Just like many in our today's society, people in Maplestory are stuck in the rat race. When they find something profitable and risk-free to do, such as mining ores, they sell it for mesos andkeeps repeating the process, just like how many people nowadays wish to find a stable job, get a monthly paycheck, and use the paycheck to buy things that they desire.
In Maplestory, after a person mines ores, smiths them and sell them, he makes approximately 20m per hour. However this can only be done 3 times a day for 10 minutes each time, resulting in a total of only 10m in the time spent. After approximately a month, he finally has enough mesos to buy his desired agares bloody spear. He spends his 300m on the spear, momentarily satisfied that his range went up by about a thousand. This is pretty much similar to real life incidences where people, upon receiving their paycheck, spend it all paying bills, taxes, and lastly, the LCD television that they had always wanted, leaving themselves with just enough to buy their daily necessities (Just like potions). In short, upon receiving money, this person spends it on liabilities, without thinking about building up on assets which can further improve his passive income. In order to make money work for you, one must allocate a suitable amount of his income into assets.
So, what are liabilities? What are assets? What is passive income?
Liabilities are things that you probably enjoy having, but do not generate money for you. Liabilities are things such as the LCD television as mentioned above, a brand new car that you intend to use (not rent out), an Xbox, or perhaps expensive clothing. In Maplestory, liabilities are things such as the spear as mentioned above, once equipped, can’t be traded anymore, and when you have a better weapon, you will eventually just throw it away. Even tradable items such as giant potions are liabilities too, as they only have one use, which lasts for only 45 seconds, and are considerably expensive for those 45 seconds of fun.
Assets are things that generate money for you, either as an investment, or as an income. Assets are things such as stocks, real estate, and securities. In other words, whatever that increases in real value over time, or generates passive income for you, are assets. Passive income is income you get by investing, while active income is income such as the paycheck that people receive at the end of each working month. All one needs to do is to invest his money in something, rent it out, and he gets passive income back every month. If you are worried about being unable to find a tenant, why not just invest it in blue-chip stocks that give a dividend higher than the inflation rate, or at least higher than that of the interest rates of banks? Sounds simple enough? Then why isn’t everybody doing so? It probably is due to the fact that the results of such investments cannot be seen in the short term, and the risks put people off. Besides, people are greedy and always want to buy more things that they feel will help improve their lifestyle, instead of using it to make more money to be used in the future. Of course, putting your money in the bank in Singapore will only cause you to lose real money since the inflation rate is so much higher than the interest rates.
An example in Maplestory would be investing in extractors (was worthwhile back in 2011-2012, now it is not). Extractors are machines that can be set up, just like vending machines. People pay you in order to help them to extract crystals out of their unwanted equipment, and the best part is, you don’t need to be at the computer, all you need to do is to afk (Away from keyboard) and leave Maplestory on.
In order to create an extractor, one needed a base capital of 7 million to buy the recipe which would last forever, 2 hyssop flower oils which cost about 500k each, 10 advanced item crystals which cost about 50k each (Yea, advanced item crystals are cheaper than intermediate item crystals due to a much lower demand), and 3 yellow powders, which people often drop as they isn’t much of a use for it. So in total that would mean 8.5 million cost price for the first time, and a cost of 1.5 million per subsequent extractor crafted. Each extractor lasts for a day, and it generates about 2 million per hour, leading to it earning money for you without you needing to do anything at all. Just like vending machines, all you need to do is put it in a good location, stock it up, and profits will come rolling in. Of course sometimes the machine would require maintenance, but over time the profits will be more than the start-up cost and the maintenance cost.
