Trade Investments - Financial Returns - Not Going Bankrupt

Game 10 has just played out the May 1700 game turn and I was looking over my own position.

Rozwi (an African Tribal Kingdom) started with a number of trade investments already in place and generating income, but so far I have only made one additional trade investment and this was only after I looked into the (games) local economy/geographic resources/(real life) historic data. I've kept my spending, so far, within budget (based upon what income I will receive, using the data from the year before as a rough guide) so I am reluctant to make further investments until the next game year.

I, also, have failed to send out any Trade Missions, nor set any up in my own territories. This decision is based on me wanting to judge my year 1700 trade returns (with no real trade investment/trade mission spending) against the, future, year 1701 trade returns (which will, at least, see me opening trade missions).      

I write this, though not giving out any sensitive information, with a view that it may help the novice (myself included) player with the tricky subject of Trade and Financial decisions in the game. How many of us, in the past, have made a hash of things and bankrupted a state due to poor decisions? (I have!)

Can I ask the other players on the forum;

How many trade investments (be they new, or the supplementing of an existing) have you made within the first year of your involvement in a game?

Do you , generally, go mad and splash the cash?

Or, like I have explained above, do you approach Trade slow and work in a considered and calculated manner?

I'd love to read anyone else's thoughts on the the subject. So cheers for any responses.
[though don't give out any of your game secrets! there may be spies reading who will sabotage your trade]

I wish you happy trade returns and that you don't go bankrupt!

For me, the answers are...it depends

If I'm playing a major power that has good finances and recruit base (such as England, France, Spain, etc), I tend to make a lot of investments. If I'm playing a minor power (like Scotland) I tend to be more careful-I don't have the recruits base to establish many new industries/trade investments and I feel I am better off investing in existing trades. The one thing I do always do though, if my nation has a coastline, is establish a fishing industry/trade (as it is also useful if the harvest fails).

If a nation has a specific historic industry that makes a useful trade investment then I do make sure I can find the recruits and money to establish it in-game. For example in the case of Scotland I always establsh a whisky industry, in China it's tea.

Like Jason, as a large power I want a lot of investments and different investments.

For a smaller position, I'm more likely to "shoot the moon" and commit a lot to one high return investment.

In a game's first few years, I try to invest as much as I can to build the base for the long haul. (with some exceptions where an invasion or other action might net me more in which case I will commit my cash to that.)

Money is the necessary pre-condition to almost everything in the game, so it pays to try to maximize it.

Personally, I think the trade system is opaque enough that trying to tease out the value of trade missions isn't worth it. If you're going to do trade missions, open them now and get a full year's value out of them.

As an African, I'd think precious metal mining would be a thing you'd do, though I'd wonder if you could get the mining advances that really improve results very easily?

I like to look into the historically traded items of the position I have.

so as Prussia I built up the Silk trade, planted trees, for the silk worms etc, not direct trade investments but help longterm.

With Russia it is the Vodka.

Tried also to find out merchants of merit in the trade areas, who historically traded for the Nation as additional "Characters"

Naming traded items also helps, in Africa, you can probably look into the ivory trad, which should be a good money winner, Coffee Plantations take time but could also be a longterm aim.

I looked into the LAOK old rule book for a few ideas on trade, here are a few,

Slaves for the Americas
Salt or Rice
Silk, Toacco, Cocos
Cotton, Sugar, Wine Cloth.
Leather, Glass, Carpets or Ivory
Cattle, Fish, Pottery.
Furs
Dyes( Required for Blue or Red uniforms)
Spices
Tea
Perfumes or tapestry
Opium
Jewels or Diamonds
Paper or Soap

Maybe that will give a few ideas for trade items, some are specific for certain trade areas. Also trade missions at home help as well as those abroad.

If you are short of recruits you can invest monies without manpower, but the returns won`t be as good. Investing in a trade region that you country is part of may also if your lucky help improve your own EH.

Also look to invest as early in the year as possible as then you get the full return on the investment.

Hope this has helped a bit.

Thank you all. What you've wrote is all very interesting.

J Flower wrote:Tried also to find out merchants of merit in the trade areas, who historically traded for the Nation as additional "Characters"

I never thought of creating a named character to operate as a trade influencer. I'll definitely have to invent one now

Deacon wrote:though I'd wonder if you could get the mining advances that really improve results very easily?

There's nothing in the rules to prevent the setting up of a mining academy by any Tribal Kingdom. You'd probably have to think of it as some sort of group sitting around a hut listening to an elder giving out advice, as opposed to an academy building with exams etc. that probably featured in the any European example.

The main issue would probably be the cost, and then the upkeep, however. Also, some of the mining upgrades feature technology not accessible to Tribal Nations, unless introduced from 'outside', so that would be an additional requirement. But its something to look into, possibly, in the years to come.

