Pick of the Week: The Value of Money

Money
This week I looked at my bank account and saw that I was £1,400 overdrawn. This is the first time that I have been overdrawn since I left the railway on the 11th September 2010. I am very angry and disappointed with myself over this situation. I have a lot of invoices due to clear and so technically I am well in the black, but how did I manage to spend more money than I have earned?

I have not followed my own advice!

As I mentioned previously, in my blog post Goals Quarterly Review – Finance, I had created a financial plan that had allowed me to enjoy myself without going into debt. Things had been going well until I went on vacation to Thailand. Not only was that vacation unplanned, but I also spent far too much while I was out there. Don’t get me wrong, money cannot buy the amazing experiences that my girlfriend and I had, but it really isn’t the point. What is the use of a plan if I don’t follow it?

The other area where I have overspent is in my poker. I have been backing a good friend of mine when he plays in the World Poker Tour (WPT) and European Poker Tour (EPT) main events. Unfortunately, my friend has not been cashing and I have been dipping into my ordinary account to pay for these deficits. I have decided to cease this activity immediately because not only can I not afford it, but also I feel like I have climbed back onto the gambling escalators and the only way is up.

I am in Monte Carlo working at the European Poker Tour (EPT) Grand Final this week, and I decided not to take my usual 5% of my friend’s stake. He was in 7th place at the end of the combined day ones and with a €1,500,000 first prize I started to bemoan my bad luck (5% of €1,600,000 = €80,000). Then I realised that I needed to stop thinking in that way. It’s like my girlfriend said, “If he wins it, then you give him a big hug and a kiss and say well done as he is your friend.” The problem with being a gambling addict is just one bet stirs up all of those old feelings. Once I started backing my friend I simply couldn’t stop.  I was terrified he would win something during the time I had stopped backing him. It felt like the dread you have when you forget to put your lottery numbers on one week. My friend is also going to help me by not asking me if I want a my usual 5% stake, which I really appreciate.

I am sharing a room with my friend at Monte Carlo and last night we got embroiled in a conversation about money that I wanted to share with the readers of this blog. Let me first start out by giving you some facts. The vast majority of poker players, who travel the world, eating in the fanciest restaurants and seeing the most amazing sights are broke. Most of them have financial backing from a small contingent of winning players in the game. As the player being backed, it is easy to run your debt into six-figures in a relatively short period of time. In the poker industry this debt is known as make-up.

The age differences in poker is far and wide, but there are a huge number of them between the ages of 20-25. For this age group, this lifestyle is all they know. When I worked on the railway we had a saying that we would use when referring to people who had worked on the railway all of their lives, “They have not lived in the real world.” This statement can be applied to this young bunch of poker players.

The conversation my friend and I held last night was over loans made in poker circles. He believed that it was perfectly fine for someone to owe you a four and even five-figure sum, for as long as a year, if taking it meant they could not play. This is despite the fact that the person handing out the loan may need the money to play themselves. I argued that this way of thinking is flawed. Another classic case of societal conditioning, this time narrowed down to the niche of poker. In his view, this is an unwritten poker rule, but I think it is a rule that has grown out of control. Why should you act the way that everyone else acts? Step up and be a game changer. I believe it is a question of values. If you lend money then there should be specific terms on how the repayments occur. You should insist on this before the transaction is made and you should also behave in the same manner when you are receiving the loan. Simply, if you want your money back promptly then make sure you deliver your returns in the same manner.

I have my own values when it comes to money. I step out of line sometimes, but it’s because I have values that I know when I have stepped out of line (take this overdrawn incident as an example). I sometimes find myself loaning my poker friends £20 or £50 and I don’t get it back unless I ask. The reason this happens is because of this poker conditioning. They are so used to getting something for nothing, which is what happens when you are in $100,000 of make up, that the way they think about money changes. They are so used to vast sums of money changing hands in loans of this kind, that when a muggle (poker term for a non-poker person) like me comes along and lends them £20 it doesn’t even register with them that they need to give it back. My friend believes that this is normal behaviour within the poker community and I was last night arguing that it needs to stop, using my friend as an example of someone who should stand up and be counted.

This is not a poker problem. This is a fundamental values issue. These people do not value money. They have gotten so used to receiving large sums of money, losing it at the tables and then going back for more that it has screwed up any values that they once had of money.

Everyone should re-assess his or her values from time to time. Do they have integrity? Do they have a sound system for managing their values? I mentioned in the start of this post that I have waivered from my own set of values and need to get back in line. People in the poker industry need to take a long hard look in the mirror. They need to start paying people back. If they owe somebody £7,000 it doesn’t matter if the person they owe money to goes and wins £1 million. You still owe them £7,000 and you should pay it back. It is not your money. You should not buy yourself a pair of shoes, eat in Claridge’s or travel to Monte Carlo – you should pay what you owe first. If you don’t then you seriously need to question your integrity and whether or not you have any values at all.

Photo courtesy of 401k (cc@ flickr.com)

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