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Old 05-02-2016, 01:27 AM   #14426
WereBeer
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re: Winrates, bankrolls, and finances

Quote:
Originally Posted by feel wrath View Post
That seems crazy - can you explain?

In the land of the kangaroo, 100k at poker is equivalent to a 140ishk real job because we don't have to pay tax on poker income
Just looking at federal income tax, this is correct.

However, that 140K real job comes with a bunch of ancillary benefits you don't get with poker, such as zero variance, paid leave, 9.5% superannuation and the option of just phoning it sometimes and still getting paid.

Not exactly sure how to quantify all those factors into dollar terms but 140K real job >>> 100K poker pro.

EDIT

9.5% super is $13,300.

6.5 weeks paid leave (public holidays + 20 days) = $17,500.

1 week paid sick leave = $2692

So that's $33,492 before we even touch variance. I'd put the value of the benefits at considerably exceeding the cost of income tax TBH.

Last edited by WereBeer; 05-02-2016 at 01:38 AM.
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Old 05-02-2016, 03:18 AM   #14427
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re: Winrates, bankrolls, and finances

Quote:
Originally Posted by WereBeer View Post
Just looking at federal income tax, this is correct.

However, that 140K real job comes with a bunch of ancillary benefits you don't get with poker, such as zero variance, paid leave, 9.5% superannuation and the option of just phoning it sometimes and still getting paid.

Not exactly sure how to quantify all those factors into dollar terms but 140K real job >>> 100K poker pro.

EDIT

9.5% super is $13,300.

6.5 weeks paid leave (public holidays + 20 days) = $17,500.

1 week paid sick leave = $2692

So that's $33,492 before we even touch variance. I'd put the value of the benefits at considerably exceeding the cost of income tax TBH.
my 140 was inc super, but w/e. and the tax burden on $140k gross income is 39kish iirc, but I agree with most of your post. think you're over on public holidays slightly - generally it's 9 per year of which only 8 are guaranteed (eg Anzac Day doesn't count if the day falls on a weekend) but of course those things are included. It's also, harder to get a mortgage/car loan etc if you aren't paying tax/proving income.

you've also missed the biggest $$ and life reason not to quit your job and turn pro too - if you have a real paying day job, you still get to enjoy poker as a profitable and enjoyable hobby at say, 10-15 hours a week, during the most profitable times and days. If we use the $50ph figure being thrown around = $25k tax free, on top of your $100k salary or w/e.

but the point remains - there's a huge disparity between the take home on a 100k poker win here and the US.
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Old 05-02-2016, 02:20 PM   #14428
Rochefort8
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re: Winrates, bankrolls, and finances

For a real life look,
I just got my 2015 benefits report, it looks like this:

Pension - 16611.94
401k match - 3313.26
Medical - 11297.4
Long term disability- 849.73
Life insurance - 634.8
EAP - 17.64
Employer paid SS- 7347.0
Employer paid medicare- 1956.44
Workers comp coverage - 473.56
Unemployment ins - 634.11
Total - 43139.88

My company includes my 4 weeks of vacation pay and sick pay in normal compensation. So those included brings me well over 50K.

To each his own, but the biggest problem with poker as sole income in the US is that if you claim it as income your gonna get killed on taxes and if you don't you miss out on the best cash flow generating investments out there like real estate due to having no credit/income. I use it as a profitable hobby to buy expensive dinners, take vacations, whatever.
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Old 05-02-2016, 02:36 PM   #14429
Duke0424
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re: Winrates, bankrolls, and finances

Unless theyre giving me Those benefits in cash or weed they can keep em

I dont have to pay insurance til im 25 thx obama
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Old 05-02-2016, 02:58 PM   #14430
`Fearu
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re: Winrates, bankrolls, and finances

Quote:
Originally Posted by Rochefort8 View Post
For a real life look,
I just got my 2015 benefits report, it looks like this:

Pension - 16611.94
401k match - 3313.26
Medical - 11297.4
Long term disability- 849.73
Life insurance - 634.8
EAP - 17.64
Employer paid SS- 7347.0
Employer paid medicare- 1956.44
Workers comp coverage - 473.56
Unemployment ins - 634.11
Total - 43139.88

My company includes my 4 weeks of vacation pay and sick pay in normal compensation. So those included brings me well over 50K.

