*The following will be included in “Fictive’s Talents and Templates 2″ to be released before the end of the year.*

Wealth Management allows a character to invest in something that is not totally safe, but can generate money on a quarterly basis.

Upon leveling, the character can forego the +1 to an attribute, and invest up to 1,000 gold pieces in an enterprise at Risk 1. Once a quarter, the investment generates 5% earnings (or succumbs to Risk.)

The enterprise can be an orchard, a coaching inn, a share of a trading ship, or whatever seems to be a good opportunity at the time.

Before generating profit, the DM rolls 1d10; rolling above the Risk rating, income is generated as normal. Rolling equal to or less than the Risk rating, the DM rolls 1d10 x 10% and that’s the loss the investment takes.

The default Risk is 1. However, each additional Risk point the character adds also adds another 5% earning every quarter. A character with Risk 4 would be generating 20% profit a quarter–assuming Risk didn’t wipe out the investment.

An advantage to this background is that the character can own part of the game world, and make profits based on that (or accept risks, possibly leading to adventures). Sometimes characters can’t spend their loot fast enough, and they are carrying around sacks of gold; well, there are no banks as we know banks, and it is inconvenient to hide the money in a hole in the ground in the woods. Investing can look like a safer option. And they periodically get paid! (If you play long enough.)

Is it for everyone? Well, no. But it’s a cool option to have available in the background for the adventurer who may someday retire or has a great opportunity open up during game play. Like buying the inn they usually use in their travels, or refurbishing a dungeon environment as a prison, or building a watch tower in a dangerous mountain pass.

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This is an excellent idea that can also increase understanding of investing in real life. Kudos!

If I read this correctly, though, you will over time lose money.

At Risk 1 you have a 10% chance of losing 55% (mean) of your investment, vs. a 90% chance of earning 5% profit. -5.5% vs. +4.5%.

At Risk 2 you have a 20% chance of losing 55% of your investment, vs. an 80% chance of earning 10% profit. -11% vs. +8%

At Risk 3 you have a 30% chance of losing 55% of your investment, vs. a 70% chance of earning 15% profit. -16.5% vs. +10.5%

At Risk 4 you have a 40% chance of losing 55% of your investment, vs. a 60% chance of earning 20% profit. -22% vs. +12%

Let’s extend this a little:

At Risk 5 you have a 50% chance of losing 55% of your investment, vs. a 50% chance of earning 25% profit. -27.5% vs. +12.5%

At Risk 6 you have a 60% chance of losing 55% of your investment, vs. a 40% chance of earning 30% profit. -33% vs. +12%

At Risk 7 you have a 70% chance of losing 55% of your investment, vs. a 30% chance of earning 35% profit. -38.5% vs. +10.5%

At Risk 8 you have an 80% chance of losing 55% of your investment, vs. a 20% chance of earning 40% profit. -44% vs. +8%

At Risk 9 you have a 90% chance of losing 55% of your investment, vs. a 10% chance of earning 45% profit. -49.5% vs. 4.5%

At Risk 10 you have a 100% chance of losing 55% of your investment, vs. a 0% chance of earning 50% profit. -55% vs. 0%

(At Risk 0 you had a 0% chance of losing 55% of your investment, vs. a 100% chance of earning 0% profit. 0% vs. 0%)

The numbers don’t look very favorable to high risk — in fact, unless you get lucky, in the long run you’re better off just holding your money, all else being equal.

However, things that might help:

Change the amount lost to be proportional to the risk taken, just as profit is. 10% per point of risk, vs. 5% profit per point of risk. Then you have:

Risk 1: 10% of 10% loss, vs 90% of 5% gain: -1% vs. +4.5%

Risk 2: 20% of 20% loss, vs. 80% of 10% gain: -4% vs. +8%

Risk 3: 30% of 30% loss, vs. 70% of 15% gain: -9% vs. +10.5%

Risk 4: 40% of 40% loss, vs. 60% of 20% gain: -16% vs. +12%

Best advantage is held at Risk 2, though luck may come through at higher risks — perhaps specific ventures instead of the entire enterprise?

However, normally you’d want higher payout for higher risk; linear gains don’t really look right (and are boring). I’m not certain what a good curve would look like. I considered something geometric (doubles at each step) but I didn’t much like it. Perhaps 5%*Risk*Risk? At Risk 4 you have a 40% chance of losing some amount, but stand to gain 80%. At Risk 5 you’ve got a 50-50 chance of losing, but stand to more than double it (+125%).

Again, consider that for specific ventures instead of the enterprise as a whole. And I would probably have Risk 5 be ‘lose it all’ on failure… and Risk 6, you lose more than the value of the investment — built-in adventure situation at this point, since someone’s likely to be coming for you.

Just some thoughts.

Good thoughts! This is a draft, and your reflections are very helpful. I want the characters to be able to invest somehow, and I think you’ve pointed in some useful directions there.

One way to get at the boring part might be to add some dice to it; instead of dealing in percentages, deal with a multiplier on the amount invested, and then add or subtract dice to roll. So a loss might be 5d10 x5, for example. That would keep it from being as boring, perhaps, and avoid a situation where all DMs are expected to be able to quickly generate and apply percentages of investments (which isn’t fair in a game like OSH.)

I’ll take another crack at it. Thanks again for your thoughtful analysis.