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Too much cash to make a profit?

Author
Lolar55
Banana Toaster
#1 - 2012-10-16 10:28:27 UTC  |  Edited by: Lolar55
Hello people, few times now I've seen people post in this forum that past the 10bil mark people have big difficulties making profit with their isk, because they have so much they don't know how to invest it properly??? I've seen people claim you can reach the trillion mark only if you speculate big on the market and I find that hard to believe specially when I've read blogs of people who make 1bil per day by pure station trading not speculating.

So some people claim they start earning slower than faster when they hit bigger cash like 10-15b.

That kind of puzzles me I'm at the 5b mark and via trading I average 250-550m a day(depends if I do it on weekends or not) which is done via station trading for few hours and I even have most of my eggs in few bascets rather than investing in many products which is usually recommended for traders.I can't seem to find what is going to make my earnings slower, because as ones wallet grows he can divercify his cash on many items which in return on theory nets him faster and better income.

So can people share their opinions on the question: Does more money makes more money faster?
Dvesk Sunie
Doomheim
#2 - 2012-10-16 10:50:52 UTC  |  Edited by: Dvesk Sunie
Up to a point. For example i do trading in Rens an now,when i have 15bil i make the same money as i would have 5bil. market hs its limits for profit :)


example: HERE


profit to made during the weekend is phenomenon, because people are playing during weekend a lot more.

Edit: worth mentioning that i dont do speculations, i do regular margin trading.

Stop playing eve, start living it

Magnu Stormhawk
#3 - 2012-10-16 11:28:41 UTC
Lolar55 wrote:
Hello people, few times now I've seen people post in this forum that past the 10bil mark people have big difficulties making profit with their isk, because they have so much they don't know how to invest it properly??? I've seen people claim you can reach the trillion mark only if you speculate big on the market and I find that hard to believe specially when I've read blogs of people who make 1bil per day by pure station trading not speculating.

So some people claim they start earning slower than faster when they hit bigger cash like 10-15b.

That kind of puzzles me I'm at the 5b mark and via trading I average 250-550m a day(depends if I do it on weekends or not) which is done via station trading for few hours and I even have most of my eggs in few bascets rather than investing in many products which is usually recommended for traders.I can't seem to find what is going to make my earnings slower, because as ones wallet grows he can divercify his cash on many items which in return on theory nets him faster and better income.

So can people share their opinions on the question: Does more money makes more money faster?


The issue is not the rate at which actual ISK profit can be earned, but the return on capital invested. Diminishing returns are what people mostly refer to.

Making 5 billion per month with capital of say 10 billion, is 50% ROI per month. It is unlikley that you can scale that when you have 100 billion, to be able to maintain 50% ROI and make 50 billion in profits per month. Your actual profits might go up but the ROI will likely be lower. There is generally considered to be a glass ceiling at which point ROI drops to a very low rate (unless you are superhuman).
De Guillaume
THORN Syndicate
Northern Coalition.
#4 - 2012-10-16 16:11:38 UTC
magnu is making perfect sense.

personally speaking I am still making the same amount of isk now compared to when i had 10b-20b. i can ofc do more now that i have 100b+ but just no time to do that.

more money gives me more option.

Has you ever went so far as chose to go even use want to look more like do?

Vargan Armer
Tribal Liberation Force
Minmatar Republic
#5 - 2012-10-16 16:19:01 UTC
This is the definition of first world problems.
flakeys
Doomheim
#6 - 2012-10-16 21:58:52 UTC
Lolar55 wrote:

So can people share their opinions on the question: Does more money makes more money faster?



Yup ,

We are all born ignorant, but one must work hard to remain stupid.

Sizeof Void
Ninja Suicide Squadron
#7 - 2012-10-16 23:01:10 UTC
Lolar55 wrote:

I can't seem to find what is going to make my earnings slower, because as ones wallet grows he can divercify his cash on many items which in return on theory nets him faster and better income.

Diversifying into many items also takes more RL time to manage. So, your theory only holds if you are willing to expend more of your RL time to trade in more items.

If you restrict your station trading game time to remain constant, you will find that the growth on your earnings will eventually approach an asymptotic limit, even if you trade in the highest demand items with the largest profit margins.

But, from where you stand now, you are not even close to the limit yet, so don't worry about it.
Vaerah Vahrokha
Vahrokh Consulting
#8 - 2012-10-16 23:28:46 UTC
1) Just because you station trade does not mean you are not a speculator.

You are just time-slicing a "scalper" operation so that you don't particularly feel what you are doing.

Proof:

Try flipping from buy to sell orders on any quickly enough falling market and you'll see how you were speculating too (that price would stay constant or rise or - fall slowly at worst).

Example:

Zydrine recently fell by 150 isk PU in a very short amount of time, that is it lost 20% of its value.

Those flipping orders were going long vs a falling knife and lost.


2) When a business model stop working, you can switch to a better one. Rykker Bow and Raw 23 could beat the record performance even on > 100B amounts.

Or

You can just switch to a better scaling business model. There are few, but there are.
Val'Dore
PlanetCorp InterStellar
#9 - 2012-10-17 18:00:33 UTC
When you are self employed, you are the upper limit of your profitability. When you employ a system, there is no upper limit. Unfortunately, nobody in EvE is willing to make someone else money in the long run. Not to mention the trust issues.

Star Jump Drive A new way to traverse the galaxy.

I invented Tiericide

Theodora Stone
Perkone
Caldari State
#10 - 2012-10-22 13:03:40 UTC
Yep, eventually inflation beats your ROI.
Demolishar
United Aggression
#11 - 2012-10-22 15:03:04 UTC
Theodora Stone wrote:
Yep, eventually inflation beats your ROI.


And with the rate of inflation on the one good that matters averaging at 4% over the last 3 years, things can get difficult.