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Insider: Why I Profit from Magic: The Gathering

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The past few years have seen a large boom in MTG speculators and financial experts. It seems every significant online retailer has at least one finance writer. Follow enough MTG people on Twitter, and you’ll inevitably believe everyone has an opinion on everything related to MTG Finance.

After all, there are now 155 pages in The Source’s finance/card prices thread. Read through a few pages and you’ll quickly agree - everyone has an opinion.

The rapid influx of people interested in the game’s monetary aspect is intriguing and today I'll analyze the driving force. This is important to understand because I feel some people believe MTG speculation is the best way to achieve certain goals, while surely there are superior alternatives. It all relates back to the predictability of our human nature to behave irrationally.

Living the Dream: Going Infinite

Many players (including me) have a goal of funding their MTG hobby through savvy trades and wise investments in cardboard. We stock up on dozens of a hot card that may see a spike in value. We dig deeper into the metagame to identify the potential break-outs, and we go after aggressively priced Legacy staples to trade down into profit.

All this is done with the hope that we can slowly build our collection and essentially enter a few tournaments for free. Making money is nice – making money while doing something we love is living the dream.

This optimistic outlook is inspiring, but the thought process is inherently flawed. For example, what is the opportunity cost of my owning 40 NM Revised Dual Lands, a few sealed booster boxes, and a lineup of other Standard and Legacy playables? The collection may be appreciating and I love having a hobby that nets me cash but is this really optimal from a financial standpoint?


(chart courtesy of blacklotusproject.com)

Once in a while I will observe price trends showing an increase here and a decrease there, which then impacts my MTG portfolio by a fraction of a percent. On a rare occasion, I will make a killing on a card like Scroll Rack or Food Chain thanks to some sudden hype. But aren’t there other investment opportunities passing me by in the meantime?

While I am slowly making bank on a couple sealed booster boxes of Unhinged, my [Wall Street] stock portfolio is experiencing rapid price swings weekly. While I may be profiting hundreds of dollars in my Magic hobby, my retirement fund is advancing by the thousands. Others may even have access to additional opportunities – real estate, commodities, currencies, etc.

So again I need to ask the question: why are we so interested in sinking hours of our time into research in order to gain an amount of money we could make in a month of passive investing? It cannot be simply to fund our hobby. There are many other opportunities out there to make some cash which carry less risk than a collectible card game. (Note: exceptions would be the ultra rare and unique cards, which are more like an investment in art than in a risky stock).

Enjoyment

One level deeper we discover a stronger motivating factor – the fact that we enjoy the adventure. Before I actively dealt in cards, I would leaf through a trade partner’s binder and drool in jealousy over the value within. Each time I asked myself: how was it possible that someone could possess such a valuable collection without spending tens of thousands of dollars in booster packs?

Now, after actively buying, selling, and trading Magic: the Gathering cards for a few years, I have seen so many cards pass through my fingers. The once intimidating fifty dollar trades can now be made at the blink of an eye. I barely have to think twice before making a $100-$200 purchase if I am confident value could be made. Practice has made me even more adept at scouring the internet for deals.

But, in all honesty, the Legacy boom was really the only catalyst to a gigantic price bump in my collection. Without beating the majority of the playing field to this format, it’s very possible I could not have come this far. While it is inspiring to try and find the next boom in the game (EDH, Modern, etc.), I really haven’t made such a large percentage in profit since.

If my goal was to enhance my trading experience by acquiring higher valued cards, couldn’t I simply invest the cash in the stock market and take profits/dividends and use them to purchase cards? This would still net me the valuable cards with which to trade while not taking on the high risk of investing in a card game. It seems there must be more to the hobby that is motivating me to invest so much time and money to simply earn a few bucks.

Deeper Understanding of Human Motivation

There is a unique aspect to dealing in Magic Cards that I cannot experience when trading stocks – the personal interactions.

The enjoyment I have in dealing in Magic Cards, making a solid prediction, and profiting on a speculation all carry a value unmatched by my stock investments. This is really the driving force behind my desire to deal in cardboard. When I do profit successfully, the hobby is even sweeter. But even if my portfolio remained neutral in value year on year, I would still be enjoying a hobby, networking with a great community and hopefully making a difference.

In a way, these different levels of accomplishments from MTG trading is relatable to Maslow’s Hierarchy of Needs.

On the safety level, one needs to have finances in order to sustain the hobby. Thus, we are motivated to simply gain value when on this level.

One level higher (love/belonging), we start to make connections and develop friendships when we participate in the hobby. This is where the distinction between investing in Magic Cards and investing in real estate / the stock market starts to manifest itself. I love being able to share speculation ideas in the QS forums and swapping success stories on Twitter. While this can still be done to a degree with the stock market, there are subtle differences.

At the esteem level, one develops a level of confidence and respect within the MTG community after some successful speculations. In my view, this is where I am currently operating. I love making a few bucks on the game and making connections, but gradually earning respect from the MTG community is immensely rewarding. Despite the fact that I’ve done fairly well in the stock market, I will never have the same level of respect on Wall Street as I do within the MTG community.

This is why I speculate.

Self-actualization

In an ironic sense, I am attempting to transcend to the level of self-actualization by writing about self-actualization. What I mean is that I am thinking creatively about MTG Finance and sharing thoughts that no other writers have done in the past.

Writing that one should buy Temporal Mastery and sell Snapcaster Mage soon really only addresses the safety level of the hierarchy above. (Disclaimer: I currently own no Temporal Masteries but I may pick one up soon if I feel demand may pick up).


(chart courtesy of blacklotusproject.com)

Even articles about trading and fostering a healthy culture only crack the esteem level. But taking a step back, analyzing the game for what it is and identifying underlying human motivators in a creative way – that is a level on its own.

