How do i make more money?

[unmerged(29218)]

A bit of a sidetrack perhaps, but:

Definitely mint to build tax collectors and manufactories

I have not undertaken rigorous calculations (might try that tomorrow), but for tax collectors I believe that there are situations where taking a loan in order to afford them is better than minting. That is, of course, provided that your improved census taxes are able to repay the lion share of the loan.

Sweden, for example, appears to benefit from such a tactic. In a handwaving way, I suppose that having many but poor provinces is what makes this worthwhile.

 

[DSYoungEsq]

It is excellent advise. Think about it logically. I move the slider right and accumulate five years of monthly income into my treasury. Then I buy something nice that will increase my income for this. After on average 25 years I will get an exceptional year and the inflation is wiped out. All I lost was the 5% increase of cost during these 5 years while the investment I made will generate wealth for the rest of the game. Aaaaah!

Incorrect. What you will experience is 20 out of 25 years where you are paying the added 5%, plus an added year with 4%, two with 3%, three with 2%, and four with 1%. And all this is simply on the assumption that you will get a 5% inflation score decrease roughly every 25 years.

Here is another possibility: accumulate sufficient ducats to pay for most anything you wish to purchase, and then get inflation to near 0% and keep it there. Live within your means, but use your treasury float to pay for expensive one-time items. Rebuild that float over time. In the long run, you will pay less this way.

And, as I noted, the objection I had was not to the concept of accumulating inflation as needed. It was with the concept of accumulating inflation solely to make sure you don't get "shafted" by an exceptional year event occuring while you have less than 5% inflation. :wacko:

 

[unmerged(29041)]

Incorrect. What you will experience is 20 out of 25 years where you are paying the added 5%, plus an added year with 4%, two with 3%, three with 2%, and four with 1%. And all this is simply on the assumption that you will get a 5% inflation score decrease roughly every 25 years.

The deflactionary event is just the icing on the cake. It has been demonstrated quite convincingly in my opinion, that minting to buy a manufactury is very worth it until it is quite late and they become very expensive (>5000)

Here is a link with Doktarr's analysis

and here is Isaac Brock's analysis:

OK following doktorr's analysis, which is closer to exact than almost any other version that you're likely to see:

Cost of the Manufcatory is 1000d. Assume it's paid for out of monthly income. The inflation increase will be:
Income Inflation
10 8.3%
50 1.67%
100 0.83%
200 0.42%
500 0.167%

Now assume that your census income is six times your monthly income (which impies quite early in the game to have such low trade and production income, but which is sort of a worst case). The annual cost of the additional inflation you've just incurred is I/(1+I)*(income) where I is the inflation. So:
Income Annual Inflation Penalty
10 13.8 d
50 14.8 d
100 14.8 d
200 15.1 d
500 15.0 d

And you lose that much purchasing power each and every year. The income that you will get from the manufactory will be 66d per year, times the inflation multiplier (1/(1+I)*66. This corresponds to
Income Manufactory pay off
10 60.9 d
50 64.9 d
100 65.5 d
200 65.7 d
500 65.9 d

As you can see, in all cases the annual cost of the inflation is much less than the payoff of the manufactory.

edit: And if you throw in the trade efficieny (assume trade accounts for 25% of monthly income, a pretty crappy assumption when the overall income sizes are so different) the additional payoff is:
Income Trade efficiency payoff
10 0.3 d
50 1.5 d
100 3.0 d
200 6.0 d
500 15.0 d
Although if you're really getting 125d a month in trade you're doing very well, and if you can only get 2.5d with 10d income to play with you're doing rather badly.

So, mint, mint, mint, invest, invest, invest. The first century sets the basis for wealth. With some countries it could be well over 20 years to save from census for a manu, and a lot of things will happen that may delay it even further. Mint for TCs (pending Hordenvile analysis), mint for FAAs and above all mint for Refineries. The inflation will go sooner or later, but the improvement to your economy lasts until 1819.

 

[unmerged(31953)]

Its kinda useless to be 20% richer than everyone if everything cost 20% more...

 

[unmerged(29041)]

That's why you have to be 50% richer than everybody else at 20% inflation.

 

[unmerged(6147)]

Incorrect. What you will experience is 20 out of 25 years where you are paying the added 5%, plus an added year with 4%, two with 3%, three with 2%, and four with 1%. And all this is simply on the assumption that you will get a 5% inflation score decrease roughly every 25 years.

Correct that it was for 20 years. I did not check what I wrote. Bad by me. I have edited it into my previous post. The few other percentages you mention are also correct but on the other hand I might start investing the money a little bit earlier than after 5 years so this probably just about makes up for that.

