Risk and ROI

[floyd_gehrig]

I realised that winning enough money at poker at an equal rate to the average hourly wage is foolish, considering that you're putting yourself at greater risk for the same amount of money. At what ROI do you need to win to justify the risk in poker as a source of income?

[taipan168]

Hi and welcome to FTR, it's good to have you here.

I'm not sure that I understand your question, but I'll try to give it a shot. It is certainly not foolish to aim to try to earn as much, or possibly even much more, from poker as the average hourly wage. This is not really a question of ROI, it's a question of playing with a sufficient bankroll to ensure that your chance of going busto is minimised. As you observe, poker is a risky game because no matter how well you play, you will certainly experience variance, both positive and negative. The key to minimising the risk in poker is, I stress, to have a sufficient poker bankroll that it is very unlikely that a bad run will send you broke.

The other thing about having a sufficient and separate bankroll is that it allows you to divorce the money from the decision making. There are quite a few posters on these forums who could not afford to spend $300 on a flash dinner, but if they drop that on a hand in poker after taking a bad beat it's like, next hand pls.

Hope that helped!

[floyd_gehrig]

Thanks for your answer, taipan. I'll try to elaborate my thoughts. Supposing you were had two options, either accepting a job at $20/hr, or playing poker and expecting to win $20/hr. Which would be the better option?

IMO, the better option would be choosing the job. Even though you'd be earning the same, the risk of losing money while working is extremely low, unlike poker. So what would be an appropriate amount to earn to justify the risk in playing poker for profit? I suppose I'm asking because ATM I'm only winning $3/hr at $10NL and tried moving up to $25NL to increase my turnover but got burnt. But going back to $3/hr is a very low ROI especially considering the time spent. So at this point I'm trying to decide whether poker is worthwhile as an income source or just a hobby. I'm also trying to get an insight on those players who earn an average wage from poker, and why they persist. It seems to me that you have to be the cream of the crop to make a living off poker, considering that the majority of players must lose.

[shazbox]

The $20/hour that you could make from playing poker would have to factor in the losing times as well as the winning times. At the job, you make a steady rate no matter what. In poker, you could be losing $100 one hours, but making 300 the next. In the long run the winning and losing could average out to $20 dollars an hour. So really there is risk of losing money, but hopefully a more likely chance that you will win more money. Having a sufficient bankroll reduces the risk because it allows you to get through the down swings. As long as you are a winning player, the risk is quite low if your bankroll is sufficient in size.

And really, you don't have to be the cream of the crop to make money, you just have to be better than most. That isn't too hard seeing as how a lot of people are there to have fun and gamble.

[daven]

Supposing you were had two options, either accepting a job at $20/hr, or playing poker and expecting to win $20/hr. Which would be the better option?

ok. Some thoughts.
* If you keep getting better at poker, your hourly rate can increase to a lot more than $20
* The freedom to choose your hours, play from home, etc
* The opportunity cost of career development lost, working looks better in a resume than playing poker does
* How much security do you need? Think commitments, personality, etc.
* The likelihood that the same (or similar) job opportunity will be available again a few months down the road

And another question.
Suppose you had two options. Continue raking it in as a contract business analyst (won't bother talking about hourly rates - think comfortable and check out a jobs-board if you care) or taking a three month break after your next contract finishes to attempt going pro. Secure in the knowledge that:
1) you will almost certainly never make as much money from poker as from contracting
2) taking a three month break between contracts won't harm career prospects in any form, you know from experience that even up to one year is fine.
Then what?

[Chopper]

your question really boils down to: What do YOU want to do for a living? and, i think you've already stated your choice. and, thats fine....FOR YOU.

but, many of us...
- dont like bosses telling us what to do
- love not having to clock-in and out
- enjoy more "time off" than any job would allow
- take our kids to school
- make more than $20/hr
- pay less in taxes, due to deductions, than a W2 employee of the same income
- have found poker is OUR passion
...i could go on and on

but, the main thing is: everbody needs to do what keeps food on the table.

there are sacrifices poker players make. there are sacrifices people with jobs make. as long as you are ok with the trade offs, you do whatever it is that brings you the most pleasure or security. plain and simple.

however, i dont know how to convert ROI to hourly wage. but, you can take the money you make in tourneys, divide it by the hours you have played, and get an hourly for your time.

if someone could find Daniel Negreanu's old "$85/hr article," it seems this would be a perfect spot for the link.

btw, welcome aboard. hope you get as much from here as we have.

[Ash256]

http://www.flopturnriver.com/phpBB2/...ed-t61800.html

That's pretty much everything everyone's going to say on the matter.

[Lukie]

Thanks for your answer, taipan. I'll try to elaborate my thoughts. Supposing you were had two options, either accepting a job at $20/hr, or playing poker and expecting to win $20/hr. Which would be the better option?

IMO, the better option would be choosing the job. Even though you'd be earning the same, the risk of losing money while working is extremely low, unlike poker. So what would be an appropriate amount to earn to justify the risk in playing poker for profit? I suppose I'm asking because ATM I'm only winning $3/hr at $10NL and tried moving up to $25NL to increase my turnover but got burnt. But going back to $3/hr is a very low ROI especially considering the time spent. So at this point I'm trying to decide whether poker is worthwhile as an income source or just a hobby. I'm also trying to get an insight on those players who earn an average wage from poker, and why they persist. It seems to me that you have to be the cream of the crop to make a living off poker, considering that the majority of players must lose.

trust me, if you are playing nl10 and making $3/hr, keep it as a hobby. if you can make a few bucks on the side, even better. Consider it an income source (as in the majority or entirety of your income) when you are playing (and beating) much higher stakes. you also have to plan for the games to continue to get tougher...