Because there aren’t any reliable statistics, nobody knows how many pros die broke. But it’s certainly too many.
If you’re a pro, you have a much higher probability of dying broke than members of other professions, including people who earn much less than you’re winning now. Of course, you think it won’t happen to you, but that’s what they thought before they got busted.
This series of articles will analyze why it happens so often and recommend ways to avoid it.
The Primary Cause
Most of the specific causes discuss here have one common factor: arrogance. Self-confidence is essential for a pro, but you shouldn’t believe, “I’m too special to die broke.”
No, you’re not. You’re just another talented player, and it’s happened to many talented players. Are you more talented than Johnny Moss, Stu Ungar, Devilfish Ulliot, and Gavin Smith? Do you win more money?
Johnny won the first two WSOP championships, but ended up dependent on the Binions’ charity. Stu was history’s greatest no-limit tournament player, but he died in a crummy motel. He was a junkie, but drugs weren’t the only cause for his tragic ending. Devilfish and Gavin won millions in tournaments and cash games, but Phil Hellmuth and other pros are running charity tournaments to help their families.
Nolan Dalla covered the tournament circuit for years. He wrote: “One of the most troubling aspects of the tournament circuit is seeing how many players are constantly broke. I’m not talking about bad poker players or novices. I’m talking about names and faces everyone would recognize…
“If former World Series of Poker winners are broke, what chance do you have of making it on the circuit? … the odds are overwhelmingly stacked against you.”
You may say, “That’s irrelevant. I know tournaments are too risky. That’s why I play only for cash.”
If you walk into many large poker rooms, you’ll see players who once beat big cash games struggling to survive in small ones. In fact, the worst fate isn’t dying broke; it’s living broke for your final years.
As you read this article, ask yourself, “How often do I make these mistakes?”
They Don’t Save Money
It’s the most common and easily avoided mistake. For thousands of years wise people have spent less than they made. In the Old Testament Joseph advised the Pharaoh to save grain in good years to avoid starvation in the bad ones.
You can easily see arrogance’s effects. Dozens of authorities have written that losing streaks are inevitable and recommended saving money. But too many pros think, “That doesn’t apply to me because I’ll always beat the game.”
No you won’t!
You may never have a catastrophic losing streak, but variance virtually guarantees that you won’t always beat the game. If you add the fact that your mental abilities will decline with age, you’ll certainly have some bad years. Even if you’re a net winner, you may not cover your expenses.
They Invest Poorly
Of course, some pros do save money, but they may not invest it well. Again, we see the effects of arrogance. They think, “I’m so smart that I don’t need any advice from investment professionals.” They often make amateurish investment mistakes.
They Play Other Games
Some pros essentially ship money from poker tables to craps and other unbeatable games. “They may never admit it, even to themselves, but in their secret hearts they believe: “Those games may be unbeatable for ordinary people, but not for me. I’m so superior that the laws of probability and lots of other rules don’t apply to me.
“Arrogance also causes some outstanding tournament players to be ‘live ones’ in cash games … when some of them make the final table, their side-game opponents cheer them on. If they have a big tournament payday, their opponents will get a nice piece of it.
“Their arrogance prevents them from learning from their past losses. They delude themselves that this time will be different, that their true superiority will allow them to beat games that have repeatedly defeated them.”
They Cheat On Their Taxes
Some pros cheat, and a few don’t even file tax returns. Believe it or not, honestly paying your taxes can increase your long-term security.
First, you’ll pay more social security, a forced saving for retirement. Because the cost of living allowance frequently increases benefits, most people get back much more than they contributed.
After reading this statement in Card Player Magazine, an angry reader insisted I was wrong. I’m sure many other people, perhaps including you, think that they pay in more than they get back. They’re wrong. Here’s a study that proves it.
Ask some struggling older pros, “Do you get much social security?” Some will say, “No,” and a few will admit, “I don’t get any.”
Second, if you don’t pay social security for at least ten years, you’re not eligible for Medicare. Medical costs become immensely higher as you get older, and they have busted countless older pros. Some older pros have severe health problems or die prematurely because they can’t afford treatments or preventative health care.
Third, you can use programs to deduct your retirement contributions, and the interest, dividends, and other profits accumulate tax free until you retire. You’ll build a secure retirement fund.
They Don’t Buy Health Insurance
It’s another effect of arrogance. Too many pros, especially young ones, think, “I don’t need health insurance because I’ll always be healthy.” They may be right, but it’s an extremely foolish risk.
Without health insurance your entire bankroll, health, and even your life are at risk every day. Too many pros have been busted by the enormous costs of an illness or accident.
They Don’t Protect Their Health
On this issue arrogance has subtler effects. You’ve read that you should eat healthy foods and exercise regularly, but may ignore the recommendations. Some pros subconsciously believe, “Those rules don’t apply to me.”
They rarely exercise and eat badly. They may even sneer at authorities such as Dr. Cardner because they think her recommendations about diet and exercise are irrelevant for poker players.
It’s another form of arrogance. They think that poker is unique, that the rules that apply to other activities don’t apply to playing poker.
We have exactly the same bodies as everyone else, and mistreating our bodies has the same effects. We can’t play well if we don’t feel well.
Worse yet, poor health has much greater effects on poker pros’ incomes than on the incomes of other professionals. The late Barry Tanenbaum, wrote: “Professional poker is a ruthless meritocracy.”
You can make a living as a mediocre salesman, teacher, lawyer, carpenter, or doctor. Most people are mediocre, but nearly everyone makes a living. You can’t survive as a poker pro unless you’re among the best.
If you neglect your health, you’ll have higher medical costs, and you won’t play well enough to pay them. You probably won’t just die broke. You’ll also die a lot sooner.
Future posts will describe other causes for dying broke and tell you how to retire securely. I hope you take them seriously. They can save your bankroll, your health, and your life.
i“So You Wanna’ Be a Tournament Pro? Fuhgetaboutit!” pokerpages.com/articles/archives/dalla27.htm
iiAlan Schoonmaker, “Arrogance, the Biggest Bankroll Buster.” Card Player, September 13, 2002