Sometimes such articles are a hit, and other times the risk may not pay out. But, in the end, I believe these conceptual articles are insightful in their own way, just as I participate in MTG speculation for my own unique set of motivations.

I’ve analyzed why I’d rather spend 10 hours to make $100 in Magic trading than 10 minutes to make $1000 in the stock market. I’d challenge you to consider how much time you’re spending on the hobby and how much profit you’re netting.

I’m not only in it for the money. Are you?

-Sigmund Ausfresser
@sigfig8

Sigmund Ausfresser

Sigmund first started playing Magic when Visions was the newest set, back in 1997. Things were simpler back then. After playing casual Magic for about ten years, he tried his hand at competitive play. It took about two years before Sigmund starting taking down drafts. Since then, he moved his focus towards Legacy and MTG finance. Now that he's married and works full-time, Sigmund enjoys the game by reading up on trends and using this knowledge in buying/selling cards.

View More By Sigmund Ausfresser

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15 thoughts on “Insider: Why I Profit from Magic: The Gathering

  1. Great article Sig!

    I'm in it to keep this hobby affordable actually. Most importly I want to catch quick rises before the shop owners catch up (for example getting a set of Capture of Jinghzou at 50 each shortly before the rise or Eureka's at 20 each when SCG raised their buy price considerably). I may not actually be making much of a profit, but I know that I will build decks that use these cards eventually and if I would have to purchase one now it'll cost me about as much now as that set cost me. The 'profit' for me is in the costs saved. Obviously I won't always find deals as good at these, but on the whole I tend to be able to stay reasonably ahead and save myself enough money to make it worthwhile.

    Actually just made an offer on a pretty unique card, a Sylvan Tutor with flipped back, hope I get it :).

    1. Thanks for the comment! Your approach makes perfect sense. You're not out to make bank like a retailer does. You actually want to keep the cards for use, and you'd prefer to purchase them at the right time and right price. I forgot that some people like to keep their cards 🙂

      I have some cards I want to keep permanently, but my goal has been to use profits to buy other staples I want to keep. But perhaps there's a different way…that's what triggered my idea for this article. The Maslow reference just seemed to fit in nicely!

  2. My goal for this year is to be break-even in Magic regarding tournament fees, shipping costs etc. I think I spend too much time browsing on forums/internet for investment opportunities than playing poker for example. Having the opportunity to meet my friends/other people 3 times a week for Magic is also time intensive but immensively fun

    1. I think I have the same problem as you – I spend hours browsing the internet (MOTL, eBay, Amazon, cardshark) for opportunities to make a few bucks. There's easier ways to make money. But none of those easier ways give me the satisifaction I get when I network with the MTG community.

      1. Do you think this is a problem or a mere ''tier'' we have to satisfy as you highlighted in your article (Hierachy of Needs)

        I think it sometimes is when I prevent myself from spending too much. At the same time whenever I get dragged along in lets say 10 hours of draft with friends, I feel like I dont see it is as a problem

        1. Supposedly, we need to satisfy a lower tier before advancing to a higher tier. My assumption for this article is that the activities we decide to do fall into one of the tiers in the hierarchy. If you have the time and you treasure building friendships, then you are surely satisfying a need. If you are curious about the higher tiers, think about whether you are building a level of respect through your play. Also, you could try to open up a deeper conversation about the game itself, for example, citing one of my articles :-). These could be ways of satisfying higher needs by doing what you love, as I am attempting to do with my weekly articles!

  3. I like this article. I was once asked why I don't just get a job instead- I'd surely make more money. And yet, I much prefer my happy manipulation of fewer resources to the slog through a job that I don't want to do. The entire thought process behind fascinating to me, and theory crafting is far more interesting than any alternative form of employment. I truly enjoy talking about the nuances of how to interact with people, a notoriously uncontrollable variable, to maintain consistent results. Well worth my time and attention in a way that my other financial opportunities inherently aren't.

    1. Thank you very much for commenting! You've hit the nail on the head – we all could probably make more money doing something else. So if it was just about paying for our hobby, this would be a highly inefficient way to approach the objective.

      Instead, we all get a higher level of satisfaction from the hobby. It's nice to make a few bucks, but the networking, community building, analysis, etc. all ignite a passion within our hearts that a job can't reach. My goal is to find a career where I get that same fire lit, but so far I've fallen short. So I'm relying on Magic to satisfy my higher level needs and using my job to satisfy the lower ones (safety, family, etc.). It's a good system for me.

      I love how we can connect Magic: the Gathering, a collectible card game, with concepts in psychology. 🙂

  4. Great article! For me, speculation is a way to remain involved in a hobby that I've had since 1994 and can't let go of. Being 34 and having a 6 month old son, it's rare that I make it to FNM and I have a macbook so I cant play online. When I get to play, its usually limited at a pre-re or playing commander casually with some friends once a month. The only way I can really remain involved is finding foils for my commander decks on MOTL or ebay or by buying and selling cards to fund my purchases. Along with this, there's something about being correct about a big speculation that really gives me an emotional boost.

  5. Thanks for commenting!

    I have a 5 month old son myself, so it's also very rare for me to get out to tournaments. But I can buy, sell, and trade through online channels during the small bits of free time I get. And by making a few bucks here and there, I can keep building my collection for a significant discount! I know exactly where you're coming from.

    Also nice when you score big…but even my biggest MTG score is still only 1/10 of what I get on a "good" stock purchase. Still, making money with the game feels more rewarding 🙂

  6. No, making money is rewarding in itself. I can just spend the money I make on Magic cards. Increasing my collection is my ultimate goal. I love a good deal and I like that I can use extra capital and timing to extract free cards from my free time.
    If you got some stock tips, I'd just as gladly look into those as well. Email me.
    jngasque at google's mail service.

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