Crunching the Numbers

I had a 'can't sleep' attack thus..

The origin for this whole thing is the following: /327/c1/156818/1.html

I got to thinking about to costs of owning an island and all that and worked it out in excel. If I did my math right it explains (@ least partly) why things are so expensive. The issue is basically High cost of ownership. US$ is on the left & L$ is on the right. Have fun.

http://spreadsheets.google.com/pub?key=pTNrWZ0aukaaJX_UFgV3PHQ

Okay... the first bug in your maffs is you forgot the monthly US$9.95 Premium account fee (which allows a person to own land)

The $$ (US$?) cost per meter per year (based on your numbers) should be US$0.075-cents (nearly 8-cents). You have it as: $13.32

The $$ (US$) cost for a 512-sq.m parcel per year (based on your numbers) should be US$38.44. You have it as: $568.33 [I'm assuming your calculation was to show the equivalent of a 512-sq.m parcel on the private island]

As I'm not the official Homework Helper I can stop looking at your numbers. They're off.

Anyway, you might want to rework your spreadsheet.

Sidenote: If you're going to present numbers, present them (no need to link to a spreadsheet) and include your argument (eg: Because of X this is causing <blank>.

Its fixed. Looks like I got a little dyslexic with the division.

The purpose of the exercise was to find out how much rent an owner would need to charge per square meter in order to break even. Therefor we know that a 512 would be L$ $852.03
a month. I was seeing rents @ around L$ 3000.

Makes you think...

How do you get a LindeX exchange rate of 266? A market sell will usually get you $1 / L$290.

Ishtara, a Limit sell is setting right about $266 and has been there for weeks. You lose money with a market sell. To do a Limit sell, you need to have the Advanced settings enabled. Go to "My Account" and find the "Currency Exchange Settings." Select Advanced and you will be able to do Limit orders.

Premium also comes with a stipend, and not everyone is being billed monthly. If you'd want to accurately represent premium fees as a cost you'd have to account for monthly/quarterly/yearly and L$500/L$400/L$300 stipend levels and deduct the value of L$ received from the cost which in half the cases actually ends up being a negative cost.

(And basics can own a private sim, there's no need to be premium for that)

In such a case the stipend (Linden dollars) is being used as a subsidy (bad business practice to rely on a subsidy when attempting to hit a break even point). [It's money coming in.] And the existence of the stipend has nothing to do with factoring the total costs (US dollars) of a private island [It's money going out.]

As the Own Virtual Land page
http://secondlife.com/whatis/land.php
and the Land Use & Pricing page
https://secure-web0.secondlife.com/whatis/landpricing.php
make clear, owning land requires a Premium Account.

According to the Second Life Knowledge Base Private Island FAQ
http://secondlife.com/knowledgebase/article.php?id=054
an island can have only one owner.

While a Basic Account could have an entire private island as a Covenant Land parcel the island itself must still be owned by a Premium account.

Sorry, your spreadsheet numbers are still off.

The actual first year cost of a single private island should be calculated as follows:

US$1,675 + (US$ 295 * 12) + (US$9.95 * 12) = US$5,334.40

US$1,675 = the island set-up fee
US$295 = the monthly island billing fee
US$9.95 = the monthly cost of a Premium account

Note that an entire mainland sim (or its equivalent spread over multiple sims) costs US$195 a month, or US$2,340 annually. An annual savings of US$1,200. Pushing that US$1,200 toward the front of the transaction (land acquisition) you could spend up to US$2,875 (or L$11.8 per sq.meter) acquiring an entire sim's-worth of land on the mainland for use as rental space.

The advantage to a private island is it can be sold as Covenant Land parcels to any resident. However, the island owner can revoke the parcel from the buyer at any time and for any reason (thus, Covenant Parcels can be sold over and over again following revocaton). Beyond the initial cost to _lease_ the Covenant Land the resdient typically also pays rent to the island owner.

For example, an entire island could set up for sale as smaller parcels, as Covenant Land, at a price of L$10 per sq.meter, or a total value of L$655,360, or US$2,427.26 (based on a US$1 exchange rate of L$270). After subtracting the island set-up fee and the first month's island billing fee the island owner comes out ahead $457.26 and can now simply collect rents along with reselling the parcels.

Makes you think...

Quoting one out of a dozen similar Linden Answer threads:

/139/10/141206/1.html

You can email the concierge to verify as well.

Since L$ can be sold for $ to pay for tier, any L$ income is definitely a factor and you skipped over the monthly/quarterly/yearly.

As I do not own a quarter sim I'm unable to ask questions of the concierge, however the thread uses answers from three different Lindens, two of which are contradictory, none of which works in Billing. And it is a thread, not available to people checking out the cost of an island while perusing the Second Life site. You might want to remind the concierge that such information should be moved up to the Island Pricing page.

And we don't know if island owners, who own only an island, are bumped up to Premium status on their profiles automagically.

But.. wow... that's a savings of 2-percent on the annual cost of an island or a savings of L$0.0018219 per sq.meter. Wowsome.



Err, as your bone to pick is that a Basic account can own an island, and the old Basic accounts have a maximum stipend of L$50 per week that's a whopping L$2600.. or less than US$10 (an entire year of scrimping and saving to subsidize the cost of a private island for _less than_ one day.. but, wow, I sure am glad we factored that in or the private island might have spiraled into the sun.)

If we move to the maximum, L$500 per week for an old Premium account, or L$26,000 annually, that's about US$96... or... *sigh*... less than 2-percent of the annual cost of a private island.

It's actually less than "less than US$10" and less than "about US$96" as there's a 3.5-percent transaction fee when selling on the LindeX.

Until you come up with something greater than 2-percent I'm going to keep skipping merrily.

I don't include the stipend as it's unearned personal income (and thus should not appear on the balance sheet for the island), and not generated from the rental income of the private island (which should appear on the balance sheet). Neither the island owner, nor any business owner, is under an obligation to use their stiped to subsidize their enterprise.

According to the land store the maintenance fee is skipped the first month. Therefor I used 1,675 + (US$ 295 * 11) + (US$9.95 * 12).

The makes you think I was referring to is the difference between the approx L900 break even and the L 3K rents.

Yes I thought about 'fliping' on the mainland. Its less attractive then this IMHO.

Not really sure where the need to be sarcastic comes from. You're the one who was adamant that the price of a premium account has to be accounted for. If 2% isn't enough of a save to matter, then 2% isn't enough of a extra expense to matter either and it's not even a requirement to be premium at all.

US$96 is both higher than the price paid for quaterly ($90/year) or yearly ($72/year).

It seems you just want to argue so *shrugs*.