How do people afford it

I think unless the few real money makers step forward and give you their figures, you're not going to find any hard and accurate numbers.

I know of (not to say there aren't more) maybe a half dozen people in SL who could be considered "earning a living" -- that is, turning enough of a profit every month that is equivalent to a decent RL job's income. And those I know of aren't just providing estate living.

There have been many threads on the viability of businesses in SL. Personally I think SL serves as a good arena for people to play at having a business -- perhaps even to the point of being a good test run for those who want to possibly try their hand at a RL business some day. The principles are the same -- work hard, work very hard, avoid distraction, know your market and loads of business skill.

There are certainly some who make their money on fly by night operations, but I don't think they are sustainable unless the person works at every new "thing" when it hits SL.

SL is exceptionally profitable for a few, and for most, we're just trying to cover the costs associated with being here, and/or create a little extra spending money. And then of course there are those who don't care about making money and they see this as entertainment money well spent -- and it is!

Alliez rocks! She deserves to be doing way more biz than me. Quiet, nice and cool person!

And Cocoa, awww... *hugs*... you are a good person too



*blinks*... nooooo! I dinna do it! grin I don't sink any $L from the economy at all. I just speed its velocity up a teensy little bit. If I were a sink that big, I'd be accumulating $L. But right now my balance is $L 10417. So you can see I'm putting the $L back!

Proof of concept: my regions are less than 0.2% of the grid. In a world where Anshe has hundreds of regions compared to my 30-some. I'm really what might be called a 'baby baron' - there are dozens and dozens like me on the grid. Talk to Anshe or Alliez or Adam or people like that for real, ultimate land baron powerz! They won't bite. I'm just chatty, that's all.

And yes, tier is paid via USD credit. As for clear financial data... I honestly don't think anyone knows, or could know. There are a lot of off-grid transactions that take place. I can't speak for anyone else but believe me, there is no way in Hades I could personally afford the 5980 USD tier for Caledon unless SL activities covered it. *After* all that is covered, I can cash out some... and don't forget taxes.
...

Also folks... this thread is freaking me out a little bit - it's wonderful and all, but... eeek! I'd be waaay more comfy posting in 'normal' threads, this is just a bit too self-gratuitous posting in a thread 'about' me, so this is my last post to this thread no matter *what* you guys do. So please don't torture me with it... X_X

I'd happily try to 'resident answer' any questions I thought I knew the answer to, in say, an economy question thread not about me though.

Hi Lucrezia,

Thanks for replying.

I do appreciate that "real figures" are going to be impossible to get. That's what you employ a good tax accountant for after all..

I do think however that the economic statistics will give a feel for what is possible.

As I say, and I've also harrassed LL with my noob questions, LL go out their way to tell us the total value of the L$ money market, and break down sinks and sources.

The only source which is undefined must in fact relate to the value in dollars which is taken from the SL money market by RL users. As I say everything else is defined quite explicitly.

If so, then to be honest, $29K is pretty modest and sort of belies the PR frenzy about business in SL booming and lots of people giving up the day job.

I do understand that people like AC use Paypal etc to collect land fees, and obviously this won't appear in any LL statistics.

I was just wondering if anyone could confirm my reading of the Stats, and possibly point me to some other sources of info.

Thanks again..

Hi Desmond,

Thanks for your reply and being so frank.

Sorry if it seemed I was out to pump you personally for info, I was really just asking if someone could help with my analysis of the economic stats and possible point me to other sites or blogs which discussed the SL economy.

Thanks again for your reply, and I promise to leave you in peace now..

You are misreading the information Stephen. The Sinks and Sources represent ways where L$ are either 'created' or 'destroyed'.

They can be 'created' when LL pays people their Stipends, signup bonuses, or 'prints' new ones to sell on the Lindex in order to stabilize the money supply.

They are 'destroyed' when you pay LL to upload files, pay for auctioned land in L$, pay for classified ads or list land in search places, start a group, or that kind of thing.

The 'other' heading for sinks and sources is just that -- ways L$ are created or destroyed, which don't fit into those categories.

When a resident converts L$ into US$ they are selling those L$ to another resident. The L$ are not destroyed, they are merely transfered. If you look at the Lindex market history page, you will see the Lindex volumes on a daily basis. Those volumes seem to average around L$55,000,000 to L$60,000,000 per day. This is around US$220,000 per day of people buying and selling L$. That is (to me) a way to get a handle on the economy.

-Atashi

so do you have to collect at least 7475USD in income each month to pay the 5980 + 1495USD (25% of 5980 income) for income tax to break even and start into the 'profit zone' ?

The $5980 is a tax deductible business expense, so anything above that and his other expenses would be taxed.

Holy Boston Tea Parties!

cool i allways wondered about that

i guess i need a better accountant

who's Desmond and wut's all this hoopla about?

Thanks Atashi,

I think I had a handle on what the sinks and the sources represent.

I just figured that if someone cashes in their L$ for $, this must be a sink and be reported as such because presumably those L$ are then leaving the money supply.

I know you're saying that LL only create more money when it's needed to "stabilize" the money supply, but there doesn't seem to be any detail of a LL L$ reserve anywhere. Whenever we do a transaction with LL in L$ that is immediately treated as a sink.

From what you're saying, when someone sells L$ for $, these are actually bought by another resident who pays for them from their $ account?

Basically once a L$ is in the money supply the only way it can be removed (via a sink) is by a LL transaction such as starting a group?

On the face of it this looks like the RL money markets, except that normally if I decide to buy some £ with $, the Bank of England doesn't just print me off some bright new notes.

The LL way of doing things is strange then isn't it?

For example, lets say I buy L$1000 for $4 - this adds L$1000 to the cash circulating SL. From what I understand, when you buy L$ via the website, they just create more money (which would be a very bad thing for a RL currency obviously).

I then decide to cash it back in to get dollars.. I sell via the website for lets say $3.

I understand from what you're saying that no sink is created because it is actually just bought by another resident via the market. This would mean that my L$1000 which is now still circulating the economy could actually have cost $7 rather than £4.

In a RL currency market, this wouldn't be the case because we'd simply be swapping existing currency, and the price is dictated by the market. However for L$, the $3 is more than likely new money from the buyers credit card.

From what I know of RL money markets, this can't be right.. or LL is running a very strange currency exchange mechanism.

As I say though, I'm pretty ignorant about how SL and the L$ exchange works, so I'm off to hassle some nice LL employees for more info and to read up a bit more...

Thanks for all your help.