Are you comfortable with your bankroll and looking to diversify your money to create passive and sustainable income? Congrats, you’re ready to invest your poker winnings.
Have you asked yourself: “What do I invest in?”
Don’t worry, many poker players are asking themself the same question. Whether you’re increasing their win rate and have extra money to spend, or if you’re at the end of your poker career. We’re all looking to earn money on our capital.
Over the past 10 years, I’ve been investing my poker income in different ways. In this blog, I’ll cover the investing options I have personal experience with.
Here’s a list with 7 ideas to invest your poker winnings
A quick overview:
- Poker backing, poker shares & poker staking
- Loans to earn passive income on your poker profits
- Cryptocurrency – invest your winnings, but don’t degen!
- Stock market – Are you the new Warren Buffet?
- Real estate – Become a mogul
- Gold and other Metals reduces risk
- Start ups – Gamble on unicorns!
1. Poker backing, poker shares & poker staking
You might have some friends that are looking to get backers. Creating a stable of horses is a good way to create passive income with your poker winnings. However, you as no other understand variance. And you will have to decide if your horse is losing, how far you are willing to let the markup run. Set some clear rules for yourself and your horse before you enter into a staking deal. This way all parties know what they can expect in a good and bad scenario.
Now, do you focus on cash game or tournament poker staking? That’s a question you have to ask yourself. Is the student capable of improving his skills himself, or does he need your coaching? Where do your interests and competence lay? And what are the ROI you expect and the time you’re willing to put in? These questions and more are relevant case by case, and I’d be happy to help you find the right strategy.
If you’re not into finding horses yourself there are platforms you can invest in poker shares of players. Have a look at this website if you’re into a small bet or two 😉
2. Loans to earn passive income on your poker profits
From Poker shark to loan shark, sounds catchy right?
Handing out personal or business loans is a great way to create a steady ROI on your poker profits. Make sure you line out the details like interest rates, interest payment terms, and end of loan contract. You want to avoid a situation which makes it difficult to retrieve your initial money back, so do your due diligence on the person or business you’re providing the loan to.
You can also look into peer to peer (P2P) lending platforms that offer flat interest rates for short and long term loans. These can vary between 3-15% depending on the risk profile, length, and size of the loan.
I’ve personally used LendingClub or Nexo (for crypto loans) and I am happy with the platforms to invest my poker winnings.
3. Cryptocurrency – invest your winnings, but don’t degen!
Most poker players are well aware of crypto and the insane gains it has shown in the past few years. As poker players are risk-tolerant, many were shooting bullets in different ICO’s without much research. Double up and hit and run was a strategy very popular in the bull run of 2017.
Today the market looks completely different, and Bitcoin & Ethereum seem the safest bets for long term gains. Which coin are you betting your poker winnings on?
After you placed your bet, don’t expect an easy 100x gain if you invest in cryptocurrency. Be prepared to HODL for the long run on coins that are fundamentally strong. If you stake a horse, would you randomly pick a horse and hope he hits his one time? Or do you pick a player who shows a positive ROI and a good fundamental understanding of the game to place your bet on? Why would this be any different with cryptocurrency?
While you’re reading the above, you probably feel that makes sense. But in reality, I’ve seen many strong poker players cave to FOMO and randomly started investing in shitcoins. I don’t need to tell you how 2018 & 2019 looked for these degens.
If you want to get started with crypto you can buy Bitcoin, Litecoin, Ethereum, Ripple and other cryptocurrencies here.
4. Stock market – Are you the new Warren Buffet?
Here is a great thing about stock market investing: You can get in the game with $1,000, as well as $10. And if you’re a beginner in the world of investing, the stock market is a great place to start. You can even dedicate a percentage of your monthly poker winnings to start investing in the stock market.
To help you out with that, I picked some essential terms you should know before getting involved with the stock market:
- Stock market index – a measure of a stock market that helps investors to calculate the market performance by comparing current with past prices.
- ETF – stands for Exchange-Traded Fund. In a nutshell, ETF is a type of security that trades on an exchange, and which price fluctuates all day.
- Trading bots – a software program that interacts with exchanges to interpret relevant market data.
If you start out, I suggest having a look at Mutual funds and indexes. Mutual funds let you purchase small pieces of many different stocks in a single transaction. Index funds and ETFs are a kind of mutual fund that tracks an index; for example, a Standard & Poor’s 500 fund replicates that index by buying the stock of the companies in it. When you invest in a fund, you also own small pieces of each of those companies. You can put several funds together to build a diversified portfolio.
