Gaining Personal Net Wealth (PNW)

[aspenfallen]

I've checked the forum and haven't really found too much advice on this, so I was wondering if I could ask directly...

Lately I've been playing the South East Australia scenario, and it has a requirement I've never had to complete before: $5 million in PNW. Every time I try to gain more and more PNW though, the economy eventually tanks (recession) and then I get a margin call I can't overcome & end up selling off all my stock, putting me over a million in debt.

In this particular scenario, the salary is terrible too (I've never gotten over $26,000), so I'm really really stumped as to how I can get $5 MILLION dollars in wealth?? Any recommendations, guys?

Thank you,
- Aspen

[RulerofRails]

How close are you getting? The main thing about PNW goals and "things falling apart" is that your company is probably not structurally sound. Often this happens when a player spends more money than they should trying to chase the other goals (hauling wool in this scenario.) The recession then hits and the maintenance costs of the extra infrastructure wipes out most of the reduced company profits. Share price is very sensitive to big changes in company profit from one year to the next. Also be careful about when you replace engines (unnecessarily), sell industry, or bulldoze anything, etc. Those things book losses on your profit sheet and in a recession when stock prices are low they can be deadly.

It is not necessary to invest in industry to win this map, but it makes it a lot easier. Buy a Dairy Farm at the start in addition to rails or be more aggressive to go for a full blown industry start. The second option will put you back many years on your hauling goals, but when done right will give you a zippy finish as growth is exponential and when you do get to laying those rails you will be connecting more in a year than you did in 5 years of rails only play.

Once again there are many ways to play, have fun and win these easier maps. Build a good profitable company to invest in, invest as early as possible and you will be on the rails of success!

[Stoker]

I've checked the forum and haven't really found too much advice on this, so I was wondering if I could ask directly...

Lately I've been playing the South East Australia scenario, and it has a requirement I've never had to complete before: $5 million in PNW. Every time I try to gain more and more PNW though, the economy eventually tanks (recession) and then I get a margin call I can't overcome & end up selling off all my stock, putting me over a million in debt.

In this particular scenario, the salary is terrible too (I've never gotten over $26,000), so I'm really really stumped as to how I can get $5 MILLION dollars in wealth?? Any recommendations, guys?

Thank you,
- Aspen

That's easy. Just make $10 Million and squander half of it.

[Blackhawk]

You may have learned a couple tips from the margin call thread. But remember the earlier you buy the stock the better, as the stock should continue to rise in price and potentially split along the way. The buy low, sell high mindset can also come into play. You'll want to be in a position to try and take advantage when there is a dip in the stock prices.

Also take advantage of your own company money and buy back stock. With less stock out there, the shares you own will represent a greater percentage of the company. And if you own a large amount of the company, raise your company's dividend up. Depending on the scenario you may have to play a balancing act between diverting company money to dividends or using company money for expansion to meet a scenario goal. If you own a large portion of your company's stock and are in a comfortable place, then raise the dividend up and take some of those profits for yourself. When the economy tanks, not only does the dropping stock price potentially force you to sell the stocks you bought on margin, but also I believe the interest rate on your personal debt increases which usually further drives you into debt. So reducing your debt by taking in dividends can help prevent a future margin call.

[Hawk]

Be very careful buying on margin. That can come back and bite you bad, as I'm sure you've seen.
Only buy one or two shares on margin, and only if it looks like you're going to be making some good money soon.

[Gumboots]

I've checked the forum and haven't really found too much advice on this, so I was wondering if I could ask directly...

Lately I've been playing the South East Australia scenario, and it has a requirement I've never had to complete before: $5 million in PNW. Every time I try to gain more and more PNW though, the economy eventually tanks (recession) and then I get a margin call I can't overcome & end up selling off all my stock, putting me over a million in debt.

In this particular scenario, the salary is terrible too (I've never gotten over $26,000), so I'm really really stumped as to how I can get $5 MILLION dollars in wealth?? Any recommendations, guys?

Thank you,
- Aspen

Ok, start with industry. Build a sound company first. If your company is doing well, you'll be able to buy enough shares to get your PNW up. Everything depends on a strong company. You can take ten years building it up if you like.

Once you have a strong company, haul wool like crazy. A good trick is to lay a string of large stations along the inland rivers (large stations catch more wool) and have several trains shipping wool from one station to the next. They will make hardly anything on each trip, but it's a really good way of getting your wool haulage stats up. Obviously you need something else to keep the company profitable, since the wool haulers are just there to meet the haulage goal.

And don't listen to wimps who get nervous about buying on margin. I've done this scenario with over $20 million PNW and over $90 million CBV, with all steam trains on the hardest setting. It's possible.
You can buy heaps on margin if you do it smartly. Do not buy on margin if your comapny cannot afford to pay you enough wages and dividends to stop your personal debt increasing significantly. That's just suicide. Work out your margin buying so that you aren't going backwards in terms of debt, and always keep some reserve on your buying power so that you can absorb fluctuations in stock prices, and you should be fine.

