Bankroll Management for Poker Tournament Professionals

Your bankroll is your most important consideration when you become a professional poker player.  If your bankroll runs dry, you’re no longer a professional poker player and you’ll have to go back to your 9-to-5 grind.

The internet (and this site in particular) is full of advice on how to manage your bankroll. Perhaps the most popular method uses the rules Chris Ferguson outlined to turn $0 into $10,000 in about a year.  Ferguson recommended using 2% of your bankroll for tournaments and 5% for SNGs and cash. While Ferguson’s bankroll management system is great for prop bets, it’s terrible for a professional poker player.

For professional players, a bankroll should be determined by math rather than random rules and the anchor for your bankroll management plan should be your Risk of Ruin (ROR).

Risk of Ruin

Your Risk of Ruin is the probability that a bad run of cards will cause you to go broke.  Here’s the formula:

Risk of Ruin = (1/7)^comfort

This formula is useful for figuring out your comfort level.  We’ll use your comfort level later to determine the size of your bankroll. For now, let’s focus on the Risk of Ruin.

While players have different risk tolerances, 2% is usually an acceptable risk for most professional players.  Here’s how the formula plays out:

2% = (1/7)^comfort

Using algebra, we find that comfort is approximately equal to 2.  Now it’s time to figure out our bankroll.

ROI Calculations

Now that we have our comfort level, we need two more pieces of information.  We need to know our return on investment (ROI) and our standard deviation (SD).

The standard deviations for tournaments are as follows:

  • 9-10 player SNGs = 1.6 buy-ins
  • 45 player tourneys = 2.8 buy-ins
  • 180 player tourneys = 4.8 buy-ins
  • 1k+ player tourneys = 6 buy-ins

Your return on investment (ROI) is your winnings divided by the total you spent on the tournaments.  So let’s say you played 200 $30+3 SNGs in a week and made $660.  Here’s how to find your ROI:

  • 200 x 33 = 6600
  • 660/6600 = .10 or 10% ROI

Now we have to adjust your ROI since you’ll be taking money out of your bankroll every week for living expenses.  Let’s say you need $500 a week for living expense.  Here’s how to find your new ROI:

  • 660-500 = 160
  • 160/6600 = .024 or 2.4% ROI

Now that we have our comfort level (2) and our adjusted ROI (2.4%), it’s time to find out how big our bankroll has to be to go pro.

Bankroll Requirements

So how much of a bankroll do you need to go pro?  That depends on the kind of game you want to play.  If you want to play multi-table tournaments, you’re looking at needing a MASSIVE bankroll to weather the large variance inherent to big MTTs.  For our example, we’ll focus on SNGs since they’re a more consistent source of money.

Here’s what we know:

  • Our Comfort = 2
  • Our Adjusted ROI (after living expenses) = 2.4%

The formula for figuring out your bankroll is:

Bankroll = [comfort*(Standard Deviation)^2]/winrate

or…

Bankroll = [2*(1.6)^2]/ .024 = 213.33 buy-ins

So if you’re playing $30+3 SNGs to make your money, you need $7039.89 to play.


Remember that many things affect your required bankroll.  If you don’t mind reloading, you can increase your Risk of Ruin which will decrease your required bankroll.  Additionally, increasing your win rate or decreasing the amount of money you withdraw every week will also decrease your bankroll requirements.

It’s important not to strain your bankroll when you’re playing professionally.  Recreational players can afford to play more aggressively, but professional players have bills to pay.  Follow the formulas above and you’ll be playing poker for a living for a long time.

Speak Your Mind

*