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Rakeback: Spend vs Re-invest - Top 3 Arguments

By , Rakeback.com Staff Writer

One important decision in poker is the following - should you cash out your rakeback, or use it to play more?

Some players like to regularly withdraw their rakeback/bonus payments, spending it like a 'dividend'. Others treat it as 'retained profit', adding it to their bankroll as a buffer against variance or a way to move up in stakes.

Let's look at the top three arguments for each.

Spend Rakeback - Spend it!

#1: Living Funds

For professional players relying on poker for a source of income, cashing out rakeback ensures a regular, steady flow of funds for living expenses such as rent, food, booze, and cat food. 

#2: Honesty

Without rakeback to bloat the size of your bankroll, you can focus more attention on the initial bankroll investment and it's real growth/decline.  In this way you'll be able to definitively answer the question: are you beating the rake in the games and stakes you play?

#3: Interest/Stress

A stream of funds to your bank account can reduce stress, leaving more time to focus on playing your A-game (or C-game in our case).  In addition, your bank probably offers you some small amount of interest.  Can it beat inflation?  Probably not, but every cent counts. 

#4: Tilt-Factor

Ok we lied, there are 4 arguments.  But this one is important. By keeping your bankroll smaller, you'll reduce your risk of large losses from tilt sessions.  No more Martingaling to HU $30/60 limit after you bubble 9 super turbos in a row, or at least when you do you won't end up bankrupt!

Re-invest 

#1: Roll it Up!

Rakebacl - Reinvest it!

If you're unwilling to redeposit, or have the luxury of not living off your bankroll, re-investing your rakeback each month will allow you more flexibility to move up stakes faster, take opportunistic shots in great games, and play at your current stakes with a lower risk of ruin.  Sounds +EV to us!

#2: Confidence

A larger, evolving bankroll can boost confidence, taking focus away from short-term results, and making downswings less painful. Having this confidence will allow you to take shots at pots, and gamble with big draws in spots where you might otherwise nit it up and fold.

#3: Fees

Less frequent transactions mean less fees charged by the poker rooms.  Less fees = less deductions = more rakeback. Simple. 

What's best for me?

The best strategy for you will depend on your personal circumstances and aspirations in poker. You can of course adopt one course of action one month, then another the next.

Take for example, a professional high-volume $1/$2 PLO grinder, playing ~75k hands per month on Pokerstars, and breaking roughly even in the long run. This player would have a graph that looked something like the following:

Rakeback: Spend or Reinvest - Break even player

This player would need to withdraw FPP instant cash bonuses and milestone rewards on a regular basis, as his bankroll pre-rakeback is static.

However, one month's runbad results could easily result in a net win of zero, as in the graph below.

Rakeback: Spend or Reinvest
To protect against statistical bad streaks, it's important to have a large enough bankroll such that part can be cashed out if necessary, while still leaving enough to play with – see our bankroll management article for more on that topic.

Good luck at the tables.

 

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