[Hawk]

And don't listen to wimps who get nervous about buying on margin.

Wimp? Just because someone has a different play style than you or isn't the great expert you obviously are?
Good grief.

[Wolverine@MSU]

A good rule of thumb I've found is to try not to let your nagative cash (margin buying) go much higher than your positive purchasing power. I've also, on occasion, had the company take out bonds at absurdly high interest rates to allow me to buy back stock when I get in a PNW bind (the threat of having to sell off stock). It's especially important if you own a lot of the company, because every share sold decreases the price of the remaining shares, hence your purchasing power.

[RulerofRails]

Wimp?

.
Hawk, don't worry about being called a wimp. People like me crazy enough to pause often and watch all aspects of their company like a vulture will always buy on margin with impunity. In fact, you are making PNW goals more difficult for yourself this way. That you have won some of the scenarios with 100M plus book value without really buying on margin requires respect.

@Wolverine: The way I play involves frantic investing in the first few years (using all my purchasing power). See the other thread for a little more details. 50% of the company at 2M-3M debt and then I just let it run for the rest of the scenario. I find it to be tedious to always check my share prices when I want to be building my empire. Different styles. Whatever you have fun doing.

[Stoker]

I had not played this scenario in quite a while, so I decided to give it a run through so I could give some specific advice relating to this scenario. First off, the scenario writer was trying to thwart the "Start company/ take out bonds/ steal all the money" exploit, and ended up just making a scenario that does not resemble the operation of a real railroad company in the slightest. All major corporations rely on Bonds and Stock issue for capital, and removing these options from the game just makes it all screwed up. What he should have done was leave those options in place and limit the # of Companies a player can make to 1. When a scenario writer intentionally screws things up like this I view it as him challenging me to outsmart his attempts at monkey wrenching things.

The gauntlet is thrown and the challenge is accepted, sir! Onguard!

That being said, the scenario writer did not understand RT3 or the event scripting in the slightest, and he actually left open a way to stuff your pockets with investor's cash. Creating a company and then betting that it will make money (buying stock on margin)is hard and often you will fail, especially in a scenario that has the financial options all borked up like this one. Something that the scenario writer did not know is that something that is certain to succeed is to make sure that a company will lose money, and bet that it will by short selling stock in it. Here is how I started out:

With difficulty level on Expert, I created a company with maximum investor input, and then sold off all of my stock. Leaving the game paused, I then proceeded to divest this company of all of it's cash and leave it with no assets. The easiest way to do this is to buy and then sell industries until you do not have enough cash to buy an industry, and then lay track, leaving enough cash so that you can then bulldoze it. I ended up with 1k in the Company coffers, and then resigned. Then I short sold as many shares as I could and hit "slow" game speed for an instant and then pause again. The stock price plummeted to zero. I then "purchased" the short sold stock and ended up with this:



I then took that $517k and started a new company with exactly $900k , and purchased two Dairy Farms in the upper right corner of the map that were available for $450k each, and had ~90k profit per year each. I purchased the few outstanding shares of my new company on margin and had 100% ownership of this company giving me a Personal Net Worth of $871k, before 1 second had ticked off of the clock.





Then I got a little lazy as I sat here drinking some coffee and read news, and let the game run for 3 years, at which point my credit was stellar. I then sold off all of my shares in this company, and then sold off all of the industries owned by this company. I then resigned and short sold the stock of this company, hit slow for a moment and then pause, making the stock price plummet to zero, and then "purchased" all of those short sold stocks. Here is where I am at start of year 4:



Then I started a new company with maximum investor input giving me around $5,000,000 cash to work with and invested in the most profitable industries I could find, which were two Textile Mills and a couple logging company's. I lazily let that run for a year, and checking my ledger at that point I am well above the $5,000,000 PNW mark required for Gold. At this point I can make some rail and work at getting the wool haulage quota met. Something else to note is that I selected Steam , and then turned down the "advertising" option. The scripting in this scenario is completely borked and you will end up with only 1 loco, which turned out to be the $400k V200 Diesel. Makes no sense at all, but now that I have a Company that makes $1,000,000 a year I can work with this baloney. I will be surprised if it takes me more than 12 years to hit Gold. Not sure what will happen if you select Diesel, but I suspect the result will be similar.



If I were to give this a second, more serious run through knowing how quickly I can reach the $5 Million PNW I would probably start hauling Wool a bit earlier, and probably beat this scenario in less than 10 years. This attempt I just wanted to show how easy the PNW goal is to meet, and I think I did that.....

[Gumboots]

You can actually win this one without playing robber baron too, which is how I did it because at the time I didn't understand robber baron tactics. IOW, I just built up the intial company until it would do the job. More than one way to get the goals. With where you are now the haulage should be easy enough, even without using bait and switch.

It's weird you got a diesel when you selected steam though, because I've never had that happen. I always get the steam locos when I select steam. You should be given quite a useful range of them.

[Gumboots]

Wimp?

.
Hawk, don't worry about being called a wimp.

