Making Gold

I'm rather wealthy in the game of World of Warcraft. I've bought the vendor mount and just about every epic I ever wanted and given to my guild besides. I'm now working on my mini-pet collection, which I bring out against matching enemies (Azure Whelpling for Malygos; Dark Whelpling for Sartharion, etc.). Moreover, I do it with very little effort; I make about 1500-2k gold per 45-minute session. A lot of the time I'm asked how I did it, and my usual response is "Jewelcrafting", but this isn't quite true. Or rather, it's like asking someone why they are such a good athlete and having them answer, "By running". It kind of misses the point of the question.

In order to explain how I've managed to make this money, I'd like to address two mistakes people make about the economy in general. The first mistake is to think that the market is insane, rife with mistakes that are easily exploited by the clever auctioneer. The second mistake is to think the market is perfect, crawling with competitors ready to outcompete you immediately. Neither is true, and they both undermine the ability to profit.

The first mistake leads to the belief that the auction house is really about buying low and selling high. There is definitely money to be made this way; I bought my first epic mount with this strategy. However, the problem with this strategy is that it depends on other people's mistakes. Sometimes, you'll get really lucky and you'll notice others making mistakes. Other times, though, you'll not find a single mistake anywhere or get beaten to the mistake by someone else. Other people try to generate mistakes by monopolizing a section of the market. They'll remember the 30g they made on their first golden fishstick and forget about the 150g they lost on the rest. In general, monopolizing leads others to undercut you and you're stuck with a ton of useless stock. Ironically, you make money for other people doing this, but rarely for yourself.

The second mistake, however, is thinking that the economy is perfect and that every margin has been squeezed away by an infinite number of instantaneous competitors. This simply isn't true in WoW (it's not true in the real world either, but that's another story). There are tons of opportunities to make money by using crafting or even just little things like an import-export business. Yes, you will have competition, but they're trying to make a profit too, and will tend to drop out if the margins drop too low. In fact, entrepreneurship is in short supply and is the most valuable thing in WoW.

What I would say is that there are two tips for generating wealth in World of Warcraft:

• Generate Wealth
• Think Exponentially

By generate wealth, I mean that you should do something genuinely useful. Then people are paying you money for the service you have provided. Buying low and selling high doesn't really generate any wealth, at least not directly. It's a zero-sum game, like poker. However, production is a win-win game, where you gain the profit and the buyer gains the generated and now useful product. As long as you're producing wealth, while you might have competition, you are actually generating your own profits by generating things that are valuable.

By thinking exponentially, I mean that you should think in terms of how you can multiply your investment, not really think of how much profit you can make. Don't think, "I can make 100g by doing x", but "I can get back 130% on my investment by doing x". Try to find industries where you can throw two thousand gold at it in a sitting and make 150% back. When you multiply, rather than add, you generate more wealth in the long run. When you start to act in this way, you end up actually increasing your profits very quicly and with a miminum of invested time.

Those are my tips for making gold. I've been playing the game for two years, and discovered what I think is a foolproof philosophy. In fact, there are tons of other industries I'd like to play around with. It's too bad I can't find more things to spend my gold on.