Step 10. Bankroll / Money Management

Bankroll management (in Texas Hold’em) and money management (in investing) are the concepts that will keep you alive in the long run.  Unfortunately, this subject is often left until after the details of how to pick stocks or play hands because it is not very exciting.  It is boring because it involves using your discipline to protect your bankroll but without it you will find yourself digging into your pocket and taking from your living expenses to fund your investing or Texas Hold’em game.

The reason for the importance of bankroll / money management is that in Texas Hold’em you will never win all of the time and in investing you will always have losing trades.  Not only that, but there may be prolonged periods where you lose money continuously – even when you are playing or investing well – with a consequent disastrous effect on your bankroll.  The inevitable fluctuations in the results of your Texas Hold’em games and investment decisions mean that it is essential to have a bankroll that is sufficient for the limits that you decide to play.

The reason that learning to preserve your bankroll is so important is because money you don’t lose can buy the same things as money you win.  Furthermore, money that you don’t lose can be kept for the hands and investments that go your way to maximise your returns.