Comparrison cost between TF and Taxed POT Villiage Lot

Discussion in 'General Discussion' started by Fenrus MacRath, Aug 5, 2019.

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  1. Fenrus MacRath

    Fenrus MacRath Avatar

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    I am not judging anyone's choice in the Taxed /Tax free debate, I just decided to run the numbers for myself and was blow away. I personally use only taxed deeds, because a 12 year break even point is just outside of what I can fiscally justify.
     
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  2. Spungwa

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    That is basing the depreciation of the tax free deed as becoming zero. Digital assets don't degrade.

    Don't get me wrong, I still think it is a long time, but the real economic value is probably half that time. As the resale value of the asset probably only depreciated to 50% of your new sale cost. However for a more real assessment you have to account for inflation over that time period also depreciating your asset. Predicting this is nearly impossible in a game.

    So my conclusion is you can't make an informed in game economic decision. So don't, make a real life cost (either $ or grinding time) Vs benefit (like the benefits others above have mentioned) and judge on that.

    Regards
    Spung
     
    Last edited: Aug 6, 2019
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  3. Vodalian

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    When I buy something in SOTA, the purpose is a mix of supporting the game and the actual things I buy. I decide an amount now and then and consider it more a contribution than an investment. But I have to agree, after I bought a tax free lot, that peace of mind was worth way more than the actual value of in game taxes.
     
  4. Fenrus MacRath

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    Huh? I am not talking about depreciating the asset at all. I am simply saying that the price in cotos at TODAYS exchange rate means that the price to upgrade a taxable village lot to a TF village lot appears to be 16 years worth of taxes. To further simplify that, I am saying that you have to pay taxes on a lot for 16 years before you start to see any ROI (That means Return on Investment) The rest of what you are saying is just a collection of assumptions and irrelevancies. I do appreciate your condescending tone and baseless conclusions however.

    Thank you
     
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  5. Spinok

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    I sold all my TF deeds. More I deeply sure that price on the TF deeds will go down, mainly by the reason you sound in this topic.
    IMHO most part of new players who would like to buy a deed, will do same calculations and would not buy TF one.
     
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  6. Jezebel Caerndow

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    You would think so, I thought so too, but it is often not the case. Many just want it without doing the math, its just a better deed. Some people think anything that cost more must be better.
     
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  7. Stryker Sparhawk

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    Not to sound personal, more of an observation, but your cash flow is 100s of times more than my own as to the time you spend in the game makes it more efficient for you to just pay the rent.

    As for Spinok and the OP, they are both more RMT and in game merchants so of course a tax free deed takes a longer time to sell than a regular one - they want to spend less time selling the taxed ones.
     
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  8. Spinok

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    After tax fall down, pay the rent is the best choice for almost all players. And making IGG become much easier too. Some people just want TF I understand this + price of TF on most low level ever. I want TF POT castle btw, but for now just cant afford it, somebody could, and its great. Does I want price become lower on all deeds, I think yes. But I would be ok with any price for deeds Port would make. Probably Port could add some bonus for TF type deed. Maybe better deco limits or smth like this.
    P.S. I`m generally not participating on the deeds market, I sold the 5 TF villages I get from Port bundles for the price I could sell it. Also didn`t need such ammount of deeds as I had. Also dont think deeds market is very profitable now and didnt have the plans ever for resell deeds.
     
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  9. Chrystoph Reis

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    I do it for convenience and nothing else, as I own 44 properties ranging from Row to City, across 5 accounts. To maintain taxes on those I would have to play all day/every day and it would interfere with my RL. I pay taxes on 3 of them. So as a POT owner it's a peace of mind thing, and I don't have to log in every single day if I don't want to. Logging in for just the 2 properties aggravates me. So yeah definitely a piece of mind thing.

    Ming youI used to pay taxes... and the first time I forgot to pay on a property with over 500 placed objects on it... the conversions started.
     
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  10. Jezebel Caerndow

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    I get that but the math still stands. If you just bought a mil coin from someone and did it that way compared to buying the tax free deed, I dont know what the math on that is like, never did the math on that.
     
