Independent Income at later TL stages

[Kelly Pedersen]

First, I'd note that someone with a given Wealth level doesn't necessarily have the listed assets exactly. If they've picked the settled lifestyle option, they could actually have quite a bit more than that. What they have is actually "enough money to support the typical lifestyle indicated by their Status". If they choose to liquidate their assets and convert it all into gear for adventuring, what they get for their assets will just happen to work out to be about 80% of the value of the money suggested by their Wealth level.

So your hypothetical Filthy Rich character with Independent Income 20 could very well have actual investments worth $12,000,000,000, enough to earn a reasonable 6% interest a year (I'm told this is pretty reasonable rate of return on a stable investment portfolio that doesn't get very risky). However, if such a huge investor ever tried to liquidate their entire portfolio and cash it all in, the value of their investments would likely drop precipitously, and at the end of it all, they'd likely end up with only... $300,000,000! If they had had a higher Wealth level, they would have the social connections and general financial "pull" to get more of their money out of their investments before the market collapsed.

In any case, the general thing you seem to be missing is that traits like Independent Income don't exist solely to simulate investments or "realistic" financial situations. They're designed to cover a whole range of things, from investments, social systems like social security or guaranteed minimum incomes, random stuff like trusts established to cover their expenses that they can't legally touch the principle of, or completely off-the-wall stuff like "my great^10 grandmother made a bargain with a dragon, and since then the dragon pays the firstborn child of each generation a bag of gold pieces every month without fail". If you don't think that investments alone can justify Independent Income 20, it's up to the player and the GM to come up with other reasons that do justify it, or for the GM to disallow it.

[hal]

Originally Posted by Kelly Pedersen

In any case, the general thing you seem to be missing is that traits like Independent Income don't exist solely to simulate investments or "realistic" financial situations. They're designed to cover a whole range of things, from investments, social systems like social security or guaranteed minimum incomes, random stuff like trusts established to cover their expenses that they can't legally touch the principle of, or completely off-the-wall stuff like "my great^10 grandmother made a bargain with a dragon, and since then the dragon pays the firstborn child of each generation a bag of gold pieces every month without fail". If you don't think that investments alone can justify Independent Income 20, it's up to the player and the GM to come up with other reasons that do justify it, or for the GM to disallow it.

So that seems to be the crux of it. The GM has to disallow it if it doesn't make sense for their game world.

THIS is what I was starting the thread up - to explore the fact that Independent Income needs a bit more of an analysis to determine whether or not it fits into the GM's toolbox for his players, and if so, how much to permit.

Social Security payments can be quantified (assuming one knows what retirement social security actually pays!). But it can at least be simulated. My guess? It can't be simulated realistically with anything higher than say, 10 points (if that). It also going to point that Independent Income skews the net worth of a character such that it goes beyond that of what the actual "Wealth level" is that the character was given when the player picked it. An eye opener if you've never gone into that territory before. ;)

[mr beer]

I think the problem you have with Independent Income is that it implies a large portfolio to generate the income but it can't be liquidated and if it could, it doesn't seem to be an appropriate amount of money?

To me this is more of a feature than a bug and as the above poster said, it's up to the player to come up with reasons if this is conceptually problematic.

Some examples of large amounts of income which cannot be liquidated:

1. Trust funds.
2. Lottery winnings paid as an income stream.
3. A huge lifetime annuity (you bought this with a windfall).
4. Royalties and patent payments.
5. Property with a caveat against sale which is paying rental income.

[Ashtagon]

Originally Posted by AlexanderHowl

...In general though, it does not make sense that social payments are Independent Income, as you generally are being paid not to work, so your 'job', paradoxically, is to be disabled and/or retired (in the USA, social payments tend to go down if you work). In that case, a person who gets social payments possesses a Struggling Job, not independent income, as they reduce their income from their social payments by the amount that they earn in another job.

This really dependents on the nature of social welfare.

Under some models (eg Universal Basic Income), it really is independent income as GURPS would have it.

Disability welfare would be Independent Income coupled with an appropriate physical Disadvantage (e.g., One Leg).

A pension would be Independent Income coupled with an advanced age (which might in itself indicate the potential for physical or mental disadvantages).

At least in the UK model, unemployment benefits are paid for searching for work. That effectively consumes enough time to take up a couple of hours daily. That's not *quite* Independent Income, but it's a far cry from a day job either.

[Stormcrow]

Player: "I want my fantasy TL9 Multimillionaire 3 character to have Independent Income 20. That means he gets $6 million a month."
GM: "Where does the money come from?"
Player: "He's got an investment portfolio..."
GM: "I don't think he can have invested enough to make that much every month. Try something else."
Player: "He once found genie and was given a wish. He wished for a steady income that would keep him living easy for life."
GM: "That works."

It's not about a simulation. It doesn't simulate anything, and won't even if you try. It's all about giving your character "advantages" in the game. Nothing more.

[Rupert]

Originally Posted by hal

Ever compute the hourly wage required to earn "average income" for someone working a 40 hour work week in order to earn *AFTER TAXES* 3,600 a month?

About $25/hour in New Zealand, assuming no student debt, and the ACC levies for the industry they're in are average. That, BTW is about the median these days.

At TL9 it seems quite a reasonable amount in GURPS dollars to me. What makes everything go crazy is that the cost of living per month doesn't change with TL. The base starting wealth is 10 months of the surplus income after taking Status-0's $600/month off the monthly income for a given TL.

What's missing is either rising cost of living with TL and/or maintenance costs for all your stuff - the way things are set up implies that looking after your stuff costs about 10% of its value per month.

