Playing poker professionally can be a great way to earn money. According to a Capitalbay news overview of poker as a profession, top-tier poker pros earn about $250,000 a year on average. The best of the best can generate income in the millions, with some pros earning up to $10 million a year. However, such prosperity is not guaranteed. For pro poker players to succeed economically, they don’t just need to hone their poker prowess — they also need to hone their financial management skills.
Though “professional poker player” sounds like a job title, it has more in common with running a business than it does with employment. As an employee, you will usually have a fixed income, with higher-ups arranging job-related expenses (such as operations and benefits) on your behalf. However, in business and in poker, figuring out your finances is your responsibility. Additionally, your income won’t be certain. It all depends on how well you perform in a given month. To help you manage your finances as a professional poker player, we’ve provided a few tips.
Assess Your Possible Expenses
As mentioned, when playing poker professionally, it’s up to you to figure out how much of your earnings you will put back into your career. Thus, you need to identify the expenses required to keep playing. These may include:
• Buy-ins: Even as a professional, you will be required to hand over an upfront payment to enter poker games.
• Travel: If you’re playing in-person games, you need to account for any travel expenses, such as gas, commuting costs, and plane tickets.
• Accommodations: Players entering tournaments may have to book hotel rooms or other accommodations.
• Internet: If you’re playing online, you can use your poker earnings to reimburse your internet costs.
• Tips: It’s good etiquette to tip your poker dealer.
Once you’ve figured out your operating expenses, you can also decide how much of your earnings you’ll place into investments, or give back to yourself as a personal salary.
Separate Personal and Poker Finances
Again, playing poker is a business, and it’s important to keep business and personal finances separate. If you keep your poker and personal funds intermingled, you may inadvertently spend operational expenses on personal purchases, which may leave you with insufficient funds to keep your business running. Additionally, it’s simply easier to keep track of business expenses when you keep them separate.
As mentioned, one way to do this is to give yourself a personal salary for expenses unrelated to professional poker, such as rent, food, and entertainment. New York-based entrepreneur Melanie Hopkins explains that, when deciding how much to pay yourself, you need to be realistic about what your lifestyle costs. If you pay yourself too little, it may lead to burnout.
Have An Emergency Fund
Just like any business, your income from pro poker may get predictable, but it isn’t fixed. No matter how skilled you are, you’ll inevitably encounter some bad runs. As Poker.org’s guide to becoming a pro poker player explains, if you don’t prepare yourself financially, you’ll lose the funds you need to keep playing. Therefore, to protect yourself from these financial risks, it’s best to set aside enough money for at least 25-30 buy-ins and 3-6 months of living expenses. Some pros even go the extra mile and save up for as much as 40 buy-ins and 6 months of living expenses. That way, if you’re running low on income, you’ll still have enough money to sustain your job and live comfortably.
Set Aside Earnings For Investment
No matter what your profession is, however, it’s always a good idea to place some of your earnings into investments. When you diversify your income streams, you will always have money to fall back on during unexpected circumstances. In the case of poker, you’ll have additional financial protection during bad or slow runs.
Place a percentage of your poker earnings into stocks, bonds, mutual funds, REITs, real estate, or other investments. According to our article entitled The Benefits of Buying Gold as an Investment, one of the best investments is gold. As one of the world’s oldest investments, gold offers high long-term stability, especially since it is highly valued and nearly invulnerable to drastic price fluctuations, even amidst global crises like the COVID-19 pandemic. Given that pro poker income is not fixed, players can benefit from the investment’s extreme reliability.
How much you earn from poker doesn’t just depend on how well you play your cards, it also depends on how well you manage your finances. Assess how much you need to spend on games and how much you need to spend to maintain your lifestyle, then budget accordingly. For additional protection, set aside money for emergencies and investments.