Jason wrote:The one thing I do always do though, if my nation has a coastline, is establish a fishing industry/trade (as it is also useful if the harvest fails).

Yes, I've done this in the past with European nations I've controlled. In the Rozwi case, who cannot build any sized ships, I'd need to enquire if we could build small boats suitable for use just past the surf. But then Agema would need to decide if we could also build dug-out canoes, suitable for river warfare such as those used historically in other parts of Tribal Africa.

Deacon wrote:Like Jason, as a large power I want a lot of investments and different investments.

For a smaller position, I'm more likely to "shoot the moon" and commit a lot to one high return investment.

Rozwi is a small power, so I think I need to focus on what I've already got, not diversify with future investments lest it spreads national resources too thin.

I do know about a few historical examples of trade, from the geographical area that the Rozwi Empire rules, so I'll probably introduce these as "shoot the moon" investments, as Deacon puts it, in future years.

Thanks again everyone. You've definitely given me some very useful food for thought.

Hello all,

I figured I'd revive this old thread rather than start a new one with my beginner's questions related to trade, which someone can hopefully provide some input on:

1) I started in January and my turn shows some existing trade revenues.  Do those values represent the revenues from those investments from the previous year or estimated revenues for the present year?
2) Do trade investments reset to none every year and require re-investing, or do existing investments continue indefinitely (I understand the revenues themselves will vary from year to year)?
3) The rules indicate that up to 1,000 recruits may be used for each £10,000 invested, and that the use of recruits is necessary for new products or new areas.  As someone with very few recruits, I'm trying to understand if using less than 1,000 recruits per £10,000 invested will mean that the trade investment will not succeed or be worthwhile? If not, is there a rule of thumb for the minimum number of recruits per £ invested needed for the investment to succeed?

Thank you all!

1) These represent the income from the prior year. however they are a good estimate of future income because.
2) Investment continue indefinitely, and barring any market factors should remain consistent. There is some evidence that too many competing in the market will damage returns for everyone. Also some research will improve your efficiency in some goods which should boost returns.
3) You only need recruits for certain brand new investments, typically creating a good that you've never created before. It is generally considered a bad idea to use recruits on investments unless you have to (because it's a new field) because recruits are more valuable than cash. As you build up your investments, you will generate more and more cash, and that will rise much more quickly than your recruit pool.

Thank you very much, Deacon! This is very helpful. And do you really need 1,000 recruits per £10,000 of investment? I hope not...

Prunesquallor wrote:Thank you very much, Deacon!  This is very helpful. And do you really need 1,000 recruits per £10,000 of investment?  I hope not... :(

You do not.

For almost all investments, what happens is that if you put in 1,000 recruits and 10,000 investment, you get 10,000 invested. If you JUST invest money, and not recruits, then your money counts half, so 1,000 recruits and 10,000 pounds is the same, more or less, as 20,000 pounds invested.

So doing the math, your recruits are valued economically at 10 pounds a head. Many people would happily pay more than 10 pounds a head to buy recruits. You'll also find that even if you wanted to, you can't match most of your investments with recruits because you'll run out of recruits far sooner than you run out of money to invest.

So, in general, pretty much everybody just invests money unless forced by the rules to invest recruits.

Understood. I was under the impression that for new products/areas, recruits were a rule requirement. It makes more sense that they are not as I'd already reached the conclusion that I would never have enough recruits for any kind of new trade investment... Thank you again!

They are a requirement for truly new businesses, but many businesses already 'exist' and so don't need recruits even if you haven't invested in them before.

An example of something requiring new recruits is something like coffee if you've never grown it before, or a new plantation of spices you haven't grown, or the like. You can always ask on your turn. Certainly investing in regional trade won't require recruits. Nor will opening a new mine or the like.

I got caught out by this rule when I made an investment and then ended up in negative recruit territory for a while. That is super bad for your EH I figured out!

I think asking may be the way to go. My knowledge is limited and is based on a single turn and, as far as I know, we haven't grown anything before. Our current investments are in general goods only. Better safe than sorry, I suppose!

You could also give conditional orders.

IE. Invest XX amount in XX, But only if I can do so without investing recruits.

I concur with Deacon's advice.

Recruits are essential if investing in a new trade area, but if you are just investing in Mediterranean or Italian trade and your return is already showing investment in this area, recruits should not be needed. I would suggest thinking carefully before investing in areas where your ships will need to sail past waters controlled by potential enemies since Malta is an island and all your trade will be carried by sea. You don't need to build any liners to carry your trade because it is assumed that 1L is available for every £4K of trading profit.