To each his own, but the biggest problem with poker as sole income in the US is that if you claim it as income your gonna get killed on taxes and if you don't you miss out on the best cash flow generating investments out there like real estate due to having no credit/income. I use it as a profitable hobby to buy expensive dinners, take vacations, whatever.
I chuckeled when I read the word pension.

http://money.usnews.com/money/person...-to-retirement

I think that is a decent read for anyone under 30.

I'm not going to argue with your numbers, and part of the problem of this entire argument is comparing current sources of income which we have numbers for vs fictional numbers for ways that we do not earn income.
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Old 05-02-2016, 03:22 PM   #14431
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re: Winrates, bankrolls, and finances

For comparison I have assumed 30 yo person, not married no dependents. Also assumed they do not itemize their deductions. I did not factor in state taxes since they have the option of playing in FL or NV with no state tax implications.

50k/year Employee pays:

FICA/Medicare: $3,825
Fed Tax: $5,725

So even if EVERY thing else is paid for their net take home is ~$40,450 (before accounting for benefits, etc.)

Now it is true that there are non-cash benefits to being employed. These often come in the form of the following (obv benefit packages vary widely):

Health Premiums $6,000 (assuming $500/month)
401k match $1,500 (I used 3% matching which seems pretty standard)
Various insurance (disability, life, etc) $1,500 (total guess using Roqufort's numbers)

Non Cash benefits $9,000

An employee also has some "Safety net" stuff that a poker player would never have...worker's comp, unemployment insurance, etc. These are generally though not always paid by the employer.


100k SE Poker player:

I have assumed they are able to expense ~10k in expenses for travel, mileage, parking, etc. so they are taxed on 90k.

Further I have assumed they pay $500/mo in health Insurance (deductible)

FICA/Medicare (SE Tax) ~$12,700
Fed Tax ~$12,600
Health Insurance $6,000

Total Costs $31,300

So their net after accounting for taxes and health premiums is ~$68,700 (100k less 31,300)

Note I did not account for the 10k in expenses because if we were to do so we would have to quantify an employee's expenses which would generally not be deductible (at least commuting and work parking).

---------------------------------------------------------------------------
Cliffs

Employee Cash after tax comp ~$40,450
Employee non cash comp ~$9,000
Employee Safety net hard to quantify

Total Comp ~$49,450 say $50,000

Self Employed

Net after Tax Comp ~$68,700


These two numbers are not even close to the same thing. I do agree that there is a risk factor associated with being self employed but that is always true of being self employed and each person's risk tolerance for risk is different. To some it is not worth the additional $18-20k that would be realized in the described scenario. To others that could be cut in half and it would be plenty. Each person has to decide that themselves.
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Old 05-02-2016, 03:54 PM   #14432
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re: Winrates, bankrolls, and finances

In b4 fuzzy math retorts to slim's post. Ty for sharing slim - very informative.
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Old 05-02-2016, 03:55 PM   #14433
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re: Winrates, bankrolls, and finances

why is 50k real job being compared to 100k poker though. it should be 50k v 50k or 100k v 100k
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Old 05-02-2016, 04:16 PM   #14434
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re: Winrates, bankrolls, and finances

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Originally Posted by HappyLuckBox View Post
why is 50k real job being compared to 100k poker though. it should be 50k v 50k or 100k v 100k


Because up thread people asserted 100k poker = 50k working for the man
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Old 05-02-2016, 04:26 PM   #14435
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re: Winrates, bankrolls, and finances

Quote:
Originally Posted by HappyLuckBox View Post
why is 50k real job being compared to 100k poker though. it should be 50k v 50k or 100k v 100k
Someone said working 2k hours per year in poker and making $50/hour was comparable to making $50k a year. I disagree on a $$ and cents basis and just provided background.