As for Independent Income, the money to invest to cover it doesn't have to come from one's starting funds. Nowhere does it say that - in fact it says the opposite. It doesn't really matter what the sources is, because you're not allowed to cash it out, unless the GM is intending some in-game catastrophe which will wipe out some kinds of savings, persons, or whatever (and if the player was using II as a major defining traits for their PC this could well come across as unfair).

[AlexanderHowl]

GURPS goes by constant dollars, and the Cost of Living makes sense in the early 1990s $, where $600 per month made sense. In the USA right now, the $ effectively possesses a purchasing power of 25% of what it did in the early 1990s, so $2400 per month is probably more accurate (meaning that $25 per hour is probably equivalent to $6.25 in the early 1990s).

[vicky_molokh]

Originally Posted by AlexanderHowl

GURPS goes by constant dollars, and the Cost of Living makes sense in the early 1990s $, where $600 per month made sense. In the USA right now, the $ effectively possesses a purchasing power of 25% of what it did in the early 1990s, so $2400 per month is probably more accurate (meaning that $25 per hour is probably equivalent to $6.25 in the early 1990s).

Some while ago I estimated my CoL, and after dividing the total non-discretionary monthly expense by the whole family, $300/month/person seemed about in the right range, and that's despite living in a city which has a reputation of cranking up prices higher than fair ones by virtue of being the capital of its state. Of course, nobody in our family has a car, so that's reason to be assigned Status -1, but in terms of comforts things seem fine. So $600/month for Status 0 doesn't seem that far off even nowadays.

Of course, if we take a notoriously expensive city like Monaco, Moscow or MNew-York, the numbers won't add up.

[hal]

Originally Posted by Rupert

As for Independent Income, the money to invest to cover it doesn't have to come from one's starting funds. Nowhere does it say that - in fact it says the opposite. It doesn't really matter what the sources is, because you're not allowed to cash it out, unless the GM is intending some in-game catastrophe which will wipe out some kinds of savings, persons, or whatever (and if the player was using II as a major defining traits for their PC this could well come across as unfair).

Hi Rupert. :)

When I mentioned calculating hourly wages to gain the "average wealth income levels" at TL 9, that seemed to bother a few individuals. ;)

That having been said, your comment about upgrading cost of living is precisely what I ended up doing. That's why - for my cyberpunk campaigns set in the near future, cost of living works out to be 85% the standard wage for that wealth grouping. It seems to work well enough. It also matches the 600/700 (cost of living/monthly average wage) for TL 3.

As for the independent income not requiring that the money from starting wealth be included in its cost, I perhaps explained it badly...

When you do a net worth examination of your "estate", ie, those things that you own and has a value associated with it, all things such as stocks, annuities, contracts, etc (ie assets) are counted as part of your overall wealth, including tangible assets such as cars, houses, jewelry, etc.

Seems to match largely, what starting wealth is in GURPS. 20% money/adventuring assets, and about 80% non-liquid non-adventuring assets. This includes your house, your car, your clothing, etc.

For Independent income to work that is not a government subsidy (or in the case of social security payments in the United States - money that has been taken out of your wages over the lifetime of your working life and a paid stipend based on your income for your working life) - you have to have some "asset" that is performing as an instrument of income. For stocks, it might be dividends. For annuities, it requires a bit of capital that is being left untouched. For Certificates of Deposit - again, cash asset being used by the bank or credit union that is paying you for the use of your money. Then there are other forms of monetary income that largely ties up some asset, where you get paid for use of said asset. It still is YOUR asset however, and you can liquidate it early - but at a penalty. One could sell one's home, and if there is a lien against it from the bank, it gets paid first before you get what remains of the sale of the house, as your own "equity" value (as in an outstanding mortgage still with payments left to go). One could rush the sale of the home and get less than it is worth, or perhaps one could sell the home at a more leisurely pace, and realize most of what it is worth, or even a bit more than perhaps you initially paid for it.

But the ultimate point I was making, is that I.I. largely violates the initial premise/description of what starting wealth is, and what you paid in order to have it (in character points). In reality, if you own an asset, it is largely possible for you to sell the asset over a given period of time and realize its worth. Are there times when/where you can't? Sure, but GURPS rules are there to defeat the prospect of game munchkinism where you pay to get a performing asset, then cash the whole thing in at once, and have a lot of game cash to spend in excess what the points for cash rule specifies. Either the definition of "Starting wealth" is true, or it isn't. With I.I. - it is largely NOT true. That's all. I'm not saying don't use the rule as written, I'm not saying much of anything other than...

"when I attempted to use the rule(s) involved for a reasonably realistic application, I found that 20% of starting wealth as adjusted for wealth, is obscenely out of whack with my expectations of realism. I didn't know it at the time until I put the rules through their paces. Why have Boardroom and Curia as an attempt to flesh out organizations if the independent wealth rules used in conjunction with them can cause a bit of a problem?

[Nemoricus]

Originally Posted by hal

In reality, if you own an asset, it is largely possible for you to sell the asset over a given period of time and realize its worth.

Given that the defintion of Independent Income explicitly states that you cannot or will not convert it to liquid assets, what you could "realistically" do with it is something of a moot point, since buying the trait means agreeing to that stipulation.

If they are assets that you can and will liquidate, then they should be accounted for as part of Wealth. If you then want to turn around and invest those assets such that they give a return with no further work on your part, then you're on your own, since Independent Income exists in part to sidestep that sort of detailed bookkeeping.