Boxington commented to the RMAH buying: "To me, a real life analog of this situation is person A who starts a lemonade stand to get capital to start a lawn mowing service to get capital to fund ever bigger and more capital intensive enterprises (the key being they ground their way up from nothing). Person B, conversely, takes out a big loan and skips the first 5 steps of grinding to move into a small/medium sized business. Who is more rational, A or B? It's unclear unless you define carefully your definitions, but in no way is it obvious that person B is somehow skill-less, lazy or cheating. In this comparison, person B is the plex to isk converter. One might argue that they skipped the grinding part of the game (going from frigs to destroyers to cruisers, on up) and that is somehow skill-less or cheating, but that would, again, require much more specification on how we ought to play the game (and that will probably be fruitless)."
At first I couldn't answer it, but life answered it. I set up a business plan in EVE. I don't discuss it in detail until it actually works. The product of the plan sell well. I calculated the material prices and saw that they sell cheaper than the product. I figured out that I buy up those which are 10% cheaper than the break-even point, create the product and sell. So I went and start buying it. Then bang, "you can't afford it" or something. I managed to blow all my 150M ISK that is not invested into something already to raw materials. Nevermind, I create the products, sell them and I made 15M. Except, the materials are littering a whole region (I ran out of money before I finished buying in The Citadel), and they are big in size, needing lot of runs with my poor Badger II.
The money is not lost, it's in raw materials and I may even make money by holding them if their price continue to rise. Or I lose if they don't. However I did not plan to invest into them, did not research their future price and to prevent being out of cash I had to sell some books I bought for myself for future learning.
What a moron! What made me do so stupid act? I did not do anything stupid like on the first week when I went from zero to 50M by hauling, mostly rich plagioclase and pyerite. What happened?
The money these good souls gave me conspicuously match to the money "I did not have invested elsewhere". I grown naturally before. I got a small amount in one business and invested into the next. I probably made stupid things but always with little since I did not have more, as the rest were invested into something that proven itself to work, even if with lower profitability than new plan (if works). I had to try my plans out in small and fix the errors. Just because the plan is good, it doesn't mean that it's without "little" technical mistakes. My plan with the production still doesn't look bad, I was just unprepared with the logistics of it. As you naturally grow, you fix these mistakes, polish your plan. You always know where to spend the next batch of profit.
However if you get money from nothing, you put it into something that is not ready yet. You are over your head and will make the necessary mistakes on much larger scale than you should. You must start out at a lemonade stand because when (and not if) you lose a bottle of lemon juice, it will be much easier to stand up than after losing $1M investor money. This is exactly what happened with the .com business around 2000. The internet-based business, the web2 ideas weren't bad. These companies weren't scams or daydreaming idiocies. Yet they went down with lot of investors money, because the people inside did not know how to handle a company of that size. They should have started out small.
If you buy a PLEX in the item shop to have a "fast start", you probably going to waste it some stupid way and chances are that you won't be significantly ahead of those who did not do it. For the same reason I'm sure that financial investment (buying papers without being proficient on the field of the company, just because I my crystal ball told that they'll rise) will cause more bankruptcies and recessions. It gives money to people who can't handle it yet. If they could, they would have it at the first place!
PS: after two weeks of playing my balance:
Liquid: 391M
Buy order escrow: 111M
Sell order worth: 25M (They will sell for that amount, I did not price them high)
Materials waiting for processing: 43M (on current, unprocessed price)
Books, implants that I use myself and won't sell: 87M
Gifts from other players: 400M
So the wealth collected by me is 257M. Considering that a PLEX costs 500M and covers 4 weeks, I'm already making enough to play free. Of course I can't yet as I will invest this money to ships and skills to increase my revenue, but the point is that a totally fresh newbie can trade himself into free-play mode.
At first I couldn't answer it, but life answered it. I set up a business plan in EVE. I don't discuss it in detail until it actually works. The product of the plan sell well. I calculated the material prices and saw that they sell cheaper than the product. I figured out that I buy up those which are 10% cheaper than the break-even point, create the product and sell. So I went and start buying it. Then bang, "you can't afford it" or something. I managed to blow all my 150M ISK that is not invested into something already to raw materials. Nevermind, I create the products, sell them and I made 15M. Except, the materials are littering a whole region (I ran out of money before I finished buying in The Citadel), and they are big in size, needing lot of runs with my poor Badger II.
The money is not lost, it's in raw materials and I may even make money by holding them if their price continue to rise. Or I lose if they don't. However I did not plan to invest into them, did not research their future price and to prevent being out of cash I had to sell some books I bought for myself for future learning.
What a moron! What made me do so stupid act? I did not do anything stupid like on the first week when I went from zero to 50M by hauling, mostly rich plagioclase and pyerite. What happened?
The money these good souls gave me conspicuously match to the money "I did not have invested elsewhere". I grown naturally before. I got a small amount in one business and invested into the next. I probably made stupid things but always with little since I did not have more, as the rest were invested into something that proven itself to work, even if with lower profitability than new plan (if works). I had to try my plans out in small and fix the errors. Just because the plan is good, it doesn't mean that it's without "little" technical mistakes. My plan with the production still doesn't look bad, I was just unprepared with the logistics of it. As you naturally grow, you fix these mistakes, polish your plan. You always know where to spend the next batch of profit.
However if you get money from nothing, you put it into something that is not ready yet. You are over your head and will make the necessary mistakes on much larger scale than you should. You must start out at a lemonade stand because when (and not if) you lose a bottle of lemon juice, it will be much easier to stand up than after losing $1M investor money. This is exactly what happened with the .com business around 2000. The internet-based business, the web2 ideas weren't bad. These companies weren't scams or daydreaming idiocies. Yet they went down with lot of investors money, because the people inside did not know how to handle a company of that size. They should have started out small.
If you buy a PLEX in the item shop to have a "fast start", you probably going to waste it some stupid way and chances are that you won't be significantly ahead of those who did not do it. For the same reason I'm sure that financial investment (buying papers without being proficient on the field of the company, just because I my crystal ball told that they'll rise) will cause more bankruptcies and recessions. It gives money to people who can't handle it yet. If they could, they would have it at the first place!
PS: after two weeks of playing my balance:
Liquid: 391M
Buy order escrow: 111M
Sell order worth: 25M (They will sell for that amount, I did not price them high)
Materials waiting for processing: 43M (on current, unprocessed price)
Books, implants that I use myself and won't sell: 87M
Gifts from other players: 400M
So the wealth collected by me is 257M. Considering that a PLEX costs 500M and covers 4 weeks, I'm already making enough to play free. Of course I can't yet as I will invest this money to ships and skills to increase my revenue, but the point is that a totally fresh newbie can trade himself into free-play mode.
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