I was first introduced to the game of poker three to four years ago, when I played a friendly game with my girlfriend’s family. It was the first time I had ever played, so I was pretty lost.
I played again with some friends a short while later, and there was one guy there who liked to play aggressively, especially near the end of the game. It always seemed like he had a hand, and it was difficult to play against him. He appeared very lucky and somehow always ended up with all of the chips.
I decided I wanted to learn more about the game and figure out just how this guy seemed to be so lucky all of the time, so I started to delve into some poker books and play online in order to test out my new ideas. Along the way, I was exposed to a bunch of new, unfamiliar terms, such as:
pot odds. equity. expected value.
These words basically all refer to the amount of money you can expect to win on each hand. They are big words, but they are very important concepts if you want to win at poker.
So, how does this tie into investing it wisely? Yesterday, I outlined the three primary resources that we have at our disposal: Our health, our minds, and our time. Everyone is blessed (or cursed) with the same, limited amount of time, but each and every one of us is born with different capacities of health and intelligence. Just like in poker, we are each dealt different hands in life.
However, as any poker player will tell you, it’s not only about the cards in your hand, but it’s also in how you play them. The reason my friend was able to consistently win even though we all had the same chance of getting any two random cards was that he knew how to play his hand. In the same way, even though we all have different hands in life, every day we have a choice of how to use the resources given to us; we can use them wisely, or we can fall into the same traps that many people fall into:
- We can spend all day watching reality shows, or we can choose to spend some time learning something new and interesting, and expanding our view of things.
- We can grow fat and lazy, or we can choose to take care of our bodies and our health.
- We can go into debt and squander our savings, or we can choose to invest our money wisely.
One set of choices increases our life’s expected value, while the other set decreases it.
So what is expected value? In poker terms, it’s the amount of money you expect to make off of the current hand. This not only includes the strength of your hand and draws, but can also include factors such as your odds of bluffing the other person out of the hand and how much money is already in the middle, waiting to be won.
In life, expected value refers to the value that we can get out of our lives; the higher our expected value, the more rewards and personal satisfaction we will gain in the future. It is about maximizing one’s own potential for growth.
Personal Dreams and Goals
It is one thing to talk about the potential for growth, but in order to grow, there must be a reason for doing so. There’s gotta be something that you feel passionate about, in order to have the motivation needed to get there. If you are not currently passionate about anything, then it’s time to start evaluating your life situation, thinking over what you like and dislike, and getting emotional about something.
For me, one of my dreams is to get out of the rat race before I’m an old man. What this means to me is getting to the point where I no longer need to work at a job because I need the money to pay the rent, the car, the groceries, etc…; I am at the point where I have enough assets and passive income to do that job for me, so that I can spend my time working on what I truly enjoy, rather than working to keep the wheels of the cage turning. If I can reach that day while I’m still relatively young, then that would be incredible.
In order to get to that point, I will need to invest my own assets and resources wisely, so that every day is an increase in my expectation, rather than a decrease!
How about you? What are your dreams and goals? What gets you passionate and motivated to constantly improve yourself and work to achieve your goals?