College and Finance

10 Economic and Business Pro Tips from World of Warcraft

…That I didn’t learn in College or Real Life

World of Warcraft. WoW. If you aren’t one of the 12 million subscribers, you’ve probably at least heard of it, or know someone who plays. Thousands of college students have played or are currently playing this game. While everyone freaks out about the economic and business climate IRL (that’s “in real life” for you n00bs out there), I’ve been quietly learning some crucial business and economic lessons from my time spent in game. Since WoW is in many ways the perfect microcosm of today’s world, I’ve decided to “grind out” a PROTIP list, split up into business lessons and economics lessons. Students would be wise to read these, as entering the workforce, and the real world can be extremely challenging. If you learn now, you may not make the same business and economic mistakes too many have made before. Perhaps some of the fat cats on Wall Street could have avoided creating this financial disaster if they just spent some time in Azeroth. Imagine, a world without the economic recession or financial bailouts because CEOs were raiding instead of cooking the books.

Just in case your character is about to be summoned to a dungeon, here’s the Too Long Didn’t Read (TLDR) Version:

Look good, invest smart, build relationships, and don’t screw people over and you’ll flourish economically and in business. I observed these ideas in the World of Warcraft.

5 Business Pro Tips

Leveling and gearing a character in WoW is much like growing a business or furthering your own career. You have to make the right decisions in regards to what you should focus on (be it getting gear, making gold, or other endeavors) and there is no one correct way of doing things. However, just like in business, being sensible and unique, while building solid relationships can be the foundation for a leet character (or paycheck).

PROTIP 1: Appearances Are Everything – When you start leveling, you look pretty shabby. My first weapon was no more than a stick. As a result, no one in game took me seriously. In business, if you look like a n00b (under dressed or over dressed for work, not wearing clothes that make you look your best), you’ll be treated like a n00b. In WoW, if you want to get the best gear, and be with the best guild, you better have all your gear gemmed and enchanted, and better not be rocking low quality items (IE, green colored items and most blues…it’s all about the purple, “epic” quality). When you apply for membership to a guild, the first thing they will do is “Armory” you to see what gear you’re rocking. If it’s subpar, then the guild will think your approach to the game is sub-par and that you don’t want to be the best you can be. That translates to no ginvite (Guild Invite), and no opportunity to get the best loot available. If you are applying for a job, dress well and be confident during your interview. If you look shabby, no way will the company think of you as an asset. The company wants to find people to promote and pay a lot, just like the Guild wants a good player to recruit, and gear out. In the end, it’s all about demonstrating your worth, and that is accomplished at first glance by appearances.

PROTIP 2: It’s Not What You Know, But Who You Know – You’ve heard it many times, and unfortunately, it’s true. If you know the right people, and have friends in the right places, you can have success in many different endeavors. You certainly still need to have talents, but knowing the right people can get your foot in the door. In Warcraft, you always start at the bottom. However, knowing the right people can help you get into groups for the dungeons that drop the best loot. In IRL practice, this means knowing all the Key Players in your organization. Making friends in many places, especially in other organizations, can be a tremendous help if you are looking for a job, or your business is looking for some business to business interaction. In game, if you know geared players in other guilds, you have an automatic back up plan if relations with your current guild go south. If you are a little under geared, your friends can still get you into groups anyway (also known as being “carried”). Imagine knowing someone IRL who could get you a job or at least an interview even though you’re a bit under qualified? It definitely happens. Remember, building relationships is a crucial ingredient in the recipe for success.

PROTIP 3: Make Yourself a Brand – The research associated with brand identity is irrefutable. When you read the slogan “I’m Lovin’ It,” you probably see those fabled Golden Arches in your head. In Warcraft, it can be a very good thing to be identifiable, as long as it’s for positive reasons. If you occasionally spam Trade Chat (the chat channel where any in-game business is conducted) in order to market your profession, and you make a point to always be positive in PuG (pick-up group) settings, then you may find you’ll have more success overall in game. Even if someone doesn’t know you, they may have seen your name around, and will be more likely to do business with you. Getting your character name out there is the key to in-game success. IRL, getting your real name out there can also generate positive results. If you are working for a company, the best way to get superiors to notice you for possible promotions is often through word of mouth, or simply by just being visible. If your boss’ superior always gets a weekly report with your name on it, then he may actually learn who the heck you are (other than as the clown who got trashed at the Christmas Party). If you come up with something brilliant, or do something unique for the company, your name will be identifiable. Just ask Salzman from Accounting.

