In 2003, an online phenomenon arose which is now often referred to as the “poker boom”: After amateur player Chris Moneymaker had won the biggest poker tournament in the world and had turned an initial buy in of just 39$ into more than 2 million, plenty of people decided to give poker a shot. Online poker websites provided a platform accessible to anyone and they grew at a remarkable pace. Needless to say, most of the newbies hoping for a big payday were not skilled at all. However, poker is a game of both skill and luck and ironically, both components kept the games going: Except for a few good players, the general level of play at the time was very low. This meant that even bad players would lose their money slowly, experiencing occasional upswings caused by other people’s mistakes and the enormous variance intrinsic to the game.
Poker has an interesting nature. It tends to trick us into believing we are responsible for all our success while losing money is often blamed on bad luck. Bad players thus often stay for a long time, falsely reassured of their own skill whenever they do well. In the long run, almost all of them lose much more than they make in their lucky sessions at the tables.
During the poker boom, this setup was a gold mine for players that were willing to put in the hours to actually become good at the game. A combination of mathematical and psychological skills is necessary for playing poker successfully, making it much more intellectually challenging than many people give it credit for. While the games began to dry up around 2009 and are far less profitable today, the helpful patterns of thinking needed to be successful at the poker table carry over surprisingly well to the real world.
Do not get trapped in results oriented thinking.
I put this one first as it is not very intuitive even to intelligent people. In poker, you have to entirely let go off any conditioning you have undergone in your life. The variance of the game is so absurdly high that short-term results have absolutely no validity. This essentially means that you can play your cards in a certain way, get a positive result and yet you might have made huge mistakes along the way. This obviously works both ways: Even playing your hand perfectly often leads to a negative outcome. So how do you know if you’re a good player? The answer is two-fold. To get an idea of how good you are, you have to get in a representative sample size. No serious player would ever attach any importance to a sample of less than 100 000 hands. The second part is hand analysis. After every session, good players would go through the biggest hands and analyze if the opponent was put on the correct range of cards at any given point in time.
Detaching yourself from results is a useful skill in real life only few people possess. Imagine a situation where you send out only one application for a job and it results in a job offer. This triggers very positive feelings and many people would feel an ego boost. Only few would take account of the option that, just maybe, they were only third in line and the two better-suited candidates received better job offers elsewhere. Or that there were no good applications and the lesser evil compared to even worse candidates was chosen. Or consider that sending out ten more applications could leave them with exactly that one job offer (“regression toward the mean” is a related concept). This does not necessarily mean people should diminish their own accomplishments every time they experience success. It means, however, that one should abstain from jumping to quick conclusions and reflect – there is a lot of randomness in life.
Learn to emotionally deal with situations you consider unfair.
As mentioned above, in poker you often get into situations where you make no mistakes but see huge amounts of money getting shipped to your opponent. This strongly opposes our intrinsic sense of fairness: Deep down we feel we shouldn’t be punished for no reason. It takes a long time to learn how to deal with what is called “bad beats” in poker. I would swear at my screen, I would curse all the stupid people in the world out. When I lost the biggest pot of my life after getting sucked out on the river (funny, non-sexual, poker term for a situation when you put your money in as a huge favorite but lose regardless – the river is the last card that is revealed), I smashed my keyboard. This is obviously not the best way of dealing with unfairness. Most importantly, being upset – or “on tilt”, in poker language – clouds your judgment. In poker, this inevitably leads to instant monetary losses. In real life, this most often leads to overreactions, embarrassment and in severe cases even causes long-term harm to relationships. In poker, when the state of mind doesn’t allow you to bring your A game, it is a good idea to take a break and go back to it later. This can easily be transferred to any real life situation (but is more easily said than done).
Plan for the worst.
Sometimes, streaks of bad luck get severe in poker. This is most commonly referred to as “going on a downswing”. While dealing with emotions gets more and more challenging as you see others taking your money, it is important to be financially prepared for these situations. Ideally, a bankroll should be large enough to take even massive hits, no matter how statistically unlikely they are. The link to life away from the tables is obvious: Do not invest into material objects that you cannot afford to lose.
Many people know the famous saying in poker “if you can’t spot the sucker at the table, most likely the sucker is you”. This is true when you sit in a poker game as your bottom line is directly linked to the quality (or lack thereof) of the players around you. In poker, the saying implies you should run away from such a table as fast as possible. Ironically, I have found the complete opposite to hold true in real life. If you can’t spot the sucker at the table, you are at the perfect table (unfortunately, you might still be the sucker). The difference is obvious: Sitting at a bad table in poker is a very expensive lesson; in real life this lesson is often free. So while you should ideally surround yourself by players of inferior skill in poker and work on your own abilities away from the tables, surrounding yourself by people that are smarter than you in real life is a pretty great idea if you want to develop as a person.
Think outside the box and consider options that appear absurd.
Phil Galfond, one of the best online poker players of all time once said that the moment he took his game to the next level was when he let go of any conventional thinking. While playing online, he was stuck in a difficult situation. He was holding a mediocre hand when the river was dealt and he was facing a large bet by his opponent. As he didn’t put his opponent on a very strong hand either, he didn’t know whether to fold (i.e. let go off his cards) or call the bet. While he was sitting there thinking, another high profile player, Tom Dwan, entered the room. Tom looked at the hand and simply said “shove” (poker term that means “to go all in”). Phil’s head exploded.
The point here is that this move would turn a mediocre hand into a bluff, forcing the opponent to either fold his hand or make a hero call. Sometimes, feeling stuck between option A and B leads us to neglect C – which may turn out to be the best play.
Just like in poker, applying this in real life often leads to decisions that seem very random and hard to comprehend to outsiders (which makes it a lot of fun).
Understand that what money does to you is complicated (and most likely bad).
Many good poker players report an unexpected feeling when building up their bankrolls to a level they would have never imagined was possible: They realize that the joy gained from making money from poker is less intense than the pain felt when losing a similar amount at the tables. This might be somewhat related to the “learn to appreciate what you have before time makes you appreciate what you had” saying but it doesn’t capture the feeling in its entirety. There is something to money that triggers very negative emotions when losing it, which are not offset by a win of the same magnitude. I do not know why this is the case but it is well worth reflecting on the complex effects money has on our well-being.
Many of the lessons above can likely be learnt without engaging in online poker. The reason their realization leaves such a mark on online poker players is the (potentially) large monetary wins and losses that accompany them. In poker, experience is an expensive lesson.