Apart from investing in things that generate passive income, investments can be made in things where its real value will only increase over time, such as real estates in prime-land. One thing great about real estates are that not only do they increase in value over time; they also can be rented out for more passive income, definitely a win-win situation. To relate it back to Maplestory’s economy, things such as enjoyable winters (an item, if it is misleading, just replace it with lollipop) which provide 1.5x experience boost for half an hour, will only increase in real value until the game decides to release more into the system. Why is it so? Enjoyable winters are one-use items, meaning that once you use it, it is gone forever and you get the buff for half an hour, thus meaning that there will be less enjoyable winters in the system as time progresses. Apart from Christmas events and special giveaways, enjoyable winters cannot be obtained from monsters or from NPCs, and the only reason why the prices of enjoyable winters are still reasonably low and affordable to the middle-upper class, is due to market competition, which I will be explaining more about in the 5th chapter. I recently made 5 billion from this investment, as I simply put my money on 100 enjoyable winters when they were priced 45m each during the peak of the giveaway (when the supply curve shifted to the right, and the prices of enjoyable winters dropped by 5 times). After about 2 months, many winters were already used up and the price started to rise again as there was no production at all, and the only supply came from people like me who stocked up on enjoyable winters. The price went up to 100m following which I released my stock since Christmas was coming and I was expecting a huge production of enjoyable winters in the system (The giveaway event was in august). The price indeed did take a fall to 80m, and that was not due to Christmas, but a very unexpected ‘event’ that occurred, of which I will elaborate more about in my last chapter.
Apart from investing correctly and letting your money earn more money back for you, you can instead use your money to pay people to work for you (In other words, money is working for you), saving you opportunity cost. One example (This is just an example that is highly unlikely in real life as an increase in supply would lead to a decrease in prices, but let’s just take it at face value so that it would be easier for me to bring across my point) would be Person X, Person X makes money by giving private tuition, and he sets up his own small private tuition center, and is the sole employee of his one man business.
Scenario A, Person X is able to give about 3 lessons a day, 1.5 hours each lesson, and each lesson earning himself 200 dollars. He spends 1.5 hours each day settling admin affairs and 2 hours creating lesson materials to teach to his students. In other words he makes 600 dollars a day.
Scenario B, Person X decides to employ a part-time worker to settle the administrative affairs for him. By paying his part-time worker 20 dollars an hour to settle his tuition’s administrative affairs, he frees up 1.5 hours of his time for just 30 dollars, of which can be used to teach another lesson, giving him a net profit of another 160 dollars a day. 770 dollars a day? That isn’t enough because greed is good.
Scenario C, what if he paid a monthly subscription to a website which provides him with the necessary notes he needs to conduct his lesson? Then he would free up another 2 hours of his time daily. Presuming that the printing fees and subscription fees cost $1500 a month, that is the amount of money he pays to free up another 56 hours (Presuming one working month has 28 days, and tuition can be given on any day including weekdays and public holidays), So, he is able to give 5 lessons a day, with an extra half an hour to spare.
Let’s calculate the total amount of money he earns in a working month for the 3 scenarios:
Scenario A: $600 x 28 = $16,800 a month
Scenario B: $770 x 28 = $21,560 a month
Scenario C: $970 x 28 – 1500 = 25660 a month, and a total of 14 hours more free time.
Time for the killer.
Scenario D, what if this amazing Person X decides to employ 2 tuition teachers to teach for him? He proceeds on to pay the tuition teachers 80 dollars per hour (quite a lot eh?), 120 dollars per lesson, and in the process free up ALL his time working. In other words, all he has to do is to pay his workers, and collect money from his students. Let’s do the calculation:
Scenario D: He earns (200x5) – (120x5) – 30 = $370 a day, and $10,360 a month. Simply just by letting money work for him, he earns more money in the process. This can be called passive income, as money continuously goes into your pockets without much effort needed (Apart from the start). The rest of the time he has can be used on playing Maplestory, or setting up an empire of tuition centers, of which the latter seems more likely.
To relate it back to Chapter 2, by using the capital I have, and paying people to get the raw materials for me, I am basically doing the same thing as Person X, and earning mesos simply just by collecting the raw materials, clicking a few buttons, and passing it to my business partner to sell it for me.
In conclusion, money is an excellent driving force (or should I say, greed?), and when properly utilized, will bring about more returns than simply spending it on liabilities or keeping it in the bank.
End of Chapter 3
Click above for Chapter 4