It was meant to be a joke. Obviously it didn't come across well. Sorry about that.

People like me crazy enough to pause often and watch all aspects of their company like a vulture will always buy on margin with impunity. In fact, you are making PNW goals more difficult for yourself this way. That you have won some of the scenarios with 100M plus book value without really buying on margin requires respect.

@Wolverine: The way I play involves frantic investing in the first few years (using all my purchasing power). See the other thread for a little more details. 50% of the company at 2M-3M debt and then I just let it run for the rest of the scenario. I find it to be tedious to always check my share prices when I want to be building my empire. Different styles. Whatever you have fun doing.

The thing is that Hawk has said in the past that he often finds scenarios with PNW goals to be difficult. The point I was trying to make is that you probably will need to buy on margin to some extent if going for high PNW without trashing a series of companies. You can do it too, as long as you keep an eye on the relationship between interest on your margin (always charged at the prime rate, so easy to calculate) and your personal incomings (wages and dividends).

If your incomings are high enough you can margin buy like crazy. I've often run up several million on margin, buying lots of 25k shares at a time, but I'll only do that if I can arrange sufficient incomings to balance that debt, and a sufficient margin (in buying power and/or company cash) to be able to absorb fluctuations in share price. Just buying on margin in the hope that somehow it might save you wont work. You need to crunch the numbers. If you crunch the numbers, margin buying can work very well.

[Stoker]

@ Gumboots: Initially I did have the large selection of Steam Loco's, but after I turned down the Advertising option it eeled me and now all I have available is the V200, go figure. I don't even know what the V200 is. Is it even a real loco? I know that if all loco's are disabled in a scenario that the game will select one, and I think that is what is going on here. I agree that meeting the scenario goals using "regular" RT3 strategies is not all that hard, as I did that the first time I played this. I just wanted to show that there is more than one way to crack a walnut, and to counter-thwart the scenario writer's feeble ill conceived attempt at bonkering up the financial things.

[Gumboots]

Yeah understood. It's kinda fun outsmarting them.

About the locos though: I always turn down the advertising option anyway. I tried accepting it once, but all that happens is the dude keeps coming back for more money. So after trying it once just for fun, from then on I turned it down. This never affected the range of steam locos I had available. Even with only the default 1.05 locos installed, you should have a LNER A1 Pacific, Class 01, Mallard, Kriegslok, 242A1 (IIRC) and later on you should get the QJ. Might be one or two others as well.

[Stoker]

Here is a little update. The last shell company that I had set loose got some of that AI "Magic Cash" and made itself a railroad. I took a look at it, and it is using an E-88!! Also, what is going on with the weird "Tanker car" first setup?? (Edit to add: ahh- figured out the tanker car deal- there are two trains sitting there, and it looks like just one with a weird consist) The company is ~ $2 million in the hole, but I can pick it up for $160k , so I think I will take it , just for grins.



Blackhawks wish for a "Back to the Future" loco seems to have been fulfilled in this scenario.

[Gumboots]

Oh yeah I remember that bug. In that scenario the diesel or steam bit only seems to be tested against the human player's company. If you turn an AI loose it'll always go electric, and will usually do something stupid like running three super bullet trains between two tiny towns that have hardly any cargo.

ETA: Just did a quick check with steam/no advertising. Out of the default 1.05 locos you should have a choice of Northern, Class 01, Mallard, Kriegslok, Challenger, U1, Big Boy, 242A1 and Class A1. This is in 1951.

Oh and a tip for the OP: quite often with this scenario, at the start of the game there will be a pile of unused logging camps up near Warwick in Queensland. This means lotsa free logs, and you have enough cash to build a lumber mill (as teh Yanquis like to call them). Put one of those right on top of a logging camp. You should clear 400k in the first year.

[Stoker]

Just as a goof, I decided to pick up that company which had an E-88 and some other electric loco, and then at the beginning of the next year decided that I would go for a company cash infusion (I have no Wool haulage to lose yet), so I started a new company with maximum investor input and ended up with $7.4 Million and sold down my previous company to 51% ownership, bought it and now have a new company with $2 million in the coffers. Amazingly, I now have the Class QJ as my only available loco, which is perfect for hauling my Wool, so I will build up that rail and see how fast I can reach the 500 load Wool quota.

[Gumboots]

I have a suspicion that somehow your chopping and changing of companies is messing up the scenario scripting. Would have to check it in the editor, but it sounds as if the way it's testing stuff is too simplistic, so it's giving stupid results. I know that if you just stick with the initial company it's fine, and that's probably all that was tested.

[Stoker]

Ya, I already took a peek at the scripting for this scenario, and saying it is simplistic is definitely going out of your way to be kind...

[Stoker]

Gold on Expert in 14 years. I know I could probably do it in less than 10 years if I focused on exactly what is needed and did not just let the game run while doing nothing for some years. The event for Gold does not register until the end of the year. (why?)



Edit to add: I forgot to squander $5 Million of my $10 Million in Personal Net Worth to meet my first advice to the OP.....