You can just invest cash, but it only has half the return of investments made with recruits (but most people avoid using recruits for trade investments because they are so valuable). Investments are best made early in the year.

Different players have different approaches to trade. You can specify products you wish to trade rather than 'general' goods, if there is a particular export you produce or import you need.

If I wanted to invest in trade with Egypt then I would just order "invest £100K (no recruits) in trade with Egypt" which is probably a bit lazy. Or "invest £100K (no recruits) in Levant trade"


The trade areas are given on page 9 of the main rulebook:

Levant = Mediterranean, Black Sea, Adriatic Sea, coastal Spain/France bordering the Med, Italy, North Africa, Ottomans (Crimea, Moldavia)
Baltic = Scandinavia, Polish/Prussian coasts
Maritime Europe = North Sea, English Channel, Bay of Biscay and nations with a coastline on those waters (UDP, Portugal, Spain, England, etc)
Europe = inland France, Germany, Austria
Eastern Europe = Poland, Russia, inland Crimea/Moldavia/Ukraine
America
India (including Persia)
Africa (all except North African coastline)
Far East

So your home trade area will be Levant, but you may wish to specify which countries you are investing in trade with within that.

England, UDP, Venice and Genoa tend to have a trading advantage in most markets so are harder to compete against.

Thank you both, this is all very helpful.  

Would also add further advantage of trade in specific items - General goods are really boring for privateers.

So far in G10 along with lots of general goods the French Corsairs and seized or press ganged - Timber, Wine, Brass, Fish & Livestock.

I miss the LAK days when cargoes included Gold, Silver, Opium, Gems, dyes, Spices etc

Good point, Stuart And a cargo of precious goods would certainly come in handy for the Maltese. Alas, we'll have to make do with the resources we have and/or obtain...

The Maltese have a long history of piracy.

Good long article on Maltese piracy. Free to read, but requires registration

That said, in game many maritime powers take a very muscular approach to piracy, so if done incautiously it could end badly.

Yes, I do have that one, Deacon.  Thank you. I've found all sorts of other interesting/useful articles on the Maltese, of which I admittedly knew very little a week ago , such as these two:

https://vassallohistory.wordpress.com/the-decline-of-the-maltese-corso-in-the-xviiith-century/

https://vassallohistory.wordpress.com/the-chamber-of-commerce-and-the-cotton-trade-of-malta-in-the-eighteenth-century/

I have a question about trade.
I have taken over another players position and want to invest to build up trade income.
Is there an optimal amount to invest in any area, for Example £1,000,000 in Europe, or better to split it up into £200,000 portions and invest in 5 different areas which have existing trade.
Also what are the expected returns on a £1,000,000 investment in Europe (depending on all the games factors of course)
Could I expect to earn 5%-10% or significantly more?

Cheers

Returns vary depending on:
1. When in the year the investment is made (investments made Jan-Mar tend to do better)
2. Whether recruits are used with the money (investments without recruits can be expected to only return half of the amount you would get had you used recruits, all other things being equal).
3. Your own EH (a measure of domestic demand since trade is normally a 2-way process: you may have a profitable export business, but your ships still need to have a profitable cargo for their return journey)
4. The state of the economies you are trading with (if they have been wrecked by war then prices are likely to be low, or there may be other game reasons why they might have trade restrictions on your trade)
5. Tariff rates (some players will insist that 0% trade tariffs are good, others (like me) prefer 'normal' 10% rates which at least gives the exchequer some income)
6. The reaction of the competition. It can be really irritating if you find a niche area, but as soon as you invest in it, the competition copies you and drives returns down. You will not know about this until the next income round, although you might be able to guess from the newspaper and the monthly trade rankings included in different areas. Some nations have a natural trade advantage in certain areas, e.g. Genoa/Venice in Italy.
7. Pirates, storms, or other undesirable happenings.

If you are investing in a new product or areas where you do not have an existing trade then it is essential to use some recruits to start that trade off. This may be a determining factor in how many different trade areas you want to invest in.

Otherwise, if your EH is 6 (modest growth), you invest in January in an area you already have trade in, with no recruits and no adverse actions from the competition, no major disruptions to your own domestic economy, pirates, etc, then if you are getting 20% then that is acceptable. This can rise to 30-40% by using recruits and ships to support trade.

The £1M in Europe vs £200K in 5 different areas is going to be personal choice. I've tried both approaches in different positions. As the Papacy (G10) I tend to concentrate on domestic trade to build that up to a level I am comfortable with before diversifying. More of the factors that affect trade are within my control (and as trade is overland I don't have to worry about pirates/corsairs) so returns should be more predictable. That said, the Italian economy has been hit by war so the prudent thing to do might well be to diversify. With England (G7), I have the opposite situation: there the domestic economy is poor due to a decade of war, but overseas/colonial markets are more robust so investing there makes sense. It also gives the Royal Navy a purpose to protect my traders from pirates.