PROTIP 4: Market Your Profession/Skills Creatively – Too many players miss out on significant gold-making opportunities by failing to market their profession well. Coming up with a unique angle is the best way to distinguish yourself from the crowd. In WoW, I accomplished this feat by creating a unique “chat spam” in order to market my Enchanting services. Everyone who did business with me also got a nice Savory Deviate Delight, which turns your character into either a Ninja or a Pirate when eaten. Amusingly enough, this caused me to get business simply from people who wanted a savory delight in addition to their enchant. IRL, this can be applied to an office setting, or a small business, or even blogging. It seems like almost everyone has a blog, is twittering, and starting their own business nowadays, so setting yourself apart from the pack is even more crucial. If readers, users, customers, clients, or whomever can have a unique and memorable experience when interacting with you or using your product or service, they will be much more likely to return.

PROTIP 5: Don’t Burn Bridges, Build Them – In Warcraft, as in life, relationships can unfortunately sour. You may not get along with everyone in your Guild, just like you probably don’t get along with everyone at work. However, even if your vision isn’t consistent with that of the leaders of your organization, you shouldn’t make unnecessary waves. I knew a guy who was a hardcore raider, and became extremely geared as a result. He was the envy of many on the server that knew of him. Yet, a small disagreement with a Guild Leader and Guild Officer got out of hand. Instead of trying to resolve the dispute and mend the relationship, he /gquit (the infamous command to leave a guild) and started a whole flame war on the forums. The bridge was successfully burned. No other high-level guilds wanted to raid with him, and he certainly wasn’t going to be invited back to his old guild. As a result, his gear level declined as new content was released and he wasn’t there for realm first boss kills. Now, he’s just like every other nub pugging Naxx 10 for item level 200 purples. IRL, if you leave a job, always do so on good terms. You never know when conditions will take a turn for the worse. If you leave yourself with the option of at least trying to go back then that’s better than nothing. Not to mention, companies will be less likely to hire someone who has caused a bunch of trouble with previous employers. Remember, in real life, there are no server transfers.

Economic Pro Tips

The microcosm that is WoW includes its very own, sometimes thriving, often erratic economy. The auction house (AH), trade chat, quests, and vendors, all provide ample opportunities to make some serious cash. Players make a variety of investment decisions every day. Spending 1,000G to level a profession today instead of buying a rare vanity item on the auction house will yield very different financial results. The risk versus reward of decisions in Warcraft can actually translate to navigating the economy in the real world. If only AIG made it mandatory for executives to have WoW accounts.

PROTIP 1: When Investing, Patience is a Virtue – Auction House prices fluctuate significantly from day to day. If selling one item is yielding a significant profit, it probably won’t remain that way for long. If you try to buy something and there’s only one listing, chances are that it will be extremely overpriced. IRL, this idea shows itself on the random fluctuations of the stock market, or even in something as simple as the price of gas. If you go for something just because prices are great today, don’t expect them to remain that way. The best way to avoid making a huge mistake is to watch what happens over a period of time. In WoW, watching the item on the auction house for a few days is usually enough. If the price is holding steady or declining, then you may want to go for it. Of course, the price may increase too, so you have to evaluate the risk versus return always. The point is, making decisions without even evaluating the market itself is a recipe for disaster, just ask any stock broker who has been active in the last year.

PROTIP 2: Pay Attention to Outside Factors Affecting Markets – Outside influences can have a drastic effect on the economy. In WoW, a new patch means new recipes, items, and the like. It also means that if there are new Dungeons/Instances in the game, then people will need materials (or “mats”) for elixirs, food, potions, and other “buffs.” Supply and Demand will usually fluctuate significantly on patch days, so pro players will have this in mind when putting up auctions or buying auctions out. IRL, understanding outside factors can be crucial to success in this economy. Tension between Oil Producing nations and the Western World can directly lead to gas price increases. A natural disaster can affect the yield of a specific crop. Bad investors tend to ignore some of the most obvious cause and effect relationships. If you want to have economic success, being well informed on the state of the world is a good first step. Capitalizing on those fluctuations is another feat altogether.

PROTIP 3: People Trying to Exploit Markets Ruin It For Everyone – This could also be called the Chinese Gold Farmer rule. In WoW, people who buy or sell gold for real-world dollars end up screwing up the economy a lot more than they may know. Chinese gold farmers love to ruin any natural profit that is to be had by dramatically increasing the supply of items on the auction house. Not to mention, Gold Farmers mess with inflation on servers by introducing artificially high amounts of gold. In real life, people like Jim Cramer on Mad Money give out wonderful advice on hedging etc to help “savvy” investors get quick profits. Unfortunately, these types of practices also lead to the real-world economy taking a dramatic nosedive. If you want to be a cheater in WoW, or IRL, then be my guest. However, keep in mind that you are ruining it for everyone following the rules, and if you get caught, you’ll get no sympathy from the public. Just ask former Enron executives.

