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What Winning $250k at Poker Taught Me About Money

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Re: What Winning $250k at Poker Taught Me About Money

#51

Post by btilly »

QuotedForTruth wrote: post #35
IshKebab wrote: post #29

Earlier quoted context omitted.

This is why I don't really like poker. There's just too much variance. Unless you play again and again and again there's not much correlation between skill and the winner. I think it's why people also believe there is "beginners' luck" - there isn't really - the entire game has tons of luck. But when confronted with someone who clearly isn't skilled but wins anyway , poker fans really don't want to face the reality t…

The variance is also what allows poker to thrive and pro players to have an income though. Since poker is zero sum (really negative because of the casino's take) there has to be a steady supply of losing money playing. That means bad players have to believe they have a shot. If they never or very rarely won against higher skilled players, they'd dry up. Imagine casinos that had cash chess tables or basketball courts.…

And this is why every card room has Texas Hold'em but you have to search for Omaha High/Lo.

(Skill has a lot bigger edge in Omaha.)

Re: What Winning $250k at Poker Taught Me About Money

#52

Post by davidscolgan »

slashdotdash wrote: post #27
woliveirajr wrote: post #21

Earlier quoted context omitted.

> You can do everything right and still lose This one. I'm not sure how many readers I would have if I tried to explain it in a book, but I'm tired (to the point that I don't read the books, just the covers) about how everything will be ok if you just wish. When you just learn that sometimes people fail even having taking the best possible decision at any point, you get another perspective for your life.

"Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts" by Annie Duke [1] is just that book. It emphasises that a bad result does not have to be the result of a bad decision. [1] https://www.goodreads.com/book/show/35957157-thinking-in-bet...

Recently read this book in a business book club. It's A++ and is a great mindset shift for business. Make high percentage decisions, and don't discount a decision if it was a good decision but the outcome happened to not work out.

Re: What Winning $250k at Poker Taught Me About Money

#53

Post by btilly »

shorsher wrote: post #34
IshKebab wrote: post #29

Earlier quoted context omitted.

This is why I don't really like poker. There's just too much variance. Unless you play again and again and again there's not much correlation between skill and the winner. I think it's why people also believe there is "beginners' luck" - there isn't really - the entire game has tons of luck. But when confronted with someone who clearly isn't skilled but wins anyway , poker fans really don't want to face the reality t…

I would disagree with the blanket statement that folding 90% of the time is optimal, and can be discouraging to new players who are interested in learning poker. Good players generally play around 20% of their hands, but even that vastly changes based on how aggressive the player is. Also, there is much more to factor in than just the hand you are dealt. You might want to play a tighter range (play less percentage of…

Not optimal in all situations. But if you're playing with a full table of weak/loose players, it is good to play even tighter than that. Only play a high pocket pair or AK, and play them aggressively. Your hope being to take people 1 vs 1 for all the money you can.

You don't need to be any cleverer than that until people pay enough attention that they won't call you unless they think that they have you beat. Then you will have to go for a wider range and start to play a better strategy.

Re: What Winning $250k at Poker Taught Me About Money

#55

Post by edoo »

cjlars wrote: post #13
RyanRies wrote: post #6

In the article, she is quoted as saying that winnings from poker can be taxed at 60%. But I Googled it and the first few sites that I clicked on say more like 25%. What am I missing?

Professional gamblers are supposed to pay self employment tax, which is 15.3% (half is deductible), and then all ordinary income taxes. So that's a top federal rate of 37%, plus -- she's presumably a New York City resident -- another 8.82% at the top rate for NY and 3.82% for NYC. That's about 65% gross, then once you factor in the deduction... about a 60% net marginal tax rate. So she's not wrong, but she'd only be…

Professional poker players are actually classified as athletes.

Re: What Winning $250k at Poker Taught Me About Money

#57

Post by adventured »

cjlars wrote: post #13
RyanRies wrote: post #6

In the article, she is quoted as saying that winnings from poker can be taxed at 60%. But I Googled it and the first few sites that I clicked on say more like 25%. What am I missing?

