As a child I had very little.
I felt poor. I was raised with a mindset of lack. Money didn’t grow on trees. My parents made sure I knew that.
When I became a parent I reacted badly to that upbringing. I ensured my son had everything. My only concern was not to raise a spoiled brat.
I never saw the uppercut. It floored me when it came. At 14 years of age I have not taught my son to be independent.
A month ago he asked me to help him out and give him money to go to the gym. I said no.
I told him that in future he would earn his money. I wouldn’t be giving handouts. It wouldn’t serve him.
And that’s the first lesson in personal finance that fathers and poker players can learn from.
1. Learn to Earn
I am teaching my son that if he wants to buy something he needs to earn the money to pay for it.
The value of hard work was instilled in me as a child. I have not done likewise with my own until now.
The value of hard work is also important in poker. If we are talking about earning money purely through playing poker, then the more you play, the more you will earn.
Get your head down and work. The money will come.
2. Set Goals
I talk with my son about his future. At 14 years of age the scariest thought is not knowing what he wants to do. I remind him that it took me 35 years to figure my shit out.
We talk about how much money is enough. When I was younger I always wanted to be a millionaire. It’s a story that has been passed on to my son. However, I don’t need to be a millionaire to be financially free.
All I need to do is to create enough passive income to cover my expenses and I have achieved that goal. How much is that? Do the math.
Poker players should also have a plan. How much money do they need? Why? What are they planning to spend it on? How do they know when they are a success? When do they know it’s time to retreat?
3. Don’t Spend More Than You Earn
My son has been raised in the era of ‘buy now, pay later.'
“Dad, can I order some FIFA points and pay you back when I have cleaned your house?”
I see this same way of thinking in poker all of the time, and in every single strata.
My mate and I were talking the other day. We were planning our trip to Unibet Brighton. He told me that someone else was coming.
It was someone we didn’t know that well. A few days earlier he had turned up at the game asking for a loan. Red flag.
Once my son has set his financial goals he can then save up the money needed to achieve them. I don’t want him to get into the habit of using credit. It’s not wise. It’s lazy.
Poker players need to be able to move up and down in stakes depending on the flow of their bankroll. Failure to do this is failure -- full stop.
Ego prevents you from taking the step down but there is also a lack of financial respect attached to that.
4. Pay Yourself First
My son has an account we call the ’10% account.' When he cleans my house, I give him £20.
He gives me £2 and tells me to put it into that account. It currently has over £100 in it. If he continues to do this for the rest of his life, and nothing more, then he will meet all of his financial goals.
I teach him that when he gets paid this is the first thing he should do. Set the 10% aside. Then, and only then, look at what’s left. That’s his spending money. That is paying yourself first.
Poker players go broke. Poker players pull out of the game when they can see they are going broke.All too many of them have forgotten to pay themselves first.
I’m not talking about a fancy dinner at Nobu or a sports car that turns a wheel once in a Blue Moon. I am talking about putting money away, each month, so they can achieve financial freedom.
It’s too easy to spend money. It’s much harder to manage money.
Some of us have hard cash. Some of us have banks. Some of us have cryptocurrency. And some of us only have our online poker account.
I am teaching my son to automate his money into pre-created accounts. I think poker players should do the same.
- 1. 10% investing.
- 2. Exploring/bucket list
- 3. Taxation
- 4. Service
Then and only then you look at what you have left, pay your expenses, live your life, and play poker at the correct stakes.
6. Good Debt vs. Bad Debt
In the financial classic Rich Dad Poor Dad by Robert Kiyosaki he talks about the difference between good debt and bad debt. I have been passing on these lessons to my son.
To do this I need to teach him the difference between a liability and an asset and get him into the mode of purchasing assets and not liabilities.
I would go into debt to purchase assets as long as it’s planned out accordingly. A good example is going into debt to improve your education. As long as the education is aligned with your life purpose, then it’s a wise thing.
Purchasing a sports car is a liability. Purchasing a pair of Gucci shoes is a liability.
The same is true in poker. Poker players often use the excuse of playing in games that outmatch their bankroll as 'good debt.' To guard from confirmation bias I would take advice from a trusted and respected friend. A person whose word and game you respect.
Only then would I go into debt to play in the game. Also, as a poker player, ask yourself: Are you an asset or a liability? Once again you may need some help with this one.
7. Risk Management
I teach my son to balance financial risk. I don’t want him to be too passive or too aggressive. Investing his 10% in the right way is a good example of spreading risk.
I talk to him about the difference between having his eggs in one basket, or having lots of different baskets full of golden eggs.
You see this in poker. In a recent interview with London Real Liv Boeree talked openly about the small percentages that high-stakes players have of themselves in the very biggest games.
Players are also notorious for swapping pieces of action - another great way to spread the risk.
I always wanted to give to others less fortunate than myself. However, when it came time to do it, I would look at my financial situation and tell myself that I couldn’t afford it.
I have spoken to my son about this. I want him to act differently. I have taken the 1% pledge. Each year of my life I give 1% extra to charity. So far I am at 4%.
There is something special about helping others. It creates a warmth. I believe the universe reciprocates. Poker has become one of the top games/sports when it comes to giving to others.
Raising for Effective Giving (REG), The Charity Series of Poker (CSOP), and One Drop are a few of the charities that poker players use to siphon millions of dollars away from the tables and into their giving hands.
And we haven’t even scratched the surface. There are hundreds of thousands of poker players. In the last financial statement issued by REG they had over 200 members.
As a human race we can always do more to help others, and I always try to instill this important value in my child. It underpins every one of the seven key criteria that I laid down before.