But yeah when my clients come to me thinking about going alone or whatever they generally are thinking about comparable incomes.
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Old 05-02-2016, 04:29 PM   #14436
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Originally Posted by bwslim69 View Post
For comparison I have assumed 30 yo person, not married no dependents. Also assumed they do not itemize their deductions. I did not factor in state taxes since they have the option of playing in FL or NV with no state tax implications.
good break down. I'd say not including the bolded is a pretty big deal tho imo
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Old 05-02-2016, 05:10 PM   #14437
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good break down. I'd say not including the bolded is a pretty big deal tho imo
Well sure but it's apples to apples at least. Obviously we could compare anything but have to make some assumptions along the way.
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Old 05-02-2016, 05:51 PM   #14438
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re: Winrates, bankrolls, and finances

HEY! Can anyone offer me some advice or guidance on how to organize some sort of ledger (maybe excel, or just something simple) to keep track of my bankroll/expenses and so on?

I'm already using a tracking app on my smartphone to keep track of my results, but poker is becoming more and more a very significant source of my income (I'm basically learning and preparing myself to be playing professionally full-time or almost full-time), and I'm kind of at a loss for how to manage and balance my bankroll with my living expenses. Basically there's nothing for me to do but keep expenses at an absolute minimum, but I'd still like to keep track of everything, and ideally work out an optimal percentage of profits to PUT BACK into my bankroll, both for the comfort of having a larger roll (currently 21 100bb buy-ins), but also to save, eventually move up in stakes, and etc.

As I said I feel somewhat at a loss. I'm just trying to spend as little as possible and save as much as possible, but I don't really have a system. I have enough cash to cover my expenses for the next 2 months or so, but at a certain point I have this weird feeling like I don't know how to separate, even just psychologically, my bankroll from my "life roll". Like I say I come home one night and won 100bb that night. Great, I think, what now? How much of this is staying and contributing to my bankroll, how much needs to be taken to to cover my future expenses?

I guess I obviously need to work out my exact or near-exact monthly expenses, including EVERYTHING, which right now is just an estimation (I don't know exactly how much money I spend per month on food, for example, though I have a pretty close approximation of what I'm spending each month, total.)
So I need to start keeping close track of my expenses, is the bottom line. And then work with it from there.

Any advice? Cheers
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Old 05-02-2016, 05:59 PM   #14439
Mat the Gambler
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re: Winrates, bankrolls, and finances

I bank online, and any time I want to I can request a download of all of my deposits and charges in a format that is easy to put into a spreadsheet.

As far as your budget, I would recommend that you don't base on what you're spending right now, but what you think you can get away with spending. Say, give yourself $300 per month for food. I don't know how reasonable a number that is for you. It's about what I pay for myself. Then keep track of all your food purchases and make sure you don't go over $300 in any month. Food is probably going to be your most variable expense. What else is going to vary a lot?

At this stage, you don't have enough of a life roll to quit your day job yet. Most people recommend having six months of living expenses. So keep grinding until you have that. By then, you should have a decent idea of your winrate to determine if you can go pro.
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Old 05-02-2016, 06:46 PM   #14440
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Quote:
Originally Posted by Kler View Post
I guess I obviously need to work out my exact or near-exact monthly expenses, including EVERYTHING, which right now is just an estimation (I don't know exactly how much money I spend per month on food, for example, though I have a pretty close approximation of what I'm spending each month, total.)
So I need to start keeping close track of my expenses, is the bottom line. And then work with it from there.

Any advice? Cheers
I would do this recursively, so figure out your estimated monthly expenses and then keep track of your exact spend on a monthly basis and compare it to the baseline. After a few months, you should know where you are.

Also, you need to consider annual expenses, like say you spend $500 on Xmas gifts or $250 on dental, factor that in.

You also need to factor in an amount for unexpected costs. Say you have a car and you need that car, how much would it cost to get a replacement if it got totalled tomorrow? That kind of stuff.

