Bankroll management: Opening rant

As a relative minnow in the poker pond, it boggles my mind to hear tales/rumours about high-profile pros like Mike Matusow and T.J. Cloutier going broke.
Such stories are incredibly common – the phenomenon is the product of the challenging variance of poker, and an inability on the part of individuals to effectively manage their bankroll. Case in point: Jean-Robert Bellande (pictured above). The former Survivor contestant’s brutally honest tracking of his bankroll swings has earned him quite a following on Twitter. His handle is @BrokeLivingJRB, which offers a hint at his loosey-goosey financial philosophy.
On the face of it, winning at poker seems much tougher and more intellectually challenging than managing the spoils of victory. But it’s the opinion of many winning players that bankroll management is as important, if not moreso, than mastery of the actual game itself.
So . . . If poker is a skill game, and I believe it is, shouldn’t there be a corresponding way to skillfully manage a bankroll?
I say yes. My basic bankroll philosophy is hardly exclusive to poker. It’s essentially the same conservative style of money management that my parents drilled into me as a kid. Basically, it amounts to “Don’t spend money you don’t have.”
It sounds obvious, but our society’s relentless refusal to apply common sense and fiscal prudence is at the root of the current economic downturn. Folks in developed nations tend to have a sense of entitlement. If they can’t afford something, they simply put it on their credit card, expand their line of credit, or borrow against the equity in their house. We have a standard of living we envision and believe we deserve, and we’re determined to get there by any means necessary.
That last paragraph may have been a bit of a digression from the poker-bankroll theme of this post, but I tend to believe that society’s warped financial mentality can’t help but grease the skids for poker players on the way to the poorhouse.
I realize I’m rambling a little bit. So I’ll break this bankroll rant into three parts. Tomorrow I’ll tell the story of how I built my bankroll, and offer some general guidelines for poker players the following day.
One big qualifier: It’s probably true that it’s easier for a recreational player like myself to manage a bankroll. I’m not dealing in massive sums. But I feel like I’ve got some solid bankroll fundamentals, so take ‘em for what they’re worth.

Spending my bankroll, in more ways than one

When a winning poker player finds creative non-poker-related ways to nuke his/her bankroll, it's said that player has "a leak." There are plenty of stories floating around concerning famous poker stars who blow through their profits in record time. T.J. Cloutier, for instance, apparently pawned one of his World Series of Poker bracelets last year after (allegedly) bleeding off untold thousands of dollars the craps tables. Crazy to think that someone so proficient at managing a stack of tournament chips could be so poor at managing a bankroll.
I don't have a compulsive, degenerate leak like that. My leak is more like a slow drip. Every once in a while - about once a year - I talk myself into some new poker gear. And since there's no way I could justify spending our household finances on such a frivolity, I dip into the poker bankroll.

The latest expenditure was a sweet new poker table, courtesy of a local B.C. supplier - pokerchipsets.ca out of Maple Ridge. They have some awesome stuff, and I picked up a luscious blue-felted table just in time for the September edition of the monthly poker league I run.
Unfortunately, my stay on the new table was all too brief. After treading water for over an hour, I made a total donkey play, getting my 30xBB stack into the middle on a K64 flop. With six players at the table, I'd raised under the gun with KQ. I had two callers, including a monster-stacked player to my left who had been overbetting the pot all night long when he made huge hands. I felt I probably had the best hand on the flop, and elected to slowplay. Mr. Overbettor made it 3000 to go, which was a little bit more than half my stack. The other player folded, and after a couple seconds' thought, I shipped it. He called and turned over AK - a hand that surprised me, because I would have assumed an aggressive player such as he would have reraised with that hand preflop.
But that's no excuse. I'd watched him overbet with big hands on two prior occasions - it was clearly his M.O. for the evening - but I refused to believe him because he's very capable of making big moves and an overbet reeks so much of a bluff. Additionally, if I'd bet the flop, I could have gotten away if he'd raised. Even after slowplaying, with 30 big blinds in my stack, I could/should have been able to get away after seeing his previous showdown hands.
Terrible play by me. Lesson learned . . . I hope.
Online, I managed to lose back all of my early September profits with some rather inattentive and impatient play. On the bright side, I'm still breaking even this month, but after leaking off some cash buying the table, the bankroll is a fair bit thinner.
Bankroll = $4,700