I'll be the first to admit that poker probably isn't a good place to try to make money for most people. I gave it a shot but so have millions of others around the world. So, why would I be talking about poker in a personal financial blog??
I have two reasons. The first, is because I'm pretty happy with myself for the system that I came up with. The second is, it leads up to an interesting budgeting problem that I wanted to talk about. I thought about getting it all done in one posting, but then I thought "what's the hurry?".
Before you get all concerned about me here, poker isn't part of any long term financial plan of mine. It's just a hobby that I enjoy to do and I budget $60/month to play. So it's not like I can't pay the mortgage if I lose a lot in a month. For some people that could happen because they have an addiction. Clearly I'd advise them not to play.
I consider my poker money a sunk cost. That's a big economic word for money that can't be recovered once spent. So as I put the money on the poker table I count it gone. Any winnings then are free money. In the past that generally meant that I went out for lunch or bought a video game or something.
Probably not the most practical money management, but it's the way the human mind works. At least mine! It would certainly take at least some of the joy out of winning, if the money went towards groceries or Visa payments. We had those bills covered beforehand anyways. Otherwise the gambling would be irresponsible win or lose.
At the end of last year I won two fairly large tournaments. Large for me anyway. I spent the winnings from the first on a bunch of video games for my PS3. Then a month later I won another tournament. This time I wasn't sure what I wanted to do with it. So I hung onto it.
That's when I came up with the idea to save up my winnings. The winnings can then accumulate and I can draw them out to play more, play at a higher stakes, or better yet fly to Vegas! Wish I'd thought of this sooner.
One issue did come up through all of this though. How do you keep track of this money? Next posting I'll explain how I lost the winnings and then found them again through the magic of numbers.
Anyone else with a hobby that pays? What do you do with the money? How do you keep track of it?