Here is another possibility: accumulate sufficient ducats to pay for most anything you wish to purchase, and then get inflation to near 0% and keep it there. Live within your means, but use your treasury float to pay for expensive one-time items. Rebuild that float over time. In the long run, you will pay less this way.

This is pie in the sky. Yoy cannot accumulate "sufficient ducats for most anything". What are you, a "politician"? Of course, if we all could get enough ducats just by using the census taxes we would all be content with that.

And, as I noted, the objection I had was not to the concept of accumulating inflation as needed. It was with the concept of accumulating inflation solely to make sure you don't get "shafted" by an exceptional year event occuring while you have less than 5% inflation. :wacko:

I always move the slider to the right when my inflation takes a dip below 5%. And I always find something nice to invest the money in. Isn't that strange that you appear not to find these juicy investments Perhaps a little wacko smiley in return is appropriate here, yes I think so, here it goes: :wacko:

Now I believe Kb will come and close this thread...

 

[DSYoungEsq]

To Fodoron: The reason that both doktarr and Isaac Brock are not completely accurate with their calculations is that they are only comparing the cost of the manufactory to the benefit of the manufactory. But inflation affects everything you purchase. It affects your technology costs. It affects the cost of raising new military units. It affects the cost of colonizing. So the "cost" of minting to produce ducats sufficient to buy a manufactory is not just the reduction in value to the output of the manufactory. The cost is the reduction in purchasing value for everything you purchase, technology research included.

Thus, as an example: I am playing a game where my country annually spends roughly $2500 a year. Assume that I am at 0% inflation. I decide to divert my $200/mo. in monthly income to the Treasury for one year, in order to purchase a new manufactory (in this case, let's assume a refinery). After one year, I go back to my policy of not minting anything. What is the cost of my action?

For the coming year, my cost is 25d (24.75 to be technical, but let's round for kicks and giggles). That is, everything I spend money on has just become 1.01 times as expensive, but I don't have any added income to throw at the same expenditures. My purchasing power decreased; the extent to which it decreased is my "cost." And that cost will exist each and every year that that 1% of inflation hangs around. Worse, that cost will also increase in terms of actual per year numbers, because as I expand my "business" (my nation), my increased expenditures will always be behind by that 1%.

So I can't just say: well, I mint to make 2400, I spend it on a refinery, and I make that money back in x years, so I am ahead of the game. I have to take ALL costs into account. And I can't really do that, excepting I use a crystal ball, because who knows what costs I may incur during the future that I am stuck with my lovely little 1%? And that's not even addressing the extreme difficulty in determining the extent to which my purchase ends up increasing my income in the future, compared to how it would have increased had I not minted then spent the money on a refinery, which is, of course, what I am striving for by using this method of paying for it.

I repeat what I have said before: you mint for only two reasons. Either you mint because you must (can't enjoy cost savings if your dead), or because you choose to accept the cost penalty to accelerate your efforts to expand, having some relatively rough idea in your mind that you are going to come out ahead in the long run.

To Daniel A.: At early stages of the game, minting is almost always necessary. Practical circumstances dictate it. But I am quite certain that, by the time you have reached Infra 5 and promoted your governors, you are obtaining sufficient income to amass any amount of money you wish, unless you are the type who just can't help spending so as to engage in obtaining just a little more lebensraum.

Finally, your statement that "I always move the slider to the right when my inflation takes a dip below 5%" shows that you engage in precisely the sort of inefficient economic thinking my original post debunks. You are only doing so to maintain a mythically important 5% so that you can receive the full benefit of certain random events. 2% or 20%, it's all the same when it comes to deciding whether to mint or not; who cares about "5%"? (Insert VERY appropriate wacko smiley here)

 

[unmerged(22732)]

The cost of capital is never too high if you know what you're doing. I didn't say go mint money and declare a needless war.
Minting money
1) to build tax collectors
2) to build 12 ducat manufacturies
3) to capture that CoT nearby
are worth it.

4) To make that heroic counter attack to the france-australian-poland-lithuania alliance being 10 land techs behind is a waste on the other hand(I played and learned).

It is of course important how much money you make a month. If you are a one province kingdom and earning only 5 ducats a month a whole year minting will only give you an extra 60 ducats. But if you're big earning 50-100 ducats then the picture changes drasticly.

I always raise the inflation to 5% whenever the event hits me and in all my games I end up with ten thousands of extra cash.

How can the anti-inflation theory be right if I'm ALWAYS ending up with extra cash???

 

[unmerged(9146)]

So I can't just say: well, I mint to make 2400, I spend it on a refinery, and I make that money back in x years, so I am ahead of the game. I have to take ALL costs into account.

As far as I remember, doktarr's analysis takes all costs into account and makes very conservative assumptions about how they are going to change.

