Thursday, January 7, 2010

Poker and Life Lesson #1 - Money

Playing poker has an interesting affect on how you view various aspects of life. Many of the lessons that poker teaches can be translated to life. The most obvious and direct way is the way in which you feel about, and use, your own money. Playing a lot of poker, for a steady income, at once fosters a higher disregard for money, on one level, and a higher respect for it on another. Which is approximately, I feel, what a healthy view of money should be. Respect for what it represents (a product of your own hard work, and a means by which to sustain one's life), while at the same time recognizing that it is ultimately not an end unto itself, and is rather unimportant, in the larger scheme of things.

When I first began playing poker, and put like $200 on a site, losing $20 felt like a really big loss or downswing relative to the total I had available. As I started to win money and moved up in stakes a $20 tournament loss, or downswing, started to feel like nothing. But the $100 loss or downswing still hurt. I would look at my account after it went down from $1000 to $900 and think "dang! I just had $1000! I lost ONE HUNDRED DOLLARS! That's a lot of money!", and I would feel it. As I continued to move up in stakes, $100 fluctuations become unnoticed and negligible. But $500 downswings still hurt, etc. Phil Ivey says "everyone has a pain threshold", where the losses start to hurt. Even the best high stakes players who experience frequent $200k downswings, for them it might take, maybe a $1 mil losing day before they really feel it, but everyone has a point where it hurts.

One might think that my attitude toward 'poker money' would differ from 'real life' money. And it does, to a certain extent. I do tend to keep them separate. But as my tolerance for larger and larger swings in poker money increased, so to did my tolerance for spending larger amounts of money in real life. Not that I started to spend extravagantly on things I didn't need. I always have been, and still am, very practical and conservative regarding money management. But now if I do need or want something, or if I want to buy something for someone else, money is no object. Whereas before I would always check price tags and be concerned with them, now I don't even look at them. Which, I think, is a healthy attitude to have towards money, assuming that your finances are in order and you're not living paycheck to paycheck where you need to be very consciously aware of what money you do and don't spend. Before poker I would not like spending $100 on much of anything, but not because I didn't have the means of spending that amount if I wanted to, but because it just "seemed like a lot of money". And now it doesn't. Which is not to say I have a ton more money now than I did before poker, because I don't. I have a similar net worth today to what I had then. The only difference is that now I see money more as a means to an end rather than as an end in itself, which is, I think, a good thing.

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