Independent Income at later TL stages

[Rupert]

Originally Posted by Celjabba

Basically, II is
"I receive X money every month without doing anything.
If it come from invested money, it assumes that you cannot or will not invade your capital."
Nothing more, nothing less.

The character is in play. None of those situations apply. The player wants to have the character invest money and gain an Independent Income. How much should they have to invest per point of II?

Note that there's a concrete rule example for increasing Wealth in play. It requires you to have the money for the next level of Wealth (and any extra cash for taxes, bribes, etc.). What's more, II is a social trait (like Wealth) and thus comes under the same rule, which says: "To improve social traits, you need an in-play justification in addition to the expenditure of sufficient points."

So clearly for an in-play character II is not just something that, in general, they can plonk down the points for and walk away with. The player is fine with that. I'm fine with that. What we're not fine with is the lack of guidance as to how much II should cost in dollar terms, and that as soon as you look 'under the hood' to try and price it, you discover that the CoL vs income, etc. rules go very wrong past TL4 (at best).

Originally Posted by Donny Brook

It involves an in game justification, but I see no reason to limit that to investments. A grateful monarch couldd grant an income. A patent or novel or song could pay a royalty. Land could produce rent. Etc.

Sure. I agree, and if I said otherwise, it was by mistake. However, in this case none of that applies. The character does have a sum of money to invest and the player wants them to have an II. It seems like a fairly simple situation, but it turns out GURPS gives no answer to what would seem to be a simple question, and the more you dig, the worse the mess.

Even so, there actually are people in the real world who make their living managing their own investments.

And there are also people who do not, but leave it to someone else. A great many people do this, in fact. Calling it a 'job' is a very bad fit for that, and an II seems to be a much better one. Also, calling it a job means the income costs no points, making it a way for PCs to invest their starting cash and make more cash for no resource expenditure at all. At least LTC III, which has a similar mechanism for merchants, requires that they spend time spelling stuff, etc. - it is a full-time job for them.

[Donny Brook]

Originally Posted by Rupert

Sure. I agree, and if I said otherwise, it was by mistake. However, in this case none of that applies. The character does have a sum of money to invest and the player wants them to have an II. It seems like a fairly simple situation, but it turns out GURPS gives no answer to what would seem to be a simple question, and the more you dig, the worse the mess.

Okay, I understand where you're coming from now, but I think you're over-complicating it.

... The player wants to have the character invest money and gain an Independent Income. How much should they have to invest per point of II? ... for an in-play character II is not just something that, in general, they can plonk down the points for and walk away with. The player is fine with that. I'm fine with that. What we're not fine with is the lack of guidance as to how much II should cost in dollar terms, and that as soon as you look 'under the hood' to try and price it, you discover that the CoL vs income, etc. rules go very wrong past TL4 (at best).

The problem you are encountering is because you are looking to the rules instead of looking to the in game justification. The answer to how much money is needed to produce a given return is strictly a setting matter. What is the prevailing rate of return in the character's location in your setting. That will tell you how much he needs to invest for the return if investment is the in game justification you plan to use. It's an in game justification, so you don't need to consult CoL or Job income rules.

And there are also people who do not, but leave it to someone else. A great many people do this, in fact. Calling it a 'job' is a very bad fit for that, and an II seems to be a much better one.

I'm sorry, but I can't perceive the content of your objection to that. A parking lot owner's job could be parking lot owner, even if it's staffed by employees. It's just a job that requires little time.

Also, calling it a job means the income costs no points, making it a way for PCs to invest their starting cash and make more cash for no resource expenditure at all.

I don't see the problem. GURPs Jobs don't require points and neither does investing in-game earnings. But you could equally well just call it savings and apply no Job skill rolls, and just let it roll in without either II or a Job (I thought you were looking for some kind of rules mechanic to represent it).

[whswhs]

Originally Posted by Rupert

The character is in play. None of those situations apply. The player wants to have the character invest money and gain an Independent Income. How much should they have to invest per point of II?

I think that's a case for reality testing. Their wealth level is so and so. One point of II will get them 1% of so and so. How much does it cost to get that amount of money per month, either perpetually or for your life expectancy?

There are online formulas for the present value of $N per period for P periods at interest rate x% per period; there are probably online calculators (any business calculator can do this, and I used to have the formula memorized). And there are Web pages that will tell you life expectancy for a given age, at least for current dates.

Or for a slightly simpler approach, in my current fantasy campaign, one of the PCs bought a building which she planned to use partly as a residence and partly as a business. Since the building was a durable asset, I simplified by saying that its monthly rental value was equal to its market price times the going interest rate. That monthly rental value was the II it generated, as a dollar amount. This was a little oversimple, but I was just going for gamable approximation.