PROTIP 4: Diversify Your Assets – In WoW, diversifying only makes your Account stronger. Leveling new characters and professions, collecting numerous assets, and doing as many daily quests as you can is all a part of diversifying and making more G. If you have access to more than just two professions, you can adjust to subtle changes in the market and sell items/skills where the biggest profits are to be had. IRL, this means not putting everything you have into one stock, or another type of investment. If you have a lot of diversity in your investments, then you should be much better off, as long as the entire market doesn’t take a nosedive. In that case, you, along with the rest of us, are screwed.

PROTIP 5: Borrow Smart – We got in this current economic crisis in part because people borrowed too much, or borrowed from the wrong institutions. In WoW, borrowing money is a little less cut-throat because it’s typically a friend or Guild Master doing the lending. That being said, it’s always good to borrow only for sound investments that will increase your earnings over the long term. For example, borrowing Gold to get an Epic Flying Skill (the ability to ride a really fast flying mount all over the World…of Warcraft) on a character can be a great investment. You’ll get quests done faster and be able to gather mats much more efficiently. IRL this applies to things like real estate. When the housing bubble burst, many people were screwed because they didn’t make smart borrowing decisions. Conversely, my parents were fortunate enough to make a smart decision and invested in land, rather than just a large McMansion in a gated community. Therefore, even though the housing market is still in the toilet, they are still ahead of the game and have actually added value to their investment.

So there you have a PROTIP list. Now you can get back to pwning nubs.

May 27 2009 | College Advice and College Technology and Financial Advice | No Comments »

7 Money Saving Questions to Ask Your College

College and Finance is proud to present Part II of “How to Save Thousands of Dollars on the Cost of College,” written by Todd Johnson of College Admissions Partners. In “7 Money Saving Questions to Ask Colleges,” Todd goes through the finer points of financial aid, providing solid suggestions for questions students and parents should be asking. In today’s economy, asking the right questions can save you a significant amount of cash, which is always a good thing.

All right, you have learned the basics of college financial aid. Now you need to know the questions to ask colleges that will help you save money.

7 Money Saving Questions to Ask Your College

1. What percent of my need will you meet?

Remember that EFC, or expected family contribution that the FAFSA determined? Some colleges will meet 100% of your need. Need again is defined as the cost of the college minus your EFC. So what does it mean if a college says they will meet 100% of your need? It means that once the FAFSA or Profile form has determined how much you (and your family) can pay for college, the college will pay 100% of the rest of the bill.

Colleges will typically meet the need you have using a combination of grants, loans and work-study programs. Most colleges will award work-study opportunities and loans first. If there is a need after that, the remaining need will be supplied by grants. The colleges will typically have a standard loan and work study amount that they award. You should ask about what these numbers are when investigating the college.

Let’s see an example of a financial aid award from a college that provides 100% of need with a student who has an EFC of $5,000:

College Financial Aid Information

Total cost of college: $40,000

Expected Family Contribution: $5,000

Need: $35,000

Financial Aid Award

Work study: $2,000

Loans: $4,000

Grants: $29,000

At a college that meets 100% of your need, with an EFC of $ 5,000, you would only have to pay $5,000. You may be wondering, “but what happens if the college doesn’t meet 100% of need?” Most colleges don’t pay the total amount of need that their students have. Let’s use the example of our imaginary college from above only this time assume that the school only provides 90% of need.

This college only provides 90% of the $35,000 need or $31,500. Thus, your out of pocket expenses are the $5,000 EFC plus an additional $3,500 for a total cost of $8,500. This example makes it easy to see why a school that meets 100% of need is often a better financial aid “deal” than a school who doesn’t meet all of the families need. Many of the most expensive private colleges meet 100% of the students need while cheaper public colleges usually meet less than 100% of the need. This means that for many students it can be cheaper to go to an expensive private college than to attend a cheaper state school. Until you know what percent of need the college meets, don’t eliminate a college from consideration just because it is expensive.

2. Does the college have merit based aid?

Many colleges that don’t meet 100% of a students need do offer scholarships for some students. If your student is near the top of the application pool for a less selective college, they may get some money if they qualify for merit based aid. Thus, in some cases, if the student is willing to look at a less selective college, they may get a better financial aid package. Here are some more questions you should ask if the college provides merit aid.

How many merit awards are available?
What is the value of the merit awards available?
What are the qualifications to receive one of these merit awards?

This works even for families that don’t qualify for need based aid at all. If your student can qualify for a merit based award you won’t need to pay the full stated cost of the college.