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  11. Stryker Sparhawk

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    I think this thread is more than about math, as this subject has been brought up a few times along the years, maybe more than the OP has been here, so *shrug*, I guess people can do the math again in a few years.
     
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  12. CICI

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    The Rewards Program ($9/USD) gives you 900 COTO's can pay for up to a Taxed castle deed
     
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  13. Spungwa

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    ROI is the rate of return against the investment value. Your formula is based on the investment value falling to zero, which I said is not the case, before you are getting a return.

    Eg

    Buy item for 100
    Resell price of item is 50
    Item gives you 10 per year.
    ROI is 5 years not 10 as the investment still has value.


    Year 0
    Cost 100
    Asset value 50
    Balance =(50)

    Year 1
    Cost 100
    Revenue from asset 10
    Asset 50
    Balance = (40)
    ....

    Year 5
    Cost 100
    Asset 50
    Revenue from 5 years 50
    Balance = 0

    Year 6
    Cost 100
    Revenue from 6 years 60
    Asset 50
    Balance = 10

    This does not include that 10 revenue in year 5 may not have the same value as 10 did in year 1.


    Regards
    Spung
     
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  14. Fenrus MacRath

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    What are you talking about? I think I see that you are either purposely trolling me with this gibberish, or I am trying to have a conversation with a fool. Neither option pays a dividend, so I shall bid you GOOD DAY.
     
  15. Curt

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    In one hangout I feeble remember it as they aimed for the cost Taxed to Tax free should be comparable to 3 years tax. Either I remember wrong or the aim missed.
     
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  16. Elrond

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    We shouldnt have taxe free deeds ( but i understand why we do ) ...instead we should have POT's where owners can allow their residents to live there tax free or charge them .
     
  17. Fenrus MacRath

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    I agree with you completely. That way we could really have an economy of housing, but I am afraid that is a pickle of a different brine.
     
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  18. mystarr

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    @Fenrus MacRath

    Your math is correct but it does not take into account the value of the deed.

    Consider the following two scenarios.

    Scenario 1
    You have 3 million gold

    You don't buy a tax free deed and just use the taxed deed you got as quest reward
    .....
    A year passes

    .....
    You have spent 182,500 gold in taxes (500 gold x 365 days)

    Your total assets are worth 2,817,500 gold (3,000,000 - 182,500)

    Scenario 2:

    You have 3 million gold
    You spend it to buy a tax free village deed
    .....
    A year passes
    .....
    You have spent 0 gold in taxes an you still have the tax free deed
    Your total assets are worth... 3 million gold (assuming the COTO prices don't change etc)​


    I realize deed values will change over time and the value of COTOs will change etc etc. Feel free to modify the numbers as you like to account for those changes, but the tax free deed has value that isn't being taken into account in your calculations.
     
    Last edited: Aug 7, 2019
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  19. Fenrus MacRath

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    I appreciate what you are saying, but that is not the point I am making. Based on the last years depreciation of IGG and COTOS, (Last year I was selling 1 Million IGG for around $140 USD. I recently purchased 3 Million IGG for $36/ Mill. ) There is No way to factor in deed resale value in any reliable manner or any credible indicator that this game will be around or not in 1,3, or 5 years, let alone the 16 year break even mark. That being an unknown quantity, its best if we don't confuse the discussion at hand by trying to factor that in to the conversation. I think it is fair to say that there is as good a chance that the deed value will be anywhere from $0 to Double the price you paid and therefore is a speculation that will be suspended for the simple argument that you will have to pay 16 years worth of taxes to break even against a front loaded purchase of an upgrade from a free deed that you already have. That was all I was trying to verify. Outside X factors not withstanding, I believe my equation is correct and that's really all I was looking for. Thank you for your input however.
     
  20. mystarr

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    Agreed. The future value of the deed is speculative at best.
    • If you already have 3 million gold (or 199,000 COTOs) you lose nothing by buying the tax free deed.
    • If you don't already have the 3 million gold (or 199,000 COTOs) and are thinking about buying it for real $ then yes, you are looking at a long time (and/or speculation on the future value of the deed) to get your $$ worth out of the purchase.
     
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