The Dresden Files > DF Spoilers
How do Wizards make a living?
dspringer1:
I think the benefit of compound interest can be seriously oversold - at least as soemthing that provides real benefit to most wizards.
It requires several elements to be successful and all are problematic for wizards.
1) The person must first have wealth before they can invest wealth. Few people have the personality to sock away substantial resources today, so I cannot imagine the wizard population is filled with a hoard of atypical savers. So a poor or even middle class wizard is not going to be able to save enough money to create a small fortune through compound interest.
2) You must have something to invest "in". Stock or bond markets really did not exist before the 1600s and before that investments were typically limited to business you were actively enraged in or in land ownership. Hands on ownership was the norm really until the mid-late 1800s. So opportunities for absentee investments were pretty limited and few wizards would get rich on hands on small businesses.
3) Investing wisely requires real skill. You are most successful when you understand the business and change your business strategy as the world changes. Few wizards would spend the significant amount of time required to understand the market -- and spend even more time each year to keep that understanding current. Add into this the fact that most wealth creation came from technology -- and wizards are horrible with technology. They are also unlikely to spot new trends in technology or recognize when a previously successful technology is no longer the wise investment.
Keep in mind we had multiple very serious recessions, major technology shifts, and other disruptions that could easily have destroyed all a wizard's investments if not managed correctly. And while it is true the wizard could have invested in very safe government bonds, the reality is that few government bonds were really safe prior to the 20th century (exception - Bank of England) and I am sure WWII also contributed to a lot of bad debt. Even if your bonds paid off, the safe ones rarely earned much after accounting for inflation. Such investments protected your fortune, they rarely "made" your fortune.
4) The wizard is not alone in using magic or investing in the long term. There are many supernatural races who are both long lived, have access to magic, perhaps have some ability to see the future, and would choose to invest. The White Council's own investments are a perfect example. What this means is that the wizard cannot rely upon magic to provide a major advantage, at least once investments become substantial. There is just too much competition who can play the same game.
Belial666:
--- Quote ---Anybody else see things differently?
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1) Draw gold / precious stones out of the ground with geomancy.
2) Transmute coal into diamonds.
3) Affect horse/dog races with mind magic on the animals.
4) Affect sports events with good luck/bad luck spells.
5) Rob ATMs with invisibility and hexing.
Those are just the small stuff. Given a good ritual, a wizard could affect international companies or even countries. Most mass-produced goods should be thaumaturgically near-identical, company premises could be affected Little Chicago style, and businesses have no thresholds to protect them.
Bad Alias:
--- Quote from: dspringer1 on October 25, 2019, 08:34:55 PM ---I think the benefit of compound interest can be seriously oversold.
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Agreed, but mostly it's oversold by Harry who is likely bad at moneytm, thinks of all investment as simple compound interest, and viewing things from his perspective as someone born in the 70's.
--- Quote from: dspringer1 on October 25, 2019, 08:34:55 PM ---1) The person must first have wealth before they can invest wealth. ... So a ... middle class wizard is not going to be able to save enough money to create a small fortune through compound interest.
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A wizard would have major advantages in generating the initial wealth. Historically, the middle class have been people who were relatively wealthy, i.e., not peasants, but not nobility. Prosperous farmers, skilled tradesmen, and merchants. Recently, middle class has come to mean people who are nether poor nor super wealthy, relatively. Most middle class people retire; they literally become independently wealthy. So middle class people would have always had the opportunity to gain financial independence.
--- Quote from: dspringer1 on October 25, 2019, 08:34:55 PM ---2) investments were typically limited to ... in land ownership.
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Which would probably have made most wizards extremely wealthy if they had invested in farmland outside of most major cities and didn't sell it off immediately as the population has exploded over the last two centuries.
--- Quote from: dspringer1 on October 25, 2019, 08:34:55 PM ---3) Investing wisely requires real skill. You are most successful when you understand the business and change your business strategy as the world changes. Few wizards would spend the significant amount of time required to understand the market -- and spend even more time each year to keep that understanding current.
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I'm sure most wizards have connections to wealth management, mostly through the White Council.
--- Quote from: dspringer1 on October 25, 2019, 08:34:55 PM ---Add into this the fact that most wealth creation came from technology -- and wizards are horrible with technology.
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It's only post WWII that the "side effect" of magic was interference with technology.
--- Quote from: dspringer1 on October 25, 2019, 08:34:55 PM ---There is just too much competition who can play the same game [using magic to aid in wealth management].
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I disagree. There isn't too much competition in the real world markets for people who simply want to protect their wealth, i.e., at least maintain their net worth relative to inflation.
dspringer1:
Counterpoint
--- Quote ---A wizard would have major advantages in generating the initial wealth.
--- End quote ---
I agree that wizards can be wealthy, but there is nothing automatic about wealth generation. Wizards must spend an enormous amount of time learning magic. They need a lot of exotic and hard to get ingredients for potions and item creation. They have severe problems with technology. So unless they have some specialty of magic that is particularly useful for income generation, it is not likely they will become wealthy or even well off. Their focus is on their magic, leaving little time or attention for wealth creation. Serious wealth creation does take time and focus.
And while magic item creation can be lucrative, that is a skill that only develops late in life. Harry is exceptional in magic item creation (per WOJ) and is 40+ years old and he still cannot create items of power that last for any length of time (away from him) or that can easily be used by others. I suspect most wizards cannot make such items until they are well over a hundred.
--- Quote ---2) investments were typically limited to ... in land ownership.
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--- Quote ---Which would probably have made most wizards extremely wealthy if they had invested in farmland outside of most major cities and didn't sell it off immediately as the population has exploded over the last two centuries.
