Goals vs. Minimums: Some Real Estate Philosophy That May Also Apply to DFS
A wonderful instructor in the real estate industry, named G Money (you can follow his blog on Zillow.com) has taught me many valuable ideals that have helped me not only in my career, but also in life as well. One of G Money’s favorite teachings is goals vs. minimums. His teaching is that goal oriented philosophies lead to one being unsuccessful and failing. An example from my field: A rental agent in Manhattan sets a goal of making $100k for the year. He knows that he needs to do 100 rental deals to achieve this goal. At the end of March he’s only done 8 deals and made $8000. How does he feel at this point? He needs to make $92,000 in the last 9 months to make his “goal”. He needs to average more per month, than made in the first three months total! He gets despondent over his first few months of bad luck, and the negativity begins to creep into his work and his life, affecting him not only financially, put mentally as well.
Let’s say instead he set some minimums: He wants to make $100k this year, but he needs to make $50k to live and pay his bills. His needs to do 50 deals this year to survive. Broken down that’s just about 4 deals per month. If he can close 1/5 clients (pretty standard, most professionals close even more), then he needs to take out 20 clients per month. 20 work days in a month. His minimum is now 1 new client per day.
Which sounds easier to you?
a) Make $100k this year
b) Make 1 new client per day
Making one new client per day sounds a lot easier to me. Once you get the confidence rolling from one new client per day, everything begins to fall into place. And guess what? Once his confidence is high, he starts closing 1/2 of his clients. He takes out 240 people on the year and closes 100-120 deals, easily making the $100k. By looking at the little picture (one new client per day) vs. the big picture (make $100k this year), he has crushed his minimum and achieved his goal.
Many of us are trying to build a bankroll. Many of us have tried to do this in poker before DFS. How do you build a bankroll? Most of us start with a number, say $1000, and want to turn that number into something else, typically a larger number. Let’s say $10,000. The general rules are that you look for good games and put no more than 5 to 10% of your money at stake at any time. Most of us would consider the $10,000 a goal. How many of you have failed reaching that goal? How did it make you feel?
Why not set a minimum? Say my minimum this week is to make $50. If you play 5 days per week, you’re looking to make $10 per day (you can make this your minimum if you’d like). On a $1000 bank roll that is a 5% ROI. Making $10 a day when you have $1000 doesn’t feel as hard as trying to make that $1000 turn into $10k now does it?
I know what you’re thinking: It would take 900 days at $10/day to turn that 1k into 10k. There’s a faster way to get there: Compound your winnings. If you are successfully meeting your $10 minimum, increase your daily minimum to $12, $15 or $20 depending on your bankroll. Stick to your 5-10% rule through the ups and downs. Try to beat your minimum every day. Once you can consistently jump that hurdle, raise the bar a little. Keep jumping it at that height until you can consistently repeat the success. You can do your own personal math and figure out how much faster your bankroll will increase. The book Fortune’s Formula by William Poundstone is a great reference on the Kelly Criterion, and using your profits to drive even higher profits. It is recommended reading, and one of my favorite books.
Another application of minimums is in research. My minimum research that I must do every day is 1 hour before I will set a line-up. I personally feel that I do not have an advantage over my competition if I do not put in that time. If I do not have that minimum of one hour of time available to me, I do not play. If you like to play for fun, as I have done most of my DFS career, I have no issues with that. If your goal is fun, have fun! DFS is cheaper than the movies or a ball game, and you have a chance to win some money as well! But if you are serious about putting together a bankroll, then you must put in the research time.
You must hold yourself accountable and track your progress. Is creating a spreadsheet that tracks your daily progress enough? For me it is not. I must write out and process my thoughts. My minimum is two blogs analyzing my play and/or my thought processes and grading my DFS play each week. These might not be published blogs. They can be for your own personal history, for you to go over in the future.
The point is, if you are looking to build a bankroll and struggling, maybe it’s time to change your thinking. Set a minimum that is easy for you to achieve, and not a goal that is daunting. Keep yourself accountable to meeting your minimums. If you’re into DFS just to have fun, then use it for what it is. If you’re serious about building a bankroll, but are struggling, maybe it’s time to try to achieve those minimums, instead of that huge goal.