The most valuable piece of advice I can give about trade is not to invest anything from May onwards because you are really wasting your money. There is no point in investing £1M in October to get a 3-5% return 2 months later. Better to wait and invest the £1M the next year, possibly after having done some research specific to your particular game/position.

Men and money 'spent' as investments cannot be recovered, so you only get one chance to invest wisely.

Vauban wrote:I have a question about trade.
I have taken over another players position and want to invest to build up trade income.
Is there an optimal amount to invest in any area, for Example £1,000,000 in Europe, or better to split it up into £200,000 portions and invest in 5 different areas which have existing trade.
Also what are the expected returns on a £1,000,000 investment in Europe (depending on all the games factors of course)
Could I expect to earn 5%-10% or significantly more?

Cheers

I think this is the sort of one where if you ask 10 of us, you'll get 11 different answers

It's hard (in my experience) to predict returns esp when new in a position. What I've tended to do is look at how much I can invest in trade, and then divide that up on a proportionate basis (very roughly) so if 30% of my trade income comes from Europe, that gets 30% of the money I have to invest. I also do specific investments in certain industries as well, so in a Chinese position I invest in the Tea Trade in addition to area trades, or with Scotland I invest in whisky. You might sometimes get an amazing rate of return (in one game I have been getting roughly 300% increase on trade investment each year) and then again you might see an increase that is less than your investment (or worse, you invest but your trade income actually drops year on year). Part of the issue is the wars of others in a geographical area can impact on your trade (either way) so you can plan your trade investments brilliantly...and have them messed up because Player X declares war on Player Y

You could ask your advisors and see what they say or you could treat your first year as a bit of an experiment, do trial investments and see what benefit they give. Just do bear in mind that investments earlier in the game year pay off better than later ones, so if you're in a game where it's in the second half of the year the investment might not pay off for 18 months.

Hope that makes sense/helps

The other thing I forgot to add ... trade is only 1 aspect of the game. The other aspects tend to assert themselves if you ignore them. So if you really focus hard on trade/economic development for a couple of years and think you are doing really well, don't be surprised if a famine comes along and knocks your EH through the floor undoing your hard work (I doubt there is a single experienced player who hasn't found this out the hard way), or some warmonger decides to plunder your land/traders to fund his next campaign (neglecting defence/armies/navies tends to encourage this). If you neglect diplomacy then it is much harder to get help from players when you need it; if you neglect religion then you are likely to find the church less co-operative; if you neglect your nobles then you may find they take a dim view of your preference for merchants and your honour slips.

All aspects of the game are in some respect interrelated, so although you do choose your own objectives, if you only focus on them and do not respect the other aspects, you are probably going to make things harder for yourself in the longer term.

Jason2 wrote:It's hard (in my experience) to predict returns esp when new in a position. What I've tended to do is look at how much I can invest in trade, and then divide that up on a proportionate basis (very roughly) so if 30% of my trade income comes from Europe, that gets 30% of the money I have to invest. I also do specific investments in certain industries as well, so in a Chinese position I invest in the Tea Trade in addition to area trades, or with Scotland I invest in whisky. You might sometimes get an amazing rate of return (in one game I have been getting roughly 300% increase on trade investment each year) and then again you might see an increase that is less than your investment (or worse, you invest but your trade income actually drops year on year). Part of the issue is the wars of others in a geographical area can impact on your trade (either way) so you can plan your trade investments brilliantly...and have them messed up because Player X declares war on Player Y

You could ask your advisors and see what they say or you could treat your first year as a bit of an experiment, do trial investments and see what benefit they give. Just do bear in mind that investments earlier in the game year pay off better than later ones, so if you're in a game where it's in the second half of the year the investment might not pay off for 18 months.

A 300% return on trade investment is very unusual, so well done Jason2! I suppose from a small base, a niche product or unique product (like Whisky) supported by all relevant trade buildings, treaties, friendly nations prepared to accept monopoly prices, and a game where most players are trying for economic development rather than war, you might get those levels of returns. But as a general expectation, plan for something more modest.

If you are taking over a position someone else has already played with then asking advisors seems a sensible first step. You should get some idea of the products you are trading from your annual trade income sheet, but not the profitability of each product.

Thinking on what both myself and Papa have just posted on trade income later in the year...there are always exceptions that prove the rules! For example, if you take on a position that historically was a trading "power" and you invest in trade later in the year, you can see much greater benefits than in a position that wasn't. I've recently taken on a trading position in game, started in September of a game year and invested in trade in my first turn and at the year end I saw 30% increase in trade income (or five times what I have invested in trade).

It is a bit of a dark art really