I'm learning Financial Accounting right now, and I've come to learn interesting concepts. Particularly how to compromise the GURPS concepts of wealth, debt, liabilities and actual real world accounting.
Lets start with trying to make character assets more complicated, realistic and greater in value.
According to the Basic Set, 80% of you're starting wealth is you Assets. Now this is the layman term for assets, and there are some problems using this term. First off, is that Assets is equal to Liabilities and Equity. Since a default character doesn't have any liabilities (aka debt) then one can assume those Assets are composed of (Owner's) Equity.
Here is a homebrew rule for GURPS:
1- Characters Starting Wealth is equal to Owner's Equity.
2- Since characters can take debt (which I'd like to call amortization) beyond their income (which actually in the rules, p26) of their annual income we can actually allow for the separation of entities (personal and business).
in TL10, A starship captain owner has a -20cp debt and used it to raise their wealth level to Filthy Rich ($10,000 x 100 = $1,000,000 a month). If this was a 10 year amortization, we can speculate the liability be around $120,000,000. Since Liabilities are part of assets, technically the character has $120,000,000 worth of assets but have $4,000,000 plus the initial money the bank gave of $40,000,000 equity stake in the starship business. A total of $164,000,000 of Assets at TL10 Filthy Rich (Which is normally at $4M).
On a side note, one can speculate that Ships have a special Asset property in calculation. Since they are highly valued sources of opportunity, their depreciation and liquidity would make for a special case for entrepreneurial loans.
Question: If the Captain earns $560,000 but is Liable for $1M how is he able to pay this?
Answer: Separation of Entities, the captain's personal accounts and the business's accounts, allow for the Business's profits to be separate from the Captain's Profits.
A gamer must understand that Accounting is play of semantics the way a rules lawyer can debate the finer points of the rules. The business is “predominantly” owned by the filthy rich captain BUT it still has liabilities to its creditors, who don't own it,but can sue to own it if the captain fails in his dues.
So it is the Business which the Captain Owns, which shall be paying the $1,000,000 a month debt.
After all the paper work, the Captain and his business partners (who should trust the captains leadership, thats why they got into the business) have to make roughly (guestimate) $2.2M a month to make their 400dton armed crude merchantman and 5 variable-role fighters and crew profitable.
Because of the economies and scale, and the cost of para-military services (not necessarily mercenary work). Along with the potential profits successful and very high risk enterprises the Party can price their services around $2.5M (arbitrary-like in many aspects of business actually, the extra is for the potential risk).
This doesn't have to be a hard cash value. It can be a line of credit, Rights over Spoils, trade-able assets, etc. Its up to the GM and more so for the Player's ingenuity to make their own opportunities.
What if I take a modern TL8 character and apply Accounting concepts and simple banking concepts with his finances.
$2,100 a month (Developed world middle class, or Developing world's Wealthy Class)
$600 Cost of Living
$1400 Amortization (-7cp Debt)
This leaves about $100 a month. More if the character skimps enough to bring down his cost of living (moving into an apartment). .
$16,000 + $54,200 (loan capital from the bank) Equity
$168,000 (10 year loan, at 12% interest) non Current Liability
If the Character was an entrepreneur, he could have spent the $54,200 on capital that will potentially earn him more money over time that will (with compound interests of small successes) be far greater than the debt.
Now the adventure is How will This TL8 Character entrepreneur? What skills will he get (or need), what networking resources: allies, contacts,etc. What opportunities in that day's current event's news can be converted into a gamble situation with all the complexities and challenges the real world can throw unhinged.
Question: What is the difference between this Character and A character who chooses not to take a Loan?
Answer: Opportunity. The character with more “assets” has more opportunities to work.
Time and Accumulation has its place in wealth generation, as a passive strategy. They don't take advantage of Opportunities that occur in life or actively pursue the creation of opportunities.
Gamers as wanna-be adventures should be able to see how the risks their Player Characters take translate to their own real lives. Liabilities are voluntarily assigned risks, in much the same way a Gamer Chooses to make his hero cross dangerous territory to rescue or recover a valuable asset.
In this circumstance the Gamer is able to take his game to a whole new level of Munchkinism as he is both attempting to understand risks, his own appetite for risk, and how he makes decisions.
A character purchases an property to develop, a small business or an active stake on a much larger business, funds a risky but potentially profitable expedition, etc.