You can also look at money managers or hedge funds that aim to get you a higher ROI than the market. Do good research if you’re going this route, as many managers don’t actually beat the market.
You can create an account here and start investing in stocks.
5. Real estate – Become a mogul
When approached correctly, investing in real estate can bring you lucrative ROI both short and long term. We can divide the real estate into four categories, and it’s up to you to choose which one you want to invest in. Here they are:
- Industrial, and
But how to earn from real estate investing? The possibilities are wide. For example, you can get interest from loans, appreciation, or collect rental payments.
A small note, don’t underestimate the amount of work it takes to manage real estate. Personally I’ve been unlucky with renters, which takes energy, time and money to solve these problems. A good property manager can save you from this but cuts in your ROI. Or if you run good, you find a trustworthy tenant who stays their entire life.
6. Gold and other Metals reduces risk when you invest your poker winnings
In the beginning, there was gold. When I say beginning, I mean 1,500 years ago when the gold standard was used.
Although gold is no longer primary currency, it’s still a popular and wise investment. And for a good reason. Gold holds its value, it’s liquid, and it’s an excellent way to diversify your portfolio. As poker players, we are very risk-tolerant. So it might feel counterintuitive to look for safe investments. But even safe bets can have surprising good returns.
So, how can you invest in gold? There are several ways to do that:
- Buy gold directly and sold it later when the price goes high
- Purchase shares in a gold company
- Invest in gold via financial derivatives
- Invest in a gold exchange-traded fund
There are also other precious metals you can look at, like Silver, Platinum or Rhodium. Both Gold and Silver have performed well over the course of the last 30 years. But even with a fairly safe investment like this, you can still see the variance in the graph if you zoom in at 1-5 year periods. Gold has done very well the past 5 years and hasn’t reached its previous “all-time high” of 2010 yet.
After the financial crisis of 2008, many people considered gold as a safe haven. History is no guarantee for the future, but I’d place my bet that gold will rise again if the current financial system crashes again. So consider this a nitty play to invest your poker winnings.
7. Startups – Gamble on unicorns!
Another way to invest in companies outside the stock market is buying shares directly from a company. It costs money to grow and many startups companies are looking for outside investment to support their growth plans.
A startup doesn’t necessarily mean it’s a brand new company. I consider companies with less than 10 employees and younger than 5 years a startup. They can be pre or post revenue and they can have previous funding rounds as well.
“Depending on the company, I generally like a business that has high growth potential. Uber reported an operating loss of $3 billion in 2018 after losing more than $4 billion the prior year. But the market cap of the company is over $60 Billion. People who buy shares of Uber believe the company will grow and make money in the future. “
Generally speaking, investing in startups is high risk. Usually, your investment will be stuck for a while, as there is no public place to sell your shares. So if you want to cash out, this usually happens at:
- New investment rounds,
- Selling shares back to founders
- Initial Public Offering (IPO)
- Find a buyer of your shares
My experience as an Angel Investor
I’ve personally put money in a few tech startups as an angel investor. They give me regular updates on the state of the business and growth plans. It’s very insightful and I’ve learned a lot from it. However, it’s a risky business. I had a few who didn’t make it and therefore I lost the complete investment. But on the flip side, a few are doing very well and raised millions of dollars in future funding rounds on high valuations, so my shares are doing great there. I’ll be a cheerleader for them and hope one becomes a unicorn.
I manage a curated group on investments in startups. We discuss startup companies, valuations, investment structures and more. It’s a quality discussion group, without any shilling or promoting. This small community consists of poker players, entrepreneurs and startup investors who are looking to invest their poker winnings. If you’d like to be a part of it reach out to me.
Next steps to start investing your winnings
It’s always a smart move to diversify your investments and income streams. You don’t want all your money in cryptocurrency, stocks, gold or real estate while that specific industry’s market is crashing.
Place your eggs in different baskets to reduce the risks of losing it all. Whichever way you go, make sure to do your due diligence and research. Talk to your peers and advisors to find the best line of decision three. There are no PIO sims for investing, but I’m sure you’re capable of finding the right strategy.
Hopefully, this blog helped to give you an idea of the possible opportunities out there. The best thing about these blogs is that all these investments are possible to do while you’re still focussed on your poker grind. You don’t have to wait for your career to be over to start with this. Actually, the earlier you start the sooner you’ll be able to retire from playing cards.
If you’d like to dive a bit deeper into investment ideas you have, let’s have a chat! And make sure to Sign up to the newsletter for occasional investment tips & opportunities.