Finally, your statement that "I always move the slider to the right when my inflation takes a dip below 5%" shows that you engage in precisely the sort of inefficient economic thinking my original post debunks.

Boy, I hope you don't play bridge, or your partner must really curse you.

There are deflation events in the game. You can estimate how often they happen. Daniel's estimate of once every 25 years is pretty accurate after 1650. Early on it happens not so often, but still you should expect one about every 50 years. That means that maybe you can expand on your census taxes alone, but if you can expand faster by minting, then the breakpoint when it's profitable to mint will be before you reach the extra revenue matching your inflation - for every 5 points of inflation you make, it's beneficial to get maybe extra 4 points or so of revenue - because revenues stay, and you should expect inflation to go away by itself.

It's not to say that you should mint because else you "waste" the deflation event - we can both agree that this reasoning doesn't make sense. But there are random events that will decrease your inflation - it's the game of expectations, you have to take this fact into account. If you mint, then on average you will bear the cost of increased inflation for 30-40 years only.

I always raise the inflation to 5% whenever the event hits me and in all my games I end up with ten thousands of extra cash.

It's not much of a problem to end the game with tons of cash - I would rather ask how you are doing technologically? Do you lead the world in every single technology? Do you manage to max them out? If so, at what point of the game? Inflation increases all your costs, including research.

 

[unmerged(22732)]

It's not much of a problem to end the game with tons of cash - I would rather ask how you are doing technologically? Do you lead the world in every single technology? Do you manage to max them out? If so, at what point of the game? Inflation increases all your costs, including research.

I'm a centralized and innovative player. The 5-10% from inflation has never bothered me. As all good players do, I research to refineries, mint, build my 12ducat refineries, research to mayors, mint, build all my mayors. THEN switch to land. With refineries trade tends to catch up on itself. At land tech 9(the assault tech), I switch again to infrastructure in order to build the textile manufacturies. At that point I check my opponents land/naval techs and play it accordingly. Usually I finish all tech 10-50 years before the end of game.

This is of course v1.08 latest patch playing europe countries (Played papal states, scotland, gelre, saxony, savoy, byzantium and ottoman empire). Gonna try Loraine next I guess.

 

[Chaingun]

I can say the deflationary event is a very poor thing to put your trust to. In my current MP game as the Ottoman Empire, I haven't got one in about 80 years this far, and inflation is at 16% for several reasons (though I managed to increase income accordingly). It has also occured in another MP game that I did not get one in 200 years (that sucked even more because I had taken over Brandenburg with 10% inflation that I did not incur myself and the previous player did to no avail). Also, when you say "mint to get free money", you must understand you miss out on a corresponding amount of technology investment. If a trade level is delayed five years because of full-blown minting, you better make sure you can make up for that later on or you will have a loss at your hands. Then again, political and military costs are very difficult to measure, especially in MP. To war your main enemy to pieces at the cost of a couple of points of inflation may very well be worth it in the long run, despite horrendous economic costs. I think this is less of an issue in SP however.

In the end, it mostly boils down to having the right "feel" for when inflation is too high. This also applies to when making the choice of what to invest in. Generally, you do not have time to make a number analysis and calculate the most profitable invest in real time; hence it is necessary to acquire the ability to make good judgements based on experience. Experience you get from playing the game, so go playing instead of talking in the forum.

PS. Maxing out income is not necessarily the most fun part of this game. In SP you can probably ignore that part too much if you want to if you play a stronger country (as long as you consider some fundamental concepts such as tax collectors and basic technology investment).

 

[unmerged(6147)]

To Fodoron: The reason that both doktarr and Isaac Brock are not completely accurate with their calculations is that they are only comparing the cost of the manufactory to the benefit of the manufactory. But inflation affects everything you purchase. It affects your technology costs. It affects the cost of raising new military units. It affects the cost of colonizing. So the "cost" of minting to produce ducats sufficient to buy a manufactory is not just the reduction in value to the output of the manufactory. The cost is the reduction in purchasing value for everything you purchase, technology research included.

We have had an almost endless number of threads about inflation. Many of them long before you joined our community. And the idea that inflation put a penalty on the cost for everything has been thoroughly looked into, not the least by Isaac Brook who is one that understands this better than most of us do.

To Daniel A.: At early stages of the game, minting is almost always necessary. Practical circumstances dictate it. But I am quite certain that, by the time you have reached Infra 5 and promoted your governors, you are obtaining sufficient income to amass any amount of money you wish, unless you are the type who just can't help spending so as to engage in obtaining just a little more lebensraum.

Exactly. With a christian nation one normally reaches infra 5 somewhere during the latter part of the 16th century and then it is time for taking on the pagans all over the world. That costs some money. And then they shall be converted. And that costs money. And all the colonising... If I just had sat on my a-s using the census taxes only this would not be possible. And the yearly income growth percentage would not be the same. That's for sure.