So my 'go pro' figure would need to be x buy ins + y months living expenses + z emergency fund = total $$$.

In terms of organising this stuff, there are a million websites and budget apps out there, just browse around and find one you like. A spreadsheet would probably be fine but if you check out specialized programs, that will give you ideas of what you need to factor in or how to best organise the information to suit your circumstances.
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Old 05-02-2016, 06:58 PM   #14441
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Originally Posted by bwslim69 View Post
Well sure but it's apples to apples at least. Obviously we could compare anything but have to make some assumptions along the way.
yes you do. but i'm saying you're kinda cherry picking considering FL and NV aren't the only states a person can play professionally.. and there are only 4 other states that don't have state income tax.

and with a family, a self employed person is paying way more than 500/mo on insurance premiums.
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Old 05-02-2016, 07:18 PM   #14442
suited fours
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re: Winrates, bankrolls, and finances

Quote:
Originally Posted by Rochefort8 View Post
For a real life look,
I just got my 2015 benefits report, it looks like this:

Pension - 16611.94
401k match - 3313.26
Medical - 11297.4
Long term disability- 849.73
Life insurance - 634.8
EAP - 17.64
Employer paid SS- 7347.0
Employer paid medicare- 1956.44
Workers comp coverage - 473.56
Unemployment ins - 634.11
Total - 43139.88

My company includes my 4 weeks of vacation pay and sick pay in normal compensation. So those included brings me well over 50K.

To each his own, but the biggest problem with poker as sole income in the US is that if you claim it as income your gonna get killed on taxes and if you don't you miss out on the best cash flow generating investments out there like real estate due to having no credit/income. I use it as a profitable hobby to buy expensive dinners, take vacations, whatever.
Lol pension in the USA. Good thing we got interwebz to look up that archaic word.
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Old 05-02-2016, 07:19 PM   #14443
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re: Winrates, bankrolls, and finances

Quote:
Originally Posted by Siculamente View Post
yes you do. but i'm saying you're kinda cherry picking considering FL and NV aren't the only states a person can play professionally.. and there are only 4 other states that don't have state income tax.

and with a family, a self employed person is paying way more than 500/mo on insurance premiums.
And most jobs dont give free health insurance.
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Old 05-02-2016, 07:40 PM   #14444
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re: Winrates, bankrolls, and finances

nice work slim
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Old 05-02-2016, 08:59 PM   #14445
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And is your wife a pro player too? Lol maybe she gets benefits. And with a kid or multiple kids AND being married you aren't taxed nearly the same. Idk exact numbers but for myself until I hit over 70k per year as a whole I'd owe pretty close to nothing in taxes. Everyone's situation is different so comparing "real job" 50k vs whatever amount in poker is silly. I know for me the positives far outweigh the negatives. But too many seem to be on a high horse telling everyone it's black n white for everyone and poker as a job is lol disaster
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Old 05-02-2016, 09:01 PM   #14446
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Can't wait to tell my state that I don't owe state income tax because I am not a pro poker player.
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Old 05-02-2016, 10:12 PM   #14447
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Can't wait to tell my state that I don't owe state income tax because I am not a pro poker player.
Or just move to the sunshine state!
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Old 05-03-2016, 12:53 AM   #14448
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re: Winrates, bankrolls, and finances

Quote:
Originally Posted by Mat the Gambler View Post
As far as your budget, I would recommend that you don't base on what you're spending right now, but what you think you can get away with spending. Say, give yourself $300 per month for food. I don't know how reasonable a number that is for you. It's about what I pay for myself. Then keep track of all your food purchases and make sure you don't go over $300 in any month. Food is probably going to be your most variable expense. What else is going to vary a lot?

At this stage, you don't have enough of a life roll to quit your day job yet. Most people recommend having six months of living expenses. So keep grinding until you have that. By then, you should have a decent idea of your winrate to determine if you can go pro.
Yeah this is basically what I'm doing -- keeping much closer attention to my expenses than I ever have before, and making sure I don't go over budget with anything if I can avoid it.

