Originally Posted by z4reio
Well, you're missing a huge part of the picture.
First off, I played full-time online and then switched to live play exclusively after Black Friday. I've been playing for a living for almost 11 years now.
If you're a kid making $20 living with your parents, then fine; great job (poker) you got there. $20/hr doing poker, supporting a family (or even just yourself) is not going to cut it long-term. If one expects to succeed long-term at this game, you'd better have your **** together before you make the decision to play for a living. I realize there's a bunch of kids here that can't comprehend thinking 10 years or more down the road, but bear with me.
I pay $400 a month in health insurance premiums for just myself alone. I have no health issues or preexisting conditions. A friend of mine that's around 10 years older than me (self-employed in a different occupation) pays $1,000 a month in premiums with a $5,000 deductible and a $10,000 out-of-pocket max (once coinsurance kicks in) per calendar year. This is a catastrophic health insurance plan that he pays $12,000 a year for (this type of insurance plan for a 20-year-old would cost about $35 a month, to put it into perspective).
I pay 100% of the 15.3% medicare and social security taxes (AKA: self-employment tax). This is a tax, if you have a legit job, that is split with your employer (i.e., you pay 7.65% and your employer pays the other 7.65%).
No one matches IRA contributions, no one pays 75-80% of health insurance premiums, no one splits tax liabilities, no one pays for sick days, and you don't have the option of collecting unemployment benefits during long downswings. As a professional player, you are both the employee and the business owner. As a business owner, you must pick up the slack in those areas and be able to compensate yourself accordingly.
At $20/hr, you can't realistically expect to pay yourself the benefits you would get from a job and pay your bills, invest, etc. The reason why is because money is the tool of your trade, so you need a large fund of idle cash (bankroll + living expenses) doing next to nothing. It's hard to justify that on a $20/hr expectation because you are not guaranteed that $20 each hour like you are at a regular job. You can't compare a $20/hr job to running a business (you need business capital) that earns an average of $20/hr.
This isn't like a live "paycheck-to-paycheck" job even with months of living expenses in reserve. I mean, doing that, and 10 years down the road you still are in the same place. That's fine when you're 20, as most everyone else at that age is bagging groceries, but you'll be well behind the norm in 10+ years. What about 20, 30 or 40 years? You still want to be grinding out an existence?
That's fine if your only option has always been McDonald's, but that's just more of a testament to the fact that you should have obtained an education/trade at some point. Even after having been out of my previous field for several years, I received a phone call from an associate I had worked with in the past to help expand a business of his with an attractive offer. Had that happened right after Stars pulled out, I may have actually considered it. As is, in my new medium, exclusive live play, the time:compensation ratio still favors poker easily.
Once you are set up properly to play for a living, the next is money management. Not bankroll management; money management. Everyone knows x bets/buy-ins is suitable for a player with such and such win rate with a this and that stdv. Instead, the problem I see in card rooms is guys spending their winnings and not considering how much they are actually earning at the tables.
Managing upswings is actually more difficult for most pros than managing downswings. Anyone can see that their bottom line is getting narrower when they are continually getting their nuts kicked in and something has to change (e.g., lifestyle, stakes, etc.), but when you're crushing the world and the money is easy, many people spend, spend, spend and find themselves behind the 8-ball when regression toward the mean kicks in. However, with the right information and proper mindset, this obstacle is very easily avoided.
[This next part is basically a copy/paste of a post I made a few months ago about managing winnings as a professional player, since there's probably some interest in that]
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I run it like a business, because it is a business - it's a sole-proprietor business. I pay myself a wage despite my results at the tables. I pay myself what my overall expectation (EV) is in a game.
Using arbitrary figures, let's say you play $1/$2 NL and your established win rate is 6bb/100. This means that you earn $12 every 100 hands, or $12 / 100 = $0.12 per hand.
Your EV in the game is $0.12 per hand. If you played a 1247 hand session, then you earned, in EV, $149.64. It doesn't matter if you won $1500 or lost $1500 - those are deviations from the mean and have little to do with anything and nothing to do with your actual worth at the table.
This is why broke winning professional players go broke. They spend lavishly during upswings and come up short during downswings because they never actually determined how much they truly are earning (long-term) at the tables and compensate themselves accordingly.
So what you do is decide what percentage of total expected profits (EV) will go toward business capital (depends on a few variables). Say you want to cut 20% to the business and keep 80% of your EV (wage).
Now that 12 cents per hand becomes 9.6 cents per hand; the other 2.4 cents go toward expanding the business (i.e., larger capital = better investment opportunities).
Let's say you played 8274 hands in a week:
8274 * $0.096 = $794.30 to you for your time at the tables
8274 * $0.024 = $198.58 to the business for financing your play (even though it is you staking yourself)
Keep separate business and personal accounts. The business account is not for you to touch and buy a $5,000 Rolex, for example. If you can't pay for that watch out of your own personal bank account, then put more hours in at the tables. See the Full Tilt debacle for what can happen when you commingle business capital with personal finances.
I suffered the longest break-even in my life a few years ago. I had 4 million hands in the bag before that and never had anything close to that stretch nor thought it was even possible. However, I was still paying myself my wage for my time at the tables - for months.
Health insurance premiums, IRA's, etc. disbursements must still be paid out - just like it is at any other corporation that's suffering a downtrend - you must pay your workers for their time. Fortunately, you, as a responsible business owner, didn't overspend when times were good and can afford to keep greasing the wheels when times are tough.
As you can see, if you pay your business 20% (or some other suitable amount) of your profits and never pay yourself above your EV, then you can weather the swings when the time comes and continually expand the business at the same time.
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In regards to the question posed in the subject title, no, I don't regret my decision, but I was very prepared. It wasn't a decision I made lightly. I had ten years prior poker experience before pulling the trigger on doing it full-time, so I knew, more or less, what to expect.
