All Financial Wisdom
Poker and Personal Finance
One of the main differences between an occasional poker player and someone who makes this discipline their main source of income lies in the ability to skillfully manage the raw material of poker: money.
Although the cards determine the individual victories, it is the financial skills that open a player the possibility to stay active for a long time and achieve stable income.
The basic principles of resource management in poker are completely compatible with the management of money in everyday life:
Check your finances before making decisions: The main headaches with regard to the economy are caused by a simple and very common mistake: most people make economic commitments that exceed their income. For poker games and for any other type of investment, you should make a detailed review of the resources available and the unavoidable expenses in the near future. This can be achieved through a simple spreadsheet detailing your cash flow. That instrument is key to knowing how much to risk and when to retire.
Be prepared to win or lose: Dealing with victory is relatively easy, but it requires balance and discipline, because whoever wins once, whether in a game or in a business, your judgement may become clouded and you’ll end up taking unnecessary risks.
Coping with defeat is also a key skill. Both in the game and in business, it’s important to consider what decisions and paths to take when things don’t go as planned. Much of this obviously depends on your risk tolerance, but you should be of the mindset that you are prepared to either win or lose money. In other words, your chips(or assets) will be prepared for the outcome regardless of a win or a loss.
Just because you win more games, doesn’t necessarily mean you won more money. In poker, as in business and other forms of investment, quantity does not always represent quality. That is, a player can win many hands and still not make much money. Conversely, a single business or a single item can greatly increase the income of those with the sense of smell and training is required in order make the right financial decisions. Similarly, small losses may be necessary and even favorable in order for you to learn from your mistakes and achieve long term success.
Take moderate risks: Money does not multiply by itself. Achieving an increase in income always involves taking risks. Starting a business, investing in bonds, stocks or playing poker may be the first steps for a promising economic future. However, it’s important to consider the above tips and, again, ensure that you are well positioned, balanced, and protected from unnecessary risk. The analysis required to assess not only your own position, but that of your competitors is a fundamental business skill. Take a course on game theory if you really want to explore this a bit further.
Poker has a great deal to teach us about throwing ourselves into the arena in search of new opportunities. In the words of Kenny Rogers: You got to know when to hold ’em, And When to Fold ‘Em.”