As for grinding until I have 6 months living expenses laid out in advance -- in an ideal world I could just put 100% of my profits back into my bankroll. However, I do freelance work (don't have a real day job), which has become less reliable (work more difficult to find etc.), and need poker to cover some expenses.

So I'm just still working out how much money I should/can be putting back into my bankroll for life savings/moving up, and how much I need to sort out to cover the necessary expenses. It's kind of a tough spot financially, but I'm feeling decent about it so far and managing pretty okay
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Old 05-03-2016, 03:50 AM   #14449
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re: Winrates, bankrolls, and finances

Quote:
Originally Posted by bwslim69 View Post
For comparison I have assumed 30 yo person, not married no dependents. Also assumed they do not itemize their deductions. I did not factor in state taxes since they have the option of playing in FL or NV with no state tax implications.

50k/year Employee pays:

FICA/Medicare: $3,825
Fed Tax: $5,725

So even if EVERY thing else is paid for their net take home is ~$40,450 (before accounting for benefits, etc.)

Now it is true that there are non-cash benefits to being employed. These often come in the form of the following (obv benefit packages vary widely):

Health Premiums $6,000 (assuming $500/month)
401k match $1,500 (I used 3% matching which seems pretty standard)
Various insurance (disability, life, etc) $1,500 (total guess using Roqufort's numbers)

Non Cash benefits $9,000

An employee also has some "Safety net" stuff that a poker player would never have...worker's comp, unemployment insurance, etc. These are generally though not always paid by the employer.


100k SE Poker player:

I have assumed they are able to expense ~10k in expenses for travel, mileage, parking, etc. so they are taxed on 90k.

Further I have assumed they pay $500/mo in health Insurance (deductible)

FICA/Medicare (SE Tax) ~$12,700
Fed Tax ~$12,600
Health Insurance $6,000

Total Costs $31,300

So their net after accounting for taxes and health premiums is ~$68,700 (100k less 31,300)

Note I did not account for the 10k in expenses because if we were to do so we would have to quantify an employee's expenses which would generally not be deductible (at least commuting and work parking).

---------------------------------------------------------------------------
Cliffs

Employee Cash after tax comp ~$40,450
Employee non cash comp ~$9,000
Employee Safety net hard to quantify

Total Comp ~$49,450 say $50,000

Self Employed

Net after Tax Comp ~$68,700


These two numbers are not even close to the same thing. I do agree that there is a risk factor associated with being self employed but that is always true of being self employed and each person's risk tolerance for risk is different. To some it is not worth the additional $18-20k that would be realized in the described scenario. To others that could be cut in half and it would be plenty. Each person has to decide that themselves.
You get to deduct half of SE tax also. The health insurance deducts on the schedule C. So in your example your the taxable income is 84k which comes to 56k cash flow and 24k taxes. IMO 10k expenses for a cash game player that lives near a casino is extremely high. I don't travel much so my main expenses might be $1200 for year subscription to RIO, and maybe some study material like crev, flopzilla, odds oracle, ect for a 1 time expense of $200-$500.

You can lower your tax liability by contributing up to 5.5k to tIRA and up to $37587 for solo 401k.

100k income with 5.5k tIRA and 18k 401k contributions, 6k health insurance write offs on the schedule C and standard single person deductions would give you about 47k cash flow and about 22k in taxes.

Without contributing to retirement accounts, 6k health insurance write offs on the schedule c and standard person deductions you would have 65k in cashflow and about 28k in taxes.

State taxes are not factored in these numbers.

Just noticed I had an extra $1175 expense on the schedule C when I ran all the numbers so the numbers will be slightly off.

Last edited by mreps; 05-03-2016 at 04:00 AM.
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Old 05-03-2016, 08:35 AM   #14450
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re: Winrates, bankrolls, and finances

I now have 7.5BI. Advice on how/when to go pro?
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