• bobofraggles

MTGO Econ 101: Dollar Cost Averaging




Welcome to the MTGO Econ 101 series, brought to you by the Magic Online Society. The goal of these articles is to find a way for you to play MTGO without absolutely busting your budget, and maintain value in your collection.


We have already talked about how to build your MTGO collection for FREE, and those articles have been very successful. Today though, I wanted to bring you an article talking about something that is another strategy to build your collection, it's called Dollar Cost Averaging.



What is Dollar Cost Averaging?

For those who don’t know, Dollar Cost Averaging is a term mostly used in investing with the stock market. What it means is that every month, regardless of how the market is performing, you are investing the same amount of money into the stock market or in the case of MTGO, Bot credits. Over time, you will benefit from when the market is down and you will not benefit when the market is high. So with that plus and minus over time, you “average” a set amount of value.


This is the best way to build wealth long term in investments, and I strongly believe that it is the same with your MTGO collection. Your MTGO collection is private money that can be converted to public money if needed. You can sell your collection back to CardHoarder for real USD, which is a huge positive of the program compared to its counterpart in Arena. Whatever money you put into Arena, stays in Arena. This concept is also my biggest gripe with rental services, although they do wonders by allowing you to switch decks back and forth, the money you give to the rental service is gone to you, but if you purchased the cards, you retain the value of those cards. Something to keep in mind as we continue in this article series.


Before we continue, I want to talk about something more on the personal side. MTGO collection building is not investing, it should not be considered in any way part of your investment portfolio. The money used to purchase this collection should be from your free spending part of your budget. Before you even consider building your MTGO collection building, have your personal finances in order by:


  • Having enough cash reserves to cover your deductibles in case of an emergency (medical insurance, car insurance, homeowners or renters insurance).

  • Prioritize your budget to pay off your high interest debt (credit cards, high interest car loans, other high interest debt)

  • Making sure that you are not overextending each month to play this great game called Magic: The Gathering



Putting yourself into this position means that it will be less likely that you will have to liquidate your MTGO collection to pay for real life events. