As a business or professional return on investment (ROI) is a crucial factor to determine your success rate. While its simple and easy to calculate the rate of returns on certain business and financial instruments like fixed deposits and bonds, there are certain forms that involve a greater element of risk. The real estate market, stock market and games of skill like poker can be unpredictable, but that does not eliminate the need to calculate and see how you are stacking up.
Poker can be volatile and the swings that come with it can be daunting for most players. Here are simple ways you can be calculating your ROI in poker and identify its viability for yourself whether you are professional, recreational or a newbie in the game.
We begin by understanding the fundamental concept of ROI. In poker, the return on investment is nothing but total winnings – total buy-in. For example: Say you need to invest Rs.2500 in a tournament and you play 5 such tournaments. That brings your total buy-in to a total of Rs.12500. After playing the tournaments you come out with a pay check of 14125. Therefore your ROI will be 14125-12500 = 1625. The percentage return on investments can be calculated as below:
[(Total Winnings – Total Buy ins)/ Total Buy-ins] x 100
Illustrating the same with the above example
[(14125-12500)/12500] x 100
Some simple math and you know you’ve made a 13% return on the amount you’ve invested. Now ROIs can be negative or positive, but what’s key is measuring the level of success over duration of time.
An average of 100 games is a good sample size to help determine your success rate. Say a 13% return is what you calculate across 100 games, it’s a sizeable profit nonetheless. A negative 13% is also an offset able loss which you probably might recover in the next 50 -75 games. However a negative return of 50% over 100 tournaments is a cause for concern. Its also an indication that you should be looking at other games to play or investment your money elsewhere.
While some poker players are of the opinion that you shouldn’t be chasing your losses, we believe by calculating ROI, you can keep tabs on your victories and defeats and use that information to your favour to climb the ladder of success.