Professional gamblers are supposed to pay self employment tax, which is 15.3% (half is deductible), and then all ordinary income taxes. So that's a top federal rate of 37%, plus -- she's presumably a New York City resident -- another 8.82% at the top rate for NY and 3.82% for NYC. That's about 65% gross, then once you factor in the deduction... about a 60% net marginal tax rate. So she's not wrong, but she'd only be…

Her effective federal income tax rate on $250,000 is 23.6%.

Someone correct me if my figures are wrong, her total tax rate all-in (based on NYC), appears to be closer to 41%.

$1m gets you to ~48%. $10m gets you to ~56%.

Re: What Winning $250k at Poker Taught Me About Money

#58

Post by bena »

rhcom2 wrote: post #42
IshKebab wrote: post #29

Earlier quoted context omitted.

This is why I don't really like poker. There's just too much variance. Unless you play again and again and again there's not much correlation between skill and the winner. I think it's why people also believe there is "beginners' luck" - there isn't really - the entire game has tons of luck. But when confronted with someone who clearly isn't skilled but wins anyway , poker fans really don't want to face the reality t…

> Another issue with poker - at least Texas Hold'em - is that the best strategy is folding 90% of the time, which is just boring. That's what I always appreciated about professional poker players. Their patience and their emotional regulation. Both of which made me terrible at the game.

Oddly enough it's a good way to learn both. Or at least putting cash on the line gives you the incentive to do so.

Another game I like recommending is Fluxx. It teaches you how to lose. The game is very chaotic and there are things that can happen which cause you to just lose. Or just win. There is some amount of skill involved, but you can be forced in a situation where you cause someone else to win randomly. You learn to divorce your efforts from the immediate results and to accept loss and move on. Partly because the games are pretty quick.

Re: What Winning $250k at Poker Taught Me About Money

#59

Post by davidscolgan »

gagagababa wrote: post #22
kaycebasques wrote: post #20

Earlier quoted context omitted.

What’s the opposite of results-oriented in this case? I.e. what should you orient toward, if not results?

To maximize expected value (EV). You can go all in with AA pre-flop and get a bad beat from someone with 27o. While the result is bad (you lost this time), you made a +EV decision because you were ~80% favorite to win so over the long run this move will actually be profitable.

This right here. But a key aspect of using the expected value idea is that you have to be able to make lots of these bets. If you have a good expected value decision but only make it once or twice, you could just get burned by luck. Only if you can make that same high percentage play many times does this work.

The book Antifragile is all about this. His advice for entrepreneurs specifically is to "avoid your risk of ruin". Starting a business is never guaranteed to succeed, and if you stake your entire life savings on one business venture and take out loans, you could just get unlucky regardless of EV. If you, say, kept a part time job and worked on your business in the rest of your time and had infinite runway, you'll eventually succeed if you don't quit.

This idea has strongly impacted the way I face decision making.

Re: What Winning $250k at Poker Taught Me About Money

#60

Post by bena »

hoorayimhelping wrote: post #47
Tangokat wrote: post #19

I used to play a lot of poker online back in the day, two lessons stuck with me: Speaking to the variance of the game: "Eventually you will run worse than you ever thought possible" Poker teaches, contrary to most business literature, to not be results oriented. It is the decision not the result that matters. "You can do everything right and still lose".

> "You can do everything right and still lose". Super insightful and eye opening when I finally wrapped my head around it. The insightful and valuable corollary / takeaway I get from this is: "But if you make the right move enough, you will win eventually." Determination matters, in poker, in business, in whatever hobby you do. I've noticed this laddering Counterstrike and Overwatch. Individual losses are frustrating…

It's also kind of the philosophy behind "fail fast and often". The outcome of any given decision is affected by so many things that all have to go right, it might as well be random, the only mistake is not making the decision. Eventually, things will line up if you just keep swinging.
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