“The smarter you play, the luckier you’ll be.”
Mark Pilarski
While gambling and investment don’t go hand in hand (and they shouldn’t too!), there are some life-changing tips you can get from seasoned poker players. Of course, these tips can change the state of your bank balance too. Those who know the game well will tell you it’s never only about luck. A lot more than that goes into winning the game.
This is the same as getting returns on your investments – if you do it right, you don’t really need to hope for luck to be in your favour. Let’s take a look at some important financial lessons we can learn from this compelling game.
1. Do your research
Poker is a game of skill. The term ‘poker face’ is a famous one. Learning to keep a poker face regardless of the hand you hold is important. Also, noticing how everyone reacts when they see their hand, studying their expressions, and marking a trend help you guess what they hold.
In the same way, if you are planning to invest in the stock market, you need to study stocks, their movements, and the reaction of the market to different news. If you are new to investing (congratulations!), make sure you consult an investment advisor and ask him/her a few important questions, of course, after doing the basic research yourself.
2. Don’t be afraid to take risks
‘He who is not courageous enough to take risks will accomplish nothing in life.’ This quote stands true for poker as well as life in general. Poker is all about how well you play a bad hand.
In the same way, you have to make friends with risk in life, especially if you are an entrepreneur. If you are planning to start a business of your own, there will be loads of risks you will have to take to see if ‘it’s working or not’.
When you are planning to invest your money too, you will notice that higher returns always come from taking greater risks. It is wise to not go ‘all in’ when you are taking a risk, but you cannot play safe all the time either. Because as they say, the biggest risk will be the one you don’t take.
3. Be patient
If there is one tip any pro-poker player could give you, having patience would be it. While playing poker, composure is everything. You might have a series of bad hands and losses but playing with a steady and composed mind will ensure you recover your money.
Similarly, if your stocks are on the way down, don’t start panicking and hitting the sell button. Have the patience and fortitude to weather through the temporary downturn, and you would see your investments start to pick up again. Of course, this is assuming you’ve done your research and bought into companies that have strong fundamentals.
Just like in poker, there is nothing worse than letting your emotions take over your mind when it comes to investing. Focus, do your research and keep calm.
Related: How to Invest Without Being Influenced by Your Biases
4. Be aware of your limits
While playing poker, it isn’t uncommon to forget financial boundaries. The feeling that you will win the next hand always forces you to put in more money than you had in mind. Ideally, you must set a budget you want to allot to a session of poker, depending on your financial capabilities, and not exceed it.
In the same way, calculate an amount you can invest in stocks or CPF every year and do not overshoot it. Make sure you also have an emergency fund saved for a rainy day. Feel a need to splurge on that car? Go for it, but without touching insurance premiums, card bill payouts or dipping into your emergency fund.
Related: Here’s Why You Need an Emergency Fund and How to Get Started
5. Know when to pass
Dan Reed once said, “You will show your poker greatness by the hands you fold, not by the hands you play.” This makes so much sense! Knowing what will and will not work for you is being wise. It will help you not get busted and ‘stay in the game’.
Similarly, having clarity about where you want to invest and what will work for you will not only multiply your money but also keep you stress-free. If some business you started isn’t working out well, give it time but know when you need to pull the plug.
So, keep calm and play the game of poker….and life!
This article first appeared on Bankbazaar.sg.
Bankbazaar.sg is a leading online marketplace in Singapore that helps consumers compare and apply for a credit card, personal loan, home loan, car loan and insurance.
