"No decision is ever too small." - Dusty "Leatherass" Schmidt
Until recently, I had often wondered why I have always been tremendous at managing my poker money yet have failed to translate that approach to my off-line finances. Having averaged about $6,000 or more a month or for the past couple of years, I have always been baffled at the fact that I had no money left over after paying my living and recreational costs and yet the debt kept managing to pile up. After reading The Tipping Point by Malcolm Gladwell, this is a mystery no more.
You see, when playing poker, I would always treat every single dollar at stake with care. If someone were to point out to me that I had some minor leak that was costing me $5 a day, that would be completely unacceptable. I've always treated that minor edge with value and I had hoped that I always gave some thought before making that little call or tiny bluff. Truth be told, if you examine the win rates of the absolute best winners at the $1/2 NL stake, you will see that they are winning about $12 per 100 hands, or 3ptBB/100. That's about $9.50 per hour at a full ring table. Some of you might be surprised to find that edge is so small, but what that translates into is that one extra pot they stole or that one small opponent value bet that they failed to pay off.
As for my off-line life: I was sloppy to the extreme. After all, if I don't pay my utility bill on time they only clip me an extra $5. An overdraft fee is $33, but paying that is easier than getting off my fat ass to go deposit some money or asking a friend for a short term loan. Paying late fees on movie rentals is more convenient than driving out of my way to return them. Leaving the lights on in the house at all times probably only costs a few extra bucks a month, so who cares, right? I probably have about a dozen of these careless leaks, and truth be told, they were probably costing me about $20 or so- a DAY! All of this is rather embarrassing in retrospect and I am working to fix them all right now. We need to treat every single dollar like it matters. But there is also something that goes along with that that few people have ever considered...
I read a brilliant passage once in an investment guide. The author wrote that the dollars you save have more value than the dollars you earn. The reason? The dollars we earn are taxed but the ones we save are not. The ones we make might be worth about 75% of that, but we get a 100% ROI on the ones we don't spend. It's like rakeback. For those who are not very high volume players, Poker Stars players are pissing their money away. They should be playing at Cake Poker, where the savvy player can get back 35% of their contribution on top of beating up on shitty competition. Compare that to the lousy 12% or so return that the casual player or aspiring pro will get back at Stars. I tell people about this all the time and the fact that they simply do not care tells me that they do not have the mind set of the professional. They are making the comfortable decision to stay where they are rather than having to go through the trouble of re-depositing at another site. And believe me, I don't give a shit about how great their comp program is. All those pretty gadgets are subsidized by the rake you are giving them and getting a "free" PS3 might seem cool, but you'd still have to hawk it at a discount to pay your car loan.
I often like to tell people that the easiest thing about being a professional poker player is knowing to how win at the game. Your typical pro is by no means a baller; he is more akin to a coupon clipping deal seeker. He is constantly looking for that tiny edge- that 6:5 favorite on a coin-flip. If you are giving away those tiny edges, pretty soon you will be looking at the wrong side of that coin and an empty ewallet account.