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  1. #1
    rexkicker's Avatar
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    Do we focus too much on liquid gold amounts?

    It’s a question I’m asking myself right now.

    I’m trying to change my mindset at the moment. It used to be that having a large pile of gold is a good thing. Unfortunately its not.

    Why?

    Well because the gold itself isn’t earning any interest, so the purchasing power of gold is eroded over time due to inflation. I would love to have an interest bearing facility in WoW where you could accrue interest based on how much gold you have in the bank. That way it doesn’t feel useless just sitting there.

    That’s not the case however. The only alternative open to us is to purchase assets that appreciate in the short or long term. Its not the liquid gold you have that makes you rich, its what you have it invested in that will.

    My focus is on trying to keep as much of my gold in the market as possible. I’d say that right now, my assets are about 70% invested at the moment and if I liquidated my holdings it would easily clear the gold cap. Ideally though, I’m looking to invest a further 10% and hold about 20% liquid for any opportunistic purchases. So personally, I do not want to hit the gold cap, if I do, it means that I would not be putting my gold to work effectively.

    Some food for thought.

    Cheers all,

    Rex

  2. #2
    Liquid gold is fun to look at. But as you say - it's not earning you anything by sitting in your bags as gold coins.

  3. #3
    On the flip side, try paying for an item off the AH in Darkmoon cards or in rare recipes. How's that going to work for you? Now what if there's a once in a lifetime deal available on the AH and all of your assets are tied up in cards? There's a reason gold is good to have: its liquid and you can trade easily trade it for stuff (duh, I know).

    Furthermore, there is a very real opportunity cost to trying to find a buyer for your non-liquid assets at the moment when you want to cash out. Your cards might have a theoretical value of 15k each, but if you need the gold right now you're going to have to settle for less than that, maybe much less.

    I find that when my assets are tied up in non-liquid holdings I have more difficulty gauging my money coming in and money going out. I guess its just easier to get careless when I'm looking at a bank full of items instead of easily comprehensible digits.

    You're totally right that too much liquid wealth is bad and you should try and put your wealth to work for you, but I don't think the inverse is necessarily good either. Its a balance I try and strike, with mixed results I'd say. Good food for thought
    Last edited by Traumatic; April 13th, 2011 at 12:41 AM.

  4. #4

    But gold loses less value that most everything else

    My 800k golf will be worth less in 6 months than it is worth now.

    But I think it will hold its value much better than anything else.

    If I were going to be deployed and/or away from WoW for 12 months, I can't think of anything I would rather have than gold.

    Blizzard is about devaluing everything so you have to stay on the treadmill. Your 50k BoE from December will be worth a grand or two a year later.

    So I look at it that unless you can make a compelling case why something will go up, you should sell it and keep it in gold.

  5. #5
    Meyer's Avatar
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    You really only want to liquidate your investments fast at one point in time Ė and thatís for the ScreenShot when hitting the GoldCap Ė but after that (and before) you want your money to work for you. I always have +1 mio. cash to look at, but I donít keep track of my inventory value to be honest. I might have 100 or 200K worth of inventory Ė I donít know and I donít really care  I have not bought anything I donít believe Iíll be able to sell for more at some point. A lot of my inventori are also normal commodities in stock if I need them some day and the AH is soldout Ė or if the AH prices go berserk.

    The only objective measurement for wealth is the amount of gold on your account, but never make this a limitation for the business opportunities you want to explore.
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    Summer 2010: Average Poor Wow player ||| Winter 2010: Joined The Consortium ||| Summer 2011: Passed 2 mio. liquid gold ||| Currently (MOP) >4 mio. ||| You could do the same.!

  6. #6
    Quote Originally Posted by hag View Post
    My 800k golf will be worth less in 6 months than it is worth now.

    But I think it will hold its value much better than anything else.

    If I were going to be deployed and/or away from WoW for 12 months, I can't think of anything I would rather have than gold.

    Blizzard is about devaluing everything so you have to stay on the treadmill. Your 50k BoE from December will be worth a grand or two a year later.