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Yes a wizard who waited until 2019 and sold his property in London would make a fortune if he bought it in 1700. But if he had sold it in 1730 I doubt he would have done more than break even. And wizards had to be careful about living too long in any one place, so few would have kept property in major cities for centuries. The vast majority of individual wizards holdings were no doubt in the country and unlikely to gain great value. Most wizards valued obscurity after all.
The major land owners were nobility - and most of them were impoverished when the modern age came about.
--- Quote ---I'm sure most wizards have connections to wealth management, mostly through the White Council.
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Why would you assume that? The company I work for does not give me insider investment advice nor carefully manage my investments. I am sure the White Council manages its own investments and uses them to benefit all the wizards. That it is the purpose of those investments. They are not going to manage the personal investments of individual wizards -- nor would most wizards give the council that level of control over their personal investments. The wizards are fiercely independent.
--- Quote ---Add into this the fact that most wealth creation came from technology -- and wizards are horrible with technology.
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--- Quote ---It's only post WWII that the "side effect" of magic was interference with technology.
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The vulnerability to tech began much earlier than WW II. It was certainly in place when trains were first created and that was early late 1700s/early 1800s.
--- Quote ---There is just too much competition who can play the same game [using magic to aid in wealth management].
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--- Quote ---I disagree. There isn't too much competition in the real world markets for people who simply want to protect their wealth, i.e., at least maintain their net worth relative to inflation.
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Ok I agree with this comment. My point from the beginning was that investments aided by magic were not going to be an easy source of wealth generation. But once that wealth was created, a wizard focused on managing investments could probably keep from loosing that wealth in the market.
Bad Alias:
--- Quote from: dspringer1 on October 28, 2019, 03:48:33 PM ---I agree that wizards can be wealthy, but there is nothing automatic about wealth generation.
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See my comment from October 18 as to how there are many ways for wizards to become wealthy. I'm not saying that it would be automatic; just that over a normal lifetime or two, a wizard should be able to figure out a way to become independently to indecently wealthy and maintain that level of wealth. Also, it only takes one "big score" for someone to be wealthy.
Now, I'm not saying that every wizard is going to be super wealthy or even just wealthy. I am saying that if a wizard set out to be independently wealthy, they would have a lot of opportunities and shouldn't have too much trouble. Also, if they are making enough money at whatever they are doing to feed themselves to put money aside, they will eventually be wealthy. Sure, there are going to be some wizards who invest their entire fortune in some boondoggle and go broke. Most of those wizards would probably diversify the second (or third) time around. Generally speaking, older people have more wealth than younger people. I imagine that would be even more true for wizards.
--- Quote from: dspringer1 on October 28, 2019, 03:48:33 PM ---Yes a wizard who waited until 2019 and sold his property in London would make a fortune if he bought it in 1700. But if he had sold it in 1730 I doubt he would have done more than break even. And wizards had to be careful about living too long in any one place, so few would have kept property in major cities for centuries. The vast majority of individual wizards holdings were no doubt in the country and unlikely to gain great value. Most wizards valued obscurity after all.
The major land owners were nobility - and most of them were impoverished when the modern age came about.
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They wouldn't have to wait that long. The closer land is to a population center, the more valuable it is. Per woj, most wizards didn't like to travel to far. You stated they need rare and difficult to obtain items. That means they need to be located reasonably close to population centers or already be wealthy enough to have factors travel for them. So a wizard was likely to have their home outside of town far enough to be left alone, but close enough to go to town for supplies. As populations grew drastically in the 1800's then absolutely exploded in the 1900's, a wizard could have made a fortune by selling their land every 50 years or so to maintain their obscurity. Most wizards alive were born either in the modern era or the early modern era.
This could be true of Ebeneezer, one of the most senior wizards. He did live in Scotland. He came to the New World by the time of the French and Indian War. He ended up in Missouri living close enough to town to drive in for supplies.
Here are some population growth graphics: https://www.insider.com/graphics-showing-population-change-world-2019-7#10-this-graph-shows-how-the-worlds-population-is-estimated-to-hit-10-billion-in-2056-according-to-the-un-population-division-10.
--- Quote from: dspringer1 on October 28, 2019, 03:48:33 PM ---Why would you assume that?
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I assume most have access to wealth management for several reasons. One being Harry stating that most older wizards have access to a good deal of wealth. The Paranet Papers state that many wizards are closer to Peabody's bureaumancy than combat magic. Rashid states that taking care of paperwork is a big favor for Harry.
--- Quote from: dspringer1 on October 28, 2019, 03:48:33 PM ---The vulnerability to tech began much earlier than WW II. It was certainly in place when trains were first created and that was early late 1700s/early 1800s.
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--- Quote ---According to Jim Butcher, "Magic wasn't always screwing up post-WW2 tech. Before WW2 magic had other effects. It sorta changes slowly over time, and about every 3 centuries it rolls over into something else. At one time, instead of magic making machines flip out it made cream go bad. Before that magic made weird moles on your skin and fire would burn slightly different colors when you were around it."
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https://dresdenfiles.fandom.com/wiki/Magic. That's why I assume that the change happened around WW2. (Also, I think it has been stated explicitly somewhere). It certainly wasn't screwing up post WW2 technology before WW2. It could be that the effect is "technology from the past 50 years," but we haven't seen any evidence that technology from the 50's is now immune from this effect.
--- Quote from: dspringer1 on October 28, 2019, 03:48:33 PM ---My point from the beginning was that investments aided by magic were not going to be an easy source of wealth generation.
--- End quote ---
I don't think it would be easy for most wizards, but that it would be easy/not terribly difficult for a subset of wizards. My point was just different ways that different wizards could make a fortune or just a nest egg large enough to allow them to be idle after 50-100 years.
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