Money Management

[The Admiral]

I get it. Money management and discipline are the key to winning at craps. There are a couple things I’ve never understood concerning money management.

You buy-in and set your loss limit at 50%. When you hit your loss limit you color up, but you have never touched that extra 50%. Why not set the loss limit at the buy-in and leave the table when you lose your buy-in?

You color up when you hit your win goal. What if the table is burning hot and full of precision shooters. It seems a shame to leave the table. Couldn’t you lock up your buy-in and continue to take advantage of the hot trend?

[heavy]

The Admiral said:

You buy-in and set your loss limit at 50%. When you hit your loss limit you color up, but you have never touched that extra 50%. Why not set the loss limit at the buy-in and leave the table when you lose your buy-in? You color up when you hit your win goal. What if the table is burning hot and full of precision shooters. It seems a shame to leave the table. Couldn’t you lock up your buy-in and continue to take advantage of the hot trend?

Well, the easy solution would be to buy in for four times your usual amount and have a 50% loss limit. Then you could tell everyone how you stuck to it. But hey, we all know how that shit would go. Day two in Vegas and, "No dice for you, sailor. You sit in Keno lounge and watch ping pong ball bounce in goldfish bowl."

Seriously, part of this 50% thing is simply an exercise in LEARNING discipline. Players who have none have to start somewhere, and losing only half of your bankroll is a good place to start. After all, most aren't going to stop there, but they may slow down and only lose two-thirds of it. I don't care, as long as the don't stand there and toss their last twenty bucks on the table. Few things make me sadder than hearing a guy turn to his wife who is begging him to leave the table and take him to dinner, and say, "Just a minute. Let me lose this last couple of chips and I'll be ready to go." You have no idea how many times I've heard that and turned to the guy and said, "Here, just give me the goddamn chips and I'll lose them for you. Go take your wife to eat, for shit's sake." And it never works, because the guy is hooked. He's got to PROVE that he's a loser. Oh, he's no doubt holding on to some hope that he'll score this miraculous come-back and win a couple of thousand bucks of that last fifteen, but it's not happening Bucko. Give it up! Get a room. Sleep the narcotics off. You're a dope.

The other part of the 50% loss limit thing is simply psychological - at least for people who have some sort of a conscience when it comes to losing money that could be used for something besides gambling. Yeah, I have a dedicated casino gaming account and I expect to have draw downs as well as winnings. But I absolutely HATE the feeling of walking away from the table a loser. And if I cash out while maintaining a strict loss limit - I don't feel like a loser. I feel like I've maintained discipline, which is a win, and I've retained enough cash so that I can live to play another day. I sock that money away in a "take home" envelope and it can come back to the casino with me on my next trip.

You see, I prefer the wins over the losses because I have plans for them. About half of them get reinvested to increase my bankroll. About 25% of them I give to my bride, who tolerates my gambling with a relatively open mind, and will continue to do so as long as a few Benjamins flow her way after every gaming venture. She doesn't care for the casino environment and typically stays home when I go off on my casino trips. When she does accompany me, she never goes into the casino itself because she has asathma and cannot tolerate the smoke. So, I never have issues with a wife watching me, asking me for slot money, or otherwise needing attention while I'm playing.

I also like to keep a few Benjamins secreted away in my wallet against a rainy day. Opportunity dollars for when I see something I feel the need to purchase without the need to explain to anyone. So, the other 25% of my winning go into my pocket. Sometimes I'll buy some sort of little electronic gizmo that interests me. Other times I'll buy clothes or something I'm interested in for the business but don't really want to go through the whole capital acquisition process. I'll just go out and buy it. But I'm also a Scotch and Cigar guy. I typically smoke cigars that cost anywhere from $8 to $12 each, although in the Summer, when I smoke more I tend to by a few bundles of factory seconds of my favorite blends by the same big name manufacturers whose products I spend more for. But from time to time I may walk into the humidor at my local shop, pick out a Drew Estate Undercrown Maduro, a Padron Serie 1926, a nice Davidoff Maduro, a Partagas Series P #1 (which I have to get from Havana Bobs in Cozumel, because they're Cubans and I can't get them in the States) or a Romeo y Julieta Línea de Oro Hidalgos (yet another trip to Havana Bobs) or maybe a Montecristo 1935 Anniversary Edición Diamante Grande (hooray, a Nicaraguan puro - best tobacco outside of Cuba IMHO) - cigars that will run you from $20 to $88 each, depending on when and where you buy them. And the last thing you want your budget-minded bride to know is that the Scotch your sipping on the front porch cost $175 a bottle and the cigar that's going up in smoke cost another $85. You just want to sit back and let her think it's bar scotch and a $3 stogie from a discounted bundle. So, I sock away my 25% for guilty pleasures, and I don't ask what she does with her.