[whswhs]

Originally Posted by Donny Brook

I'm sorry, but I can't perceive the content of your objection to that. A parking lot owner's job could be parking lot owner, even if it's staffed by employees. It's just a job that requires little time.

Business law distinguishes between general partners, who get to share in making business decisions and running the business, and limited partners, who just put in money and collect a return on investment. I don't think the limited partners have a "job."

[Stormcrow]

Originally Posted by Polydamas

The problem is that these rules are not very good at simulating many common character concepts, such as the impoverished aristocrat,

TL 3 [0]; Wealth (Average) [0]; Status 4 [20]; Reputation -4 (Living in near poverty; all nobles; all the time) [-10].

Starting wealth: $1,000
Starting money: $200
Job: Landowner of run-down farm; Average Wealth; $700/month
Cost of Living: $600/month

the merchant in a society where merchants are looked down on,

TL 4 [0]; Wealth (Very Wealthy) [20]; Status 0 [0]; Reputation -3 (Living above his station; everyone above Status 0; all the time) [-7].

Starting wealth: $40,000
Starting money: $8,000
Job: Merchant; Very Wealthy; $16,000/month
Cost of Living: $12,000/month

There are adventure stories, like NCIS, where the character's home lives and finances are offscreen, but there are also ones, like Tintin or Beam Piper's Four-Day Planet, where one or both is onscreen (Tintin's finances are a blank slate, but his apartment and then Marlinspike Hall are often settings for action).

If Wealth or Status play no part in the campaign, then they are not worth points. If you can say, "Let's go back to my place" during the adventure, then they play a part.

[Donny Brook]

Originally Posted by whswhs

Business law distinguishes between general partners, who get to share in making business decisions and running the business, and limited partners, who just put in money and collect a return on investment. I don't think the limited partners have a "job."

My example was a guy who owns a parking lot.

Nothing in the rules specifies the amount of effort or time that must go into a Job, so nothing prevents being a parking lot owner from being a Job, irrespective of the amount of time or effort involved.

[Rupert]

Originally Posted by Donny Brook

The problem you are encountering is because you are looking to the rules instead of looking to the in game justification. The answer to how much money is needed to produce a given return is strictly a setting matter. What is the prevailing rate of return in the character's location in your setting. That will tell you how much he needs to invest for the return if investment is the in game justification you plan to use. It's an in game justification, so you don't need to consult CoL or Job income rules.

And the answer is, as others have pointed out "A great deal of money". And that immediately makes any level of II for someone of more than say, Wealthy, highly questionable.

By the way, here's another weirdness:

If you start with Average Wealth, and buy some II (say 10 points), and then, in play you gain a pile of money and then spend the points to become Filthy Rich, your income from your II scales automatically. So somehow, by doing nothing more than buying a nicer house, living a nicer lifestyle, and so on, your II's payout becomes enormously larger.

Then there's the way II scales with TL - because it's based on starting money, and cost of living doesn't scale with TL at low TLs you can't buy enough II to live off at a level of Status that someone of your Wealth is expected to live at. At TL5+ you can. At TL12 one point brings in more than it costs to live at Status 0 if you're of Average Wealth. The problem here isn't II, but the CoL.

[Anthony]

Originally Posted by whswhs

I think that's a case for reality testing. Their wealth level is so and so. One point of II will get them 1% of so and so. How much does it cost to get that amount of money per month, either perpetually or for your life expectancy?

Long-term average of P/E for the S&P 500 is about 15, which if adjusted to monthly works out to 180x the income. I've seen similar numbers for rental property. I would note, however, that a net worth exceeding 100x monthly income, while it would be weird in GURPS, isn't that weird in reality, a 50 year old couple with a combined income of $120,000 ($10k/mo) and $1,000,000 in assets (IRA and home equity) is on the high side but hardly unbelievable.

[Ulzgoroth]

Originally Posted by Donny Brook

I'm sorry, but I can't perceive the content of your objection to that. A parking lot owner's job could be parking lot owner, even if it's staffed by employees. It's just a job that requires little time.

Since starter jobs are free, creating such blatantly superior jobs (this 'job' gives you heaps of money for no effort and means you own a big chunk of capital outside the regular system! Or you could be stuck in an office 50 hours a week, if you'd prefer.) radically imbalances character creation...

[Donny Brook]

Originally Posted by Rupert

And the answer is, as others have pointed out "A great deal of money". And that immediately makes any level of II for someone of more than say, Wealthy, highly questionable.

I don't understand what problem you perceive with it. Interest rates are whatever they are. If you don't like the results then you don't have to use that kind of investment as the in-game justification. If you want the player to get a better deal for his points, just decide that he found a better investment. You're the GM, so you get to choose what is a sufficient justification to spend the points.