On weekends in college, I regularly played poker. I did it mostly for the social aspects, but I also won about $20 each weekend. The lessons I learned in poker were very applicable to my career and life. Here are some of the lessons I applied to personal finance:
You must play the hand you are dealt. Every game requires each player to use the hand that they receive. No one ever says, "if I only had 4 aces, I'd be a winner." You try to win the money with the cards that you have.
You must play the hand you are dealt. Every game requires each player to use the hand that they receive. No one ever says, "if I only had 4 aces, I'd be a winner." You try to win the money with the cards that you have.
Personal finance application - No matter how much I was earning, I always payed myself first and put money into savings.
Knowing when to fold is an important skill. Anytime during the game, one can choose to quit playing a hand. Cutting one's losses early and letting the winners run is a important skill. A bad hand rarely becomes a good hand. A good hand can become a better hand.
Knowing when to fold is an important skill. Anytime during the game, one can choose to quit playing a hand. Cutting one's losses early and letting the winners run is a important skill. A bad hand rarely becomes a good hand. A good hand can become a better hand.
Personal finance application - On my losing stock picks, I try to get out before the losses become big. Honestly, I am still not as good as I would like to be in this area.
Bluffing works well when used occasionally. Many times I won because I had the best hand. Sometimes I won because people thought I had the best hand, and the best hand folded. In poker, sometimes it's not the cards you have that matter, it's the cards players think you have that count.
On the other hand, bluffing only works when used appropriately. If one always bluffs, the other players will know that one doesn't have a good hand.
Personal finance application - When negotiating a price, be ready to walk away from the purchase.
Bluffing works well when used occasionally. Many times I won because I had the best hand. Sometimes I won because people thought I had the best hand, and the best hand folded. In poker, sometimes it's not the cards you have that matter, it's the cards players think you have that count.
On the other hand, bluffing only works when used appropriately. If one always bluffs, the other players will know that one doesn't have a good hand.
Personal finance application - When negotiating a price, be ready to walk away from the purchase.
The overall winner will have won in many different games. While luck plays a role, skill is the most important factor impacting the game. The best player will understand the strategies, be able to bluff and know when to fold for the different games.
Personal finance application - I am building my wealth using a portfolio of investments - stocks, bonds, CDs, and real estate.
Always look for the "fish" in the game. If you can't find him, you're it. A fish as a bad or weak poker player. There is usually a fish in every game and he will lose his money to the other players. If one isn't good at identifying the fish at the table, then one is probably playing out of one's league.
Personal finance application - Being able to separate good financial ideas (e.g. pay oneself first) from bad financial ideas (e.g. only trust gold) is very helpful.For more Reflections and Musings, check back every Saturday for a new segment.
Photo Credit: morgueFile.com, Ronnie Bergeron
This is not financial or poker advice. Please consult a professional advisor.
Copyright © 2007 Achievement Catalyst, LLC
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3 comments:
That is well said ! :)
You must be very good at poker.
I will mention this article tomorrow in my next Sunday Review.
Btw, thanks for the Investors Blog Network blogroll. You email was a wake-up call...I will steal those links from your blogroll and create mine asap.
Golbguru,
Thanks for your comment and the mention in your Sunday review.
I was a pretty good poker player at one time, but still not as good as the pros :-)
Nice article! I had similar thoughts after my last poker game.
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