Applying compound interest to cash games

E

edgeoface

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Hello
I currently trade currencies on finacial markets as a side income and understand the power of using compound intrest to your profits. Just wondering if anyone thinks you can apply this to poker.
For example if a poker player has $100 and makes on average $30 a month so that is 30% return each month thats 360% a year on average the compound intrest on investment will build as follows
year 1 = $460
year 2= $2,116
year 3 = $9,733
year 4 = $44,774
year 5 = $205,962
year 6 = $947,429
What do you think? realistic?
 
tenbob

tenbob

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No, if it was linear then your idea would work. With poker though, as you move up your edge becomes smaller, and eventually you will come to a spot where you have no edge at all, and even become a loser.
 
P

PotluckXXI

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Yeah, it looks as if you are including each months winnings in your bank roll and basing the figures off the increased capital, so you take a 30% profit off your inital yearly investment and multiply that amount over 12 months plus your beginning yearly capital. To stay at the same level you would have to be MT'ing an ungodly amount of tables by year 4. Moving up is your only recourse and the talent will improve, also you will have to risk your earnings and you will have loosing sessions, so your projected earnings will decrease over time. You are risking your entire BR everytime you sit down at a table by the model you propose so one bad beat could destroy your previous earnings.
 
M

msufan

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Hello
I currently trade currencies on finacial markets as a side income and understand the power of using compound intrest to your profits. Just wondering if anyone thinks you can apply this to poker.
For example if a poker player has $100 and makes on average $30 a month so that is 30% return each month thats 360% a year on average the compound intrest on investment will build as follows
year 1 = $460
year 2= $2,116
year 3 = $9,733
year 4 = $44,774
year 5 = $205,962
year 6 = $947,429
What do you think? realistic?

I wish. Year 1 will be doable, as might year 2 or 3 if you've got skills. Good luck from there. :eek:
 
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