I've been a successful poker player for more than seven years. There are a lot of great poker players out there, many of them reading my blog, I can tell from the ones I've spoken to. Being a great poker player doesn't automatically include being a great businessman or being capable of working for yourself. A lot of my friends are having some success right now, and I am sure that it will continue, because these are very good players. The only thing holding some of you guys back from being really successful is approaching poker like a business. This thread is a must-read for successful players. I talk about keeping cash ledgers, managing your time, staying upbeat, happy, physically fit, and sociable, and how to pay Uncle Sam your taxes.
Your Business Plan
Writing a business plan for yourself is one of the easiest things in the world to do. Your business plan does not need to be a formal document, it just needs to be a reminder to you about what your goals are. There are a couple of things to note. You are never allowed to discuss $$$ in a the business plan. Winrate goals, game choices, or how much money you need to make do not belong in a business plan. Deal with them in a monthly journal or something.A Sample Business Plan:
- Never Engage In Negative-EV Situations in or around Poker
Everyone makes mistakes, but making them intentionally is unprofessional.
- Keep Accurate Records
If you are a losing poker player, accurate records are the only way you will realize you need to change some things. If you are a winning poker player, you will get in hot water from the IRS if your records are sloppy. If your time is worth too much, keeping accurate records requires hiring an accountant to handle receipts, billing, and tax season.
- Money Management
I will cash out my winnings bi-monthly/monthly. I will increase my poker bankroll by 20% after every cashout. Of the other 80%, 40% goes into taxable income/savings accounts, and 40% goes to my checking account. If you have a losing month(s), continue to collect a minimum salary. You notice, you can only take home about 40% of what you cash out. You need to gross 2.5x your minimum living wage. It's not pretty, but that's the way it is.
Print that out and stick it in a notebook. Buy a cash ledger and put that in the notebook as well. Any time you play poker, or at the end of every day playing online, record the date, record the results. Use this ledger to keep track of when you cash out and how much and where the money goes to. Remember, only 40% of the money you cash out can go to your checking account or pay off your rent and credit cards. You need to send as much of your income as you can into your bankroll.
Protecting Your Bankroll
Your bankroll is the tool that you use to extract money from people at a table playing poker. It always hurts more to lose half your bankroll than you would gain from doubling it. Be safe. Lock down your poker accounts and your bankrolls with secure passwords. Even if you are from America, where it is getting harder to wire money into online sites, I strongly recommend keeping as much of your bankroll as you can off-site. Typically, I've been able to find a transaction method that would get money into or out of my account within three or five days. Find a fast and effective way to transfer money, even if that means paying a small fee. Do not ever transfer money directly from the poker site to your personal bank account. Use a separate bank account for all business-related transactions. Some banks are hostile to internet gambling, some don't mind a bit. Find a bank or credit union that keeps their nose out of your business.
Taxes
Since it's the middle of the year, I'm not going to get into this, but it's important to consider. Before next tax season, I'll cover or review the book How to Turn Your Poker Playing into a Business: Knowing What to Deduct to Improve Your Odds With the IRS, my favorite poker tax book. Other articles have priority, so, you'll have to wait for the review. Let me just say, it's the most accurate tax text for poker players, it covers live and internet play, and it comes recommended from tax professionals.I know you guys like reading my articles, and I would really appreciate it if you would post it on a forum if you really enjoy it.
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