Finally, your statement that "I always move the slider to the right when my inflation takes a dip below 5%" shows that you engage in precisely the sort of inefficient economic thinking my original post debunks.

I just want to point out a misspelling in this paragraph. Before the word efficient you accidently inserted a "in"-prefix. I will be indulgent about this.

BTW, I would like to mention what Peter Ebbesen, of whom you may have heard, said in post 21 in this thread

(http://forum.paradoxplaza.com/forum/showthread.php?t=129747&page=1&pp=25&highlight=inflation)

to another confused player:

"Poor you. A zero inflation strategy is not only boring [in my not particularly humble opinion], it is also nearly always economically suboptimal."

 

[unmerged(25696)]

DSYoungEsq,

I'll expose a simple example.

Suppose you've an income (total) of 1000d per year, inflation at 0%, and manufactury cost 1000d.

You mint one year to build a manu. Result : 1% inflation.
Effect of a manu : 12d income (per year - I suppose an appropriate province), and 60d tech investments. Total increased income : 72d. Compared to 1000d, that's a 7.2% increase.

So, all your costs have increased by 1%, while your income has increased by 7.2%. This is a net increase in your purchasing power of 6.1%. Because even if it's true that the added costs will endure (tough it might disappear the next year), you greatly expanded your income, and your income will last at least as long as your inflation (unless a fire destroys your manu, but this event is even rarer than the Exceptional Year events).

And to quote the famous Professor :

Being helpful and answering the same fundamental questions three years after the release of the game does tend to grow old. That is not to say that all threads in the EUII General Forum are rehashings of old threads and issues, of course, but a lot of them are and understandably so when the game continues to attract new players. And yet... How many times can one explain that inflation is not the mark of the beast and that 2500d (or more!) is a reasonable price for a manufactory in many cases (and support it with good mathematics) before it gets old?

All of us, advocates of the mint-for-manu theory, once were advocates of the inflation-is-devil-theory. But we found the light past the darknesses. :rofl:
I think you're a decent player, so I'll just add one thing. Play a game with a country, whichever you choose. Stick to no-inflation-unless-absolutely-necessary. Then, play again, same country, but mint for manus (or other investments). My bet is that your second game will be much more successful.

 

[unmerged(18425)]

And to quote the famous Professor :

It's funny to see you quoting something, which was meant to explain why one shouldn't waste time to explain things over and over again, to explain something for the x-th time

Well, sorry for teasing, it's a good thing to see there are still helpful individuals around here to show some people the light.
And it is amazing to see there are still discussions about inflation around here

 

[DSYoungEsq]

It's funny to see you quoting something, which was meant to explain why one shouldn't waste time to explain things over and over again, to explain something for the x-th time

Well, sorry for teasing, it's a good thing to see there are still helpful individuals around here to show some people the light.
And it is amazing to see there are still discussions about inflation around here

Explain, if you please, where in either thread we are discussing this issue, that I said one should NOT mint?

The issue is not "should I mint?" The issue is, "why should I mint?" The objection I have is solely to those who assert that minting is always in every way a positive in the long run, or, worse, those who say they always want at least 5% inflation. I mint quite a lot. I have a Scotland game going where I was above 20% for some time, while the rest of the world was still poking along at about 5%. But I have read the analysis of the people being discussed. I do have a minor in economics, so I'm not exactly unaware of all that goes into the calculations. I'm certainly not going to try to set up a complete working model for the economics of the game (though I often think I ought to, given how many errors I find the "experts" leave stuffed in things like FAQ's ). But I can tell you true; minting solely to mint is wrong. Which was my starting point.

 

[unmerged(29041)]

But I can tell you true; minting solely to mint is wrong. Which was my starting point.

Why do you say that? I like to mint so things become more expensive. If I pay more for things, I feel I am getting better things. Didn't you learn that at economics? After all, if my troops are more expensive than everybody else's they ought to be better troops, aren't they? Who wants "el cheapo" troops? Who's gonna buy second hand troops? I want the best and I can pay for it with my good hard earned cash. My neighbour's will feel ashamed when they find out how much I can afford to pay for my troops. That's the whole point in life. Don't you get it?

 

[DSYoungEsq]

Why do you say that? I like to mint so things become more expensive. If I pay more for things, I feel I am getting better things. Didn't you learn that at economics? After all, if my troops are more expensive than everybody else's they ought to be better troops, aren't they? Who wants "el cheapo" troops? Who's gonna buy second hand troops? I want the best and I can pay for it with my good hard earned cash. My neighbour's will feel ashamed when they find out how much I can afford to pay for my troops. That's the whole point in life. Don't you get it?

:rofl: