. Players flocked to the digital felt after a relative poker novice, Chris Moneymaker, won $2,500,000 in his first live poker appearance in 2003. Yeah, that’s 2.5 million dollars on his first try. Must be nice.
“That could be me”, or so a lot of people thought.
Not me, though.
I couldn’t care less about televised poker. I didn’t know a single professional, and had no desire to learn about them.
I was simply tired of losing my $5.00. The $5.00 I would have to spend to play at home with my friends while we were all still in high school. Seriously, I lost like 20 times in a row. The phrase, “You’re always wrong” was so heavily associated with my poker prowess that I could barely stand it.
But I loved playing. And how awesome it was that I could play online, when my friends weren’t around, for that same $5.00!
And So It Went…
For the better part of 5 years I played poker online. It was during that time I realized that learning to play poker was harder than mastering any college class I had ever taken.
Organic chemistry. Physics. A vast array of economics classes.
All a joke. Seriously. Learning the various playing styles, poker theory, and the math behind optimal play made those classes look juvenile.
But that was the part that I found addicting. Just how complex something that seemed so simple, really could be.
I didn’t have time to play large tournaments, some of which can last over 20 hours, but the allure of making money while killing time between classes was too good to pass up (never mind studying).
Cash games provided just that opportunity. You could sit down on multiple tables in just minutes and play several thousand hands in less than an hour.
You wouldn’t believe the bizarre looks I would get at Starbucks when someone would try to sneak a peek over my shoulder as I frantically commandeered 24 open poker tables on my laptop! It never ceased to blow their mind how one could know what was going on in 24 different poker games all at once.
But quick wit, a general understanding of technology (Poker Heads Up Displays for those of you that are familiar) and a strong ability to conduct quick math allowed me to do just that.
Eking out those small marginal wins over and over and over again, millions of times in fact, helped me earn money in a way I never thought possible.
I was paying my own way, and the profit was enough to pay off the over $100,000 in school loans I needed to take out to fund my education.
Good enough for me, I thought. I could get used to this.
And Then It Was All Gone
Consistently cashing out my earnings to pay for school left my “bankroll” on life support for most of my poker career. It prevented me from taking shots at the games highest levels (where you needed the ability to cash flow bigger swings), but I didn’t care.
I was making nearly $100/hr mashing buttons, doing the same thing over and over.
I was consistently playing with sub-optimal bankroll management (in terms of adequate buy-ins available) but my basic skill level allowed me to get away with it.
But on April 15th 2011, everything changed and none of us saw it coming.
Internet poker as we knew it came crumbling down. The Department of Justice had slapped the top honchos of multiple poker websites with what amounted to money laundering charges, and those websites in turn closed off all access to US facing customers.
I got one last check from PokerStars for just shy of $10,000, and that was the end of it.
The DOJ later clarified in December of that same year that playing online poker for money was not illegal, but the damage had already been done. Online poker in the United States had come to a screeching halt for the time being.
That stark reality turned my little money making operation into my own personal heap of ruble. I immediately needed to focus on finishing college, and all of a sudden I needed a “real” job.
What Poker Taught Me About Life and Money
When it was all said and done, I had ended up making almost exactly what I had put in (to school).
Just over $112,000 in loans – just under $112,000 in poker profit. And that’s after paying taxes.
It was a huge burden lifted off my shoulders. One I’ll forever be thankful for. Aside from finishing up payments on my recent car purchase, I’m currently debt free.
There are a lot of lessons here though, that will benefit anyone regardless of their love (or hate) of poker.
#1. You have to be extremely disciplined
Like “NNNobodYYY” shared in J’s Confessions of an Online Poker Player here years ago, playing poker is mentally exhausting. So too is being disciplined with your money. You constantly have to make decisions with no one around to hold you accountable.
You overspend on things you wanted, but didn’t really need. You buy things for people because you truly enjoy the feeling it brings when you see that look on their face, but you can’t really afford it.
If you’re one of these people, try seeking out an extra form of accountability. With poker I’d publicly post big hands I had lost and seek feedback from others. I’d post earnings/losses from sessions in full transparency – it helped because I wanted to be proud of the decisions I made at the table.
J. Money sought out that same transparency when he created Budgets Are Sexy and it has allowed him to document his net worth every month for everyone to see. Others, maybe even you, seek financial apps to help track your own finances down to the penny, such as Personal Capital – a tool I also highly recommend. (Related: Why I Use Personal Capital Almost Every Single Day – A Real Life Review)
Try talking to others about money. Surround yourself with people that have good money habits and who don’t pressure you into making unwise spending choices. Find a good role model and learn from them!
#2. Every little bit counts
In poker, I literally obsessed over making the most +EV decision at all times (positive expected value or outcome of a situation). That has carried over to my daily spending habits in a huge way.
I cannot stand the thought of wasting money, and it’s a feeling I hope never goes away.
I’m not obsessed with minimalism and I don’t even coupon or any of that stuff, but I do have a strong aversion to making decisions that I know are not in my financial best interest. It’s that sort of attitude, perhaps ironically, that allows me to save for the purchases in life that I do enjoy (e.g. vacationing and/or stuff for my car- my other guilty pleasure).
To make every little bit count, start by reducing frivolous spending in your routine and make your hard earned dollars go further. Even something as simple as dumping your extra change in a jar at the end of the day adds up nicely! It’s how I actually paid for my last cruise. (You can also be lazy these days, and have automated robots save or invest your spare change away as you go about your business too – whatever it takes)
#3. Being healthy matters
Sitting at a poker table, either in person or online, for long periods of time is extremely unhealthy. Your physical state directly correlates to your mental ability.
Even the best poker players experience intense periods of stress. So too do people with poor spending habits!
- Digestive problems
- Heart disease
- Sleep problems
- Weight gain
- Memory and concentration impairment
Not too good.
Fortunately, my love for poker also extended to the gym. It helped keep me awake and mentally sharp (think endorphins) while allowing me to withstand the physical “demands” of having to sit in one place for stupidly long periods of time.
By practicing good money habits you eliminate a stress point in your life. Your body will thank you for it. As will your wallet. Hospital bills and doctor visits are incredibly expensive – why not avoid them all together? Preventive maintenance is the best medicine.
#4. You have to respect your money
I’m not here to guilt you into not spending. Okay, well maybe I’m here a little bit to guilt you into not spending.
But really, not everyone is in a position to spend freely without a care in the world. Prioritize what is important to you and cut out what isn’t necessary. Spend where it matters – save where it makes sense to save. If you could salvage $57.31/month by cutting out a Caramel Macchiato every 3 days then do it. If you’re not making ends meet each month it is this sort of sacrifice that could put you over the top. Little, repetitive purchases like this really cut into your bottom line without you even noticing it.
Look past the $40.00 tank of gas. Look past the $35.00 water bill. What are you spending less than $10.00 on? Those are the purchases that will be the death of you because you barely even notice them. You’re shooting yourself in the foot without even realizing it.
#5. Don’t put all your eggs in one basket
Ah yes, the hardest lesson of all. You don’t put all your eggs in one basket. You just don’t do it.
I almost made the decision to quit school and play poker full time. Now that would have been a sick beat. Could I have made it post April 2011…? Maybe. I’ll likely never know, and that’s okay.
Your financial life shouldn’t be any different.
Take on risk where it makes sense to take on risk, but don’t go chasing after huge paydays.
- Should you take on high-risk investments when you’re still in debt? Probably not.
- Should you burn through thousands a year on scratch-off tickets. Nope.
- Should you spend money freely banking on your tax-return coming soon? Negative.
The growth of credit has made it easier than ever to spend now, worry about it later. And that’s a terrifying habit to get into.
A scary fact of life is that you don’t always know what’s going to happen.
But that’s okay. Be smart. Be prepared. Have an emergency fund for when things get tight, and don’t always assume that the money will always be there. Tilt the odds!
Outside of his recreational poker playing activities, Ben writes for the finance blogs Breaking the One Percent and VTX Capital. When he’s not busy at the gym or getting yelled at on the job (registered nurse), he enjoys sharing with others on how to make and save more money.
Killer resources and apps:
- Best Budget Templates & Spreadsheets (FREE)— The best free budget templates from around the community! Including the ones I use :)
- Personal Capital* (FREE) — A great app to track your investments and net worth. You can see an in-depth review we did here from a millionaire who checks it daily 😂
- You Need a Budget (YNAB)* (FREE TRIAL, then $14.99/mo or $98.99/year) — One of the BEST budgeting methods in the space, with new users saving $600 on avg their first two months, and more than $6,000 over their first year! Check out my friend Vic’s review of YNAB here that went on to completely change his finances 💪
- Digit (FREE 6 mo. Trial, then $5/mo) — This is one of my favorite apps for automatically saving money, and I even came on board as an advisor I believed in them so much! You can see my full review on Digit here.
- Acorns* ($3-$5/mo) – Similar to Digit, this app helps you automatically INVEST money by rounding up all your transactions to the nearest dollar and then investing it right away for you. My full review of Acorns can be found here.
- Honey (FREE) — By far my favorite coupon service out there! Click the Honey button any time you're about to buy something online, and BOOM - any discounts it finds will be automatically applied at checkout. You can see my write up on them here.
- Credit Karma* (FREE) — An easy way to check and monitor your credit score AND report! See my full review of these guys here.
- My Favorite Blogs + Books < -- Click here to see all my other recommendations!