Tales of the Rampant Coyote
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Wednesday, February 20, 2008
 
Can Playing RPGs Make You Rich?
I went to an "investors club" meeting of sorts tonight. It was founded in part by an old college buddy of mine - a fellow Dungeons & Dragons player and medievalist who got the bug up his butt about three years ago to get involved in real estate and other forms of investing, and has been doing that full time ever since. He has managed to do pretty well for himself and his family.

The event was... well, it was a whole 'nother world, folks. I was struggling to grasp the jargon at first, in spite of having some basic familiarity in other areas of investing (hey, I listen to some of these books-on-tape while commuting to The Day Job). They discusses strategies, taxes, threw around investment opportunities (many of which had minimum investment levels that were outside of my budget). They asked questions of each other I didn't know to ask, but by the end of the night I was getting a pretty good feel for things and understanding their answers.

In fact, I found it way more familiar than I expected. A weird realization hit me.

These guys are GAMERS.

Investing for Munchkins
No, maybe they didn't all spend their college or high-school years slinging dice next to miniatures like my friend and I did. Though apparently some of the people in the group, according to my friend, are avid video game players. But I found myself very familiar the tone of the discussion. I've been in enough game stores,RPG discussion forums, and on the periphery of World of Warcraft raid postmortems to recognize the familiar patterns in the discussions. The questions asked were new to me, the actual jargon was a learning experience, but if you change the words around these guys could have been powergamers (or, to use a less flattering term, munchkins) discussing their perfect character build or raid strategy.

In popular RPG terms, they were level 10 and I was a level 1. They slung around terms as carelessly as hardcore RPG players might sling around terms like "Armor Class," "DPS," "Drop Rate," and "Dex Bonus," which took me a little while to grasp.

They discussed opportunities. They argued risks, historical yields, comps, and the current state of the real estate market in Las Vegas (their term was "interesting," which I gathered was a euphemism for "don't touch it unless you know what you are doing.) They have figured out ways of making money regardless of what way the market goes - up, down, or sideways. Risky, but impressive. The opportunities were thrown around the room much like the stereotypical patron NPCs in stereotypical taverns would toss around quest and plot hooks for the next adventure.

And this made me think some more... could certain games - the stat-heavy RPGs and strategy games, in particular - be good training for the neural pathways, analytical skills, and behaviors necessary to succeed in the investment world? Are those annoying RPG munchkins actually best suited, with some education, to become real estate tycoons? Could those get-a-lifer raid leaders in World of Warcraft be suited to be get-a-lifer currency traders? Could the girl who just kicked your butt in Age of Empires also kick butt in the stock market for real-world stakes? Do those skills translate?

Gaming Skills = Getting Rich Skills?
Maybe. I asked my friend about this, and he agreed. He went over several things he learned from playing D&D (pen-and-paper) that he felt really helped prepare him for investing. He also said that this was the second time this week that someone asked him if Dungeons & Dragons has helped him in practical life.

"D&D is definitely where I gained my comfort with charts and calculations. I think from there I became a wiz at spreadsheets in corporate america. From there I used the same skill to create spreadsheets to evaluate properties once I had established my own Real Estate Strategy," he told me. He then went on how things like creating a character (we won't mention min/maxing here...oops, I just did) helped him both in investing, time management, and as a filmmaker in his previous career in terms of fitting things within budget, and reaching an optimum balance.

"At the same time I learned that absolute strict adherence to the rules could be too 'clinical' and while staying balanced with the rules of the game it was also possible to realize what didn't work for our particular situation and make appropriate adjustments as situations arise," he told me, possibly pulling from some "Dungeon Mastering" experience. "This obviously translated well to my investing techniques. I learned several different 'methods' of investing. Learned the balance of all of them. Then created my own 'techniques' talored to my situation while keeping in balance."

Leveling Up In the Real World
Obviously, it takes more than just playing video games and pen-and-paper RPGs or strategy games. It takes directing some of that passion into another focus. But hey, my friend still plays D&D - in fact, he has more time for it now than he did even back in college.

So, gamers: if you are one of those weirdos who like talking about your characters, game balance, build orders in popular RTS games, your best raid gear or character builds, optimum combat strategies for your party against a Pit Fiend, you may be primed to score the "phat l00t" for real. You may not only be trained to excel in these areas, but you may also find they match your particularly warped gamer sense of fun.


(Vaguely) related applications of my lack of l337 gaming skillz!
* The Secret of Success: It's All In Your Mind(set)!
* Playing to Crush With Life
* The Power of Vision

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Comments:
"And this made me think some more... could certain games - the stat-heavy RPGs and strategy games, in particular - be good training for the neural pathways, analytical skills, and behaviors necessary to succeed in the investment world? Are those annoying RPG munchkins actually best suited, with some education, to become real estate tycoons? Could those get-a-lifer raid leaders in World of Warcraft be suited to be get-a-lifer currency traders? Could the girl who just kicked your butt in Age of Empires also kick butt in the stock market for real-world stakes? Do those skills translate?"

I've always thought so.
 
My husband briefly played spreadsheet king on EVE online, making vast (ingame) profits trading commodities across sectors, juggling all sorts of variables not just about how much profit you could get from a trade but how long the trade would take to accomplish... After watching him at work for a while it seemed strange that the other people in the game *weren't* doing that.

He keeps wanting me to let him have a pile of real money to try the same thing in actual markets, but I'm instinctively nervous...
 
You forget that like a game, much of the financial world is make-believe also. For every dollar invested in a solid company or a house, there are 50 dollars in bets, hedges, and derrivitives where the value is 'notional' and is the result of a calculation or simulation. The money itself is a cyber-cration, with only 2% of the dollars in the world having a corresponding coin or bill at best. You're more correct than you think. It is a big game that those people have created for themselves. The problem is that when they loose (like they have been lately-- perpetual motion machines dont work even in their imaginary world) people in the real brick-and-mortar business world suffer hugely. And that means you will feel it in your degraded life-style when their latest dungeon raid fails in New York.
 
@Whiner - the most important advice I have learned so far is
1) Get in the game - learn what you can in advance, but don't wait or you'll be waiting forever, and
2) Start small - don't put in what you can't afford to lose.
3) Don't put all your eggs in one basket (but don't over-diversify either)
4) Don't gamble. The guys who seem to be doing the best at it do a lot of "risk management," expecting some failures, but their idea of "risky ventures" tend to be less risky than what Joe Average thinks make sense. They naturally try for the home runs, but the strength of their portfolio rests in what they sometimes call "base hits" - the not-very-sexy but consistent performers.

But I'm still pretty new to all this, myself, as all I've invested in the past has been in IRAs, Mutual Funds, and 401ks.

@Anonymous - To an extent, a lot of the people who have written on the subject of investing would agree with you, I think. Money is artificial, a convenient fiction which we nevertheless live or die by. But if you look at the quality of life benefits we've reached due in the last 100 years, we're way more productive, live longer, and enjoy far greater comforts than ancestors could have imagined - and that's largely due to the economy.

Besides, my lifestyle took a hit in the last recession due to being forced to take a lower-paying job, rather than anything I'd had invested...

And the guys I've found who are the "true" investors, I guess, have a very different attitude towards the economy, recession concerns, and so forth. As I mentioned, they know how to make money no matter how things are going. An economic downturn and poor housing market smells like opportunity to them. And that's just a cool attitude.
 
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