[Path/Book Magic] Monsters as Magicians... or vice versa

[AlexanderHowl]

Conversely, Independent Income 5 probably represents most multimillionaires who depend on investment income. If we assume a difference between GURPS $ and 2019 $ of 2.4×, and that 1/4 of investment income is taken out for capital gains, a character with Multimillionaire 2 and Independent Income 5 would earn $30 million per month before taxes. If we assume a 2.5% ROI per year after investment costs, that would give them wealth of $14.4 billion. That would put them within the top 50 wealthiest people in the USA and the top 100 in the world.

[Icelander]

Originally Posted by AlexanderHowl

Conversely, Independent Income 5 probably represents most multimillionaires who depend on investment income. If we assume a difference between GURPS $ and 2019 $ of 2.4×, and that 1/4 of investment income is taken out for capital gains, a character with Multimillionaire 2 and Independent Income 5 would earn $30 million per month before taxes. If we assume a 2.5% ROI per year after investment costs, that would give them wealth of $14.4 billion. That would put them within the top 50 wealthiest people in the USA and the top 100 in the world.

Why do you believe that a monthly income of 5% of total assets, which is what Independent Income 5 represents, has anything to do with a realistic Return on Investment that real billionaires receive in proportion to their total assets?

I'll grant that the nominal value of the assets that a character with Multimillionaire Wealth has is probably considerably higher than what he could sell them for immediately, but I sincerely doubt the difference ought to be more than an order of magnitude.

When you have an income that doubles your capital in less than two years, that's not investment income that requires no work, carries no risk and is no part of what defines a character. That kind of income more usually represents someone working night and day, in the early stages of estavlishing himself, and whatever is yielding such enormous returns is probably the adventures that the character is having.

[AlexanderHowl]

The capital is the investment wealth. A character with Multimillionaire 2 and Independent Income 5 will have monthly earnings of $30 million (2019 pre-tax), personal assets of $480 million (houses, vehicle, etc.), and investment wealth of $14.4 billion. Depending on the individual, family estates may be personal assets, or investment wealth, or cost of living, it depends if they consume money or generate money.

Multimillionaire 3 with Independent Income 1-10 is probably sufficient to model the wealthiest 10 people on Earth. Multimillionaire 2 with Independent Income 1-10 is probably sufficient to model the next 100 wealthiest people on Earth. Multimillionaire 1 with Independent Income 1-10 is probably sufficient to model the next 1,000 wealthiest people on Earth. Filthy Rich with Independent Income 1-10 is probably sufficient to model the next 10,000 wealthiest people on Earth.

For example, an individual with Filthy Rich and Independent Income 5 would earn $300,000 per month (2019 pre-tax), have personal assets of $4.8 million, and have investments of $144 million. They could replace their personal assets in 40 months if they used 50% of their post-tax earnings. It would take nearly 90 years to double their investment wealth through investing 50% of their income.

[Icelander]

Originally Posted by AlexanderHowl

The capital is the investment wealth. A character with Multimillionaire 2 and Independent Income 5 will have monthly earnings of $30 million (2019 pre-tax), personal assets of $480 million (houses, vehicle, etc.), and investment wealth of $14.4 billion. Depending on the individual, family estates may be personal assets, or investment wealth, or cost of living, it depends if they consume money or generate money.

Multimillionaire 3 with Independent Income 1-10 is probably sufficient to model the wealthiest 10 people on Earth. Multimillionaire 2 with Independent Income 1-10 is probably sufficient to model the next 100 wealthiest people on Earth. Multimillionaire 1 with Independent Income 1-10 is probably sufficient to model the next 1,000 wealthiest people on Earth. Filthy Rich with Independent Income 1-10 is probably sufficient to model the next 10,000 wealthiest people on Earth.

For example, an individual with Filthy Rich and Independent Income 5 would earn $300,000 per month (2019 pre-tax), have personal assets of $4.8 million, and have investments of $144 million. They could replace their personal assets in 40 months if they used 50% of their post-tax earnings. It would take nearly 90 years to double their investment wealth through investing 50% of their income.

There is no such thing as 'Investment Wealth' by standard GURPS rules. If there was, how would you explain the inability of the PC to exchange the 5 points of Independent Income for a significant fraction of 14.4 billions, by liquidating his assets?

[AlexanderHowl]

It is the only logical explanation for Independent Income above a certain level of wealth.

[David Johnston2]

Originally Posted by Icelander

There is no such thing as 'Investment Wealth' by standard GURPS rules. If there was, how would you explain the inability of the PC to exchange the 5 points of Independent Income for a significant fraction of 14.4 billions, by liquidating his assets?

Hey if the character is willing to trade in his 5 character points for a temporary boost to money...let him.

[Icelander]

Originally Posted by David Johnston2

Hey if the character is willing to trade in his 5 character points for a temporary boost to money...let him.

Uh... sure. Maybe, you know, a little less than several billion dollars for 5 character points, though.

Especially for a character who started with far less money than that as Starting Wealth.

[Icelander]

Originally Posted by AlexanderHowl

It is the only logical explanation for Independent Income above a certain level of wealth.

Plenty of trait combinations don't make logical sense and shouldn't be used in a realistic campaign.

Independent Income 1 adequately models investments, when you keep in mind that Starting Wealth is what the total assets of the character would be if he sold them all to go on the run, so the nominal value of his assets is higher (but not by more than x20).

Independent Income of higher levels than that doesn't represent investments. It can represent other reasons that a character enjoys an income out of proportion to his assets, so it's a perfectly valid trait to have as part of the GURPS toolkit. Just don't use it inappropriately if you aim to create a rich character who lives off investments in a setting with economics with any connection to reality.

[AlexanderHowl]

The vast majority of billionaires have personal assets much less than their investment pools. If you want though, think of the investment fund as bonds rather than stocks, with their value being heavily discounted if they are sold.

[mr beer]

Bonds aren't generally heavily discounted if sold though. Depends on exactly what we're talking about but IIRC on the secondary/open market their price will usually fluctuate according to their issued interest rate vs. the interest rate paid by similar bonds on the primary market.