Now, you mentioned coloring up when hitting your win goal. Remember, a win goal is not a win stop. Typically, most players aren't even aware they've hit their win goals when they've hit them, which is why it's important to count up your rack after every warm to hot hand and after every lap around the table. I try to keep track of mine after every SHOOTER. I have a very specific win goal. $360. But if someone catches a hot hand and I count up afterward and I'm up $870 I'm not cashing out immediately. I'm locking up my $600 - $1000 buy in plus my $360 guarantee (I'd probably lock up $400 in this case), and then I continue playing with the surplus chips in excess of that. In this case, that would give me $370 to still play with. And I will CONTINUE to play that table as long as that table is winning. But if I lose HALF of that $370, I'm going to treat it just as if I'd started a new session. I'm going to stop playing and take the remaining $185, lock it up with the rest of my profit and buy in and it's "color coming in" time. But as long as I'm winning - I'm playing. The other session ending decision? If I lose money on three consecutive shooters after pulling my profit down. Three losses in a row - time to go. Simple as that.

Hopefully that clarifies it for you. If not - go by a bottle of Macallan and a good cigar and enjoy yourself. It's all good.

[The Admiral]

I've heard a lot of people refer to the envelope method of money management. Could someone please explain this to me?

[heavy]

Let's say you're going to Vegas on a Thursday thru Sunday trip. You'll be arriving late Thursday afternoon and departing mid-day on Sunday. While there you estimate you'll break old Heavy's rules about not playing on travel days and you'll play one session on Thursday night and one on Sunday morning. You'll also play four sessions on Friday and two on Saturday (since you'll be taking your wife to a show and dinner on Saturday night and you're planning to see some of the sites on Saturday afternoon - you'll only get in an early bird session and a second after breakfast session Saturday). That's a total of eight sessions spread over the course of the weekend, so you'll need nine envelopes. Label them Session 1, Session 2, Session 3, etc. so you have eight session envelopes. Label the 9th envelope Take Home. Take your bankroll for the weekend and divide it into eight equal amounts, and put those eight session amounts into the individual session envelopes. If, for example, you are taking $4000 to Vegas with you to play with, divide that by eight and you'll have $500 in each envelope. If you are taking $3000 to gamble with you'll have $375 per envelope, etc. When you get to the hotel in Vegas (or wherever you're playing) put all of the envelopes in the room safe. When you get ready to go play you take out the appropriate envelope and take that envelope and that envelope alone with you to the table. That's what you buy in and play with. You don't reach into your pocket and pull out more money to add to it. You shouldn't HAVE more money to add to it. That should be all the money you bring to the table with you. Let's say it's $500. You need a win goal and a loss limit. Let's say the loss limit is $350. That means if your rack gets down to $150 it's time to pull the plug and call it a session. Things are not going your way and there is no reason to believe it's going to change when you have just $150 left in what will most likely be a $15 game. So if you quit and walk away with that $150 you take it up to the room and put it in the Take Home envelope. Do that every session and you are guaranteed to go home with at least $1200 of your bankroll. But wait! You also have a win goal of $350. That means if at any time you find yourself $350 or more ahead in the game you will lock up that $350 and your $500 initial buy in and take it off the table. You can continue to play with any chips still in action on the table and left over in the rack after your pull, but get that profit off the table. And set your self a new, small incremental win goal. Say $100. If you get up $100 over what you have on the table at that point, you pull THAT down but continue to play with the surplus. But if you lose a certain percentage of your surplus chips - say 50% - or you lose on three consecutive shooters - you go ahead and pull the rest of your chips down, color up, and leave the table. Head to the cage, cash out, and take your buy in from that session plus the profit and put ALL of those funds in the Take Home envelope. SO, the Take Home envelope should get SOME funds stuffed in it after every session - either your loss limit remains or your initial buy in plus your sessions winnings. Follow this approach and you are guaranteed to go home with a fairly decent percentage of your bankroll, and there's a good chance that you'll go home with a win.

[The Admiral]

I like it! Very well explained. I'm hitting the road this week for a four day Vegas trip. I'm definitely using this technique. I'll have to bring an oversized "Take Home" envelope