3. How is financial aid determined after the first year?

Some colleges have a policy of providing good financial aid for the first year and then substantially reducing the grant aid in the following years while increasing the loans. You should ask the college in which you are interested how they determine financial aid after the first year and what the average loan is after the first year. While it is typical that the amount of loans will increase each year if the increase is substantial you will want to take that into consideration.

4. What is the average loan amount at graduation of those students who have loans?

This question will give you the best indication of the amount of loans that this college requires compared to other colleges in which you may be interested. Although most students will have some loans when they graduate, you don’t want this amount to be any more than necessary.

5.What is your policy regarding outside scholarships?

Outside scholarship are those that come from someplace other than the college. Most colleges will subtract money earned in outside scholarships from your financial aid package. Some colleges will reduce the loan burden by the amount of the scholarship, but other colleges will reduce your grant money. If the college reduces the amount of loans you have to take out that is a benefit to you. There is no benefit to you if the college reduces the grant aid.

6. What is your packaging policy?

Most colleges give a financial aid package that includes grant money, loans and work study. But each college combines this money differently. Specifically you want to know:

What percentage of an aid package from your college is grant vs. self-help (I.E. loans, work study)?
Obviously, the more grants a student can get instead of loans and work study, the better it is for the student.
Does your college have a preferential packaging policy?
Preferential packaging occurs when a college gives a better financial aid package to a student with a stronger academic background than to another student with the same financial need but with a weaker academic background.

7. What is your four year graduation rate?

What difference does a college’s four year graduation rate make? This is an important question that many people never consider. Another way to phrase this is, How many years of college am I going to have to pay for? If the college has a high four year graduation rate, you will most likely only have to pay for four years of college. However, if the college graduates most students in six years then you can plan on paying for six years of college, not four.

The Bottom Line

Now that you know something about financial aid, including the questions to ask each college you are considering, you can make an informed decision in paying for a college education and hopefully save yourself money in the process.

March 09 2009 | College Advice and Financial Advice and Financial Aid | No Comments »

How to Save Thousands of Dollars on the Cost of College

What you need to know about financial aid BEFORE choosing a college

College and Finance is all about giving students and families the best information. With this in mind, Todd Johnson, who is the principal college admission consultant for College Admissions Partners, has written a two-part guest post on saving money via financial aid and other methods (Be sure to check out Part II: 7 Money Saving Questions to Ask Your College, after reading Part I). Todd provides professional and personalized service to help students and families through the complete college admissions and financial aid process. Needless to say, he is well versed on the subject; so without further introduction, here is part one.

With the high cost of a college education, you do not want to pay more than necessary. Yet thousands of families pay too much for college every year because they don’t understand the basics of financial aid and don’t know the right questions to ask. So let’s learn how to save money.

There are three types of financial aid for college:

1. Grants or Scholarships
2. Loans
3. Work-study programs.

– Grants and scholarships are free money that you do not need to pay back. Most grants and scholarships come from the federal and state government or from the individual college.

– Loans need to be paid back after college.
There are many loan programs available from the federal and state government. Most of these loans have fairly low interest rates. There are also private loans available although these generally have a higher interest rate.

– Work-study Programs are jobs offered to students on the campus of the college in order to help them pay their tuition.

The difference between need based financial aid and merit based aid:

– Need-based aid is given by all colleges to students who have demonstrated need. Anyone who can’t pay the full cost of the college has need.

A form called the Free Application for Federal Student Assistance (FAFSA) determines the amount of need for federal grants and scholarships. Many highly selective colleges also require a form known as the Profile form The FAFSA form is filled out after January 1 of the year the student will first attend college.

The FAFSA and Profile forms ask questions about the income of the parents and student using information that you gave on your tax returns. These forms also ask questions about the amount of money you have in savings or investments. The Profile form is more detailed than the FAFSA form. Once these forms are completed, the government uses the FAFSA form to determine how much your family can pay for college. This is your expected family contribution or your EFC. Your EFC is the same regardless of the cost of the college. Similarly, the individual colleges who use the Profile use that form to determine what your family can pay for college.

Your need is the cost of the college you are looking at minus your EFC.
For example, if you are looking at a college that costs $20,000 a year and your EFC is $5,000, your need at that college is $15,000. If you are looking at a college that costs $40,000 a year, your EFC is still $5,000. Your need at this college is $35,000.

– Merit-based aid includes scholarships typically for students who have good grades or have some other special talent such as athletic or musical talent. Most highly selective colleges offer little or no merit-based aid.

When considering which colleges you want to apply to, you should ignore the cost of the college. Yes, you read that right. Ignore the stated cost of the college when you are first deciding which colleges to investigate further. You will see why because in part two where we discuss the questions to ask colleges that will save you thousands of dollars.

March 04 2009 | College Technology and FAFSA and Financial Advice and Financial Aid | 1 Comment »