    So I look at it that unless you can make a compelling case why something will go up, you should sell it and keep it in gold.
    I don't think he's necessarily talking about epic BoE's, I think he's talking about real investments. One quick, easy, and apparent example is the argent tournament pets. 6 months ago I could buy these for 400g each. Today they are bought regularly for 3,000g each, while an epic from ICC that was 10,000g six months ago, is 50g now. It's not "You can't invest or you'll lose!" it's more what you invest in. Be smart with your investments, and you will always make money.

    Granted, you can't always make tons of cash from investing, because blizzard screws us over on some things, but that's the game and the risk we all take, and it's why we love the gold game. This is also why when I buy something like ... say a 50k BoE epic, I sell it quickly for profit, because that isn't a long-term investment, it's a short-term. If you don't re-sell that within 2 weeks, you're wrong. However, if you buy 50 argent tournament pets for 400g each, and wait.... Well, as long as you want, you'll make ALOT of money.

    50 argent tourney pets at 400g each, 20,000g. Today sold for 150,000g.
    20,000g sitting in your bank, still 20,000g today. (Although, a more devalued 20,000g, as it's twice as easy to make gold in Cata!)
    Invest smart and you make money.
    Last edited by Gnomage; April 13th, 2011 at 06:01 AM.

  7. #7
    Sinshroud's Avatar
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    I actually really dislike stockpiling.
    Simply because I can't stand not remembering 2 years later how much I "paid" for the investment and I start getting paranoid wondering if I am actually making a profit or not.

    You can argue indeed that "liquid gold" can have a much lower actual value than stockpiled goods, because as mentioned above it does not gain interest. HOWEVER, you should always ensure that you have more than enough gold to buy anything you want with the snap of your fingers. If you ever find yourself in a situation where you suddenly don't have enough gold to invest in a GREAT deal, then you are not managing your resources properly.

    Yes, liquid gold is great to look at and show off to friends. I also find it a huge confidence boost. I can steadily watch my income climbing rather than get rough estimates of stock value with addons such as BigPicture.

    Usually every so often I go through all the items that I have packratted and stockpiled over the past few months (not normally much anyways) and I either auction it off, give it to friends or put it to proper use with professions etc.

    I try keep all my non-liquid gold on the Auction House when ever I can. (E.g. enchanting scrolls, gems, pvp items, etc).
    If someone makes a helpful post or useful thread, be sure to let them know by giving +reputation. Spread the love!

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  8. #8
    Quote Originally Posted by Gnomage View Post
    50 argent tourney pets at 400g each, 20,000g. Today sold for 150,000g.
    20,000g sitting in your bank, still 20,000g today. (Although, a more devalued 20,000g, as it's twice as easy to make gold in Cata!)
    Invest smart and you make money.
    This! and also TGC mounts would be one of those smart investements. If you are to leave wow for 12-24months, and come back to a new expansion, your gold will be worth a fraction of what it was. But popular commodity will always rise in price according to what people are willing/able to pay. If 200k gold today is normal for a spectral tiger, what will it be in the next expansion when everyone have 200k gold? I have 600-700k gold in goods in my gbank/ah/bag atm, with only 100k gold liquid. I regret going that low in liquid, because if a TGC mount pops up, I want to be able to buy it. That beeing said, I have yet to break 300k liquid, I tend to invest crazy amounts in something new every time I get close. :O
    Every friday I post some statistics on what/how much I've sold the last week; MySales Weekly Statistics
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  9. #9
    Aeg's Avatar
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    Quote Originally Posted by Sinshroud View Post
    I actually really dislike stockpiling.
    Simply because I can't stand not remembering 2 years later how much I "paid" for the investment and I start getting paranoid wondering if I am actually making a profit or not.
    This is so very true. I am currently in the process of trying to liquidate a bunch of my stockpile in preperation to move over the rest of my toons to a new server and for the life of me I cant remember what I payed for some items.
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  10. #10
    My point was more than just BoEs.

    I.e., there are some things that are smart investments (e.g. Argent pets)

    But for 95% , 99% w/e of the items, they will be work less in the future than now. Be it cinderbloom volatile life, obviously ore gems,and enchanting materials, DMC most everything.

    So yes smart people who can find smart investments should invest in them. But unless you can make rational arguments as to why your item is in the former not the latter goods, it is safer to convert it to gold. There is a headwind of lower prices in WoW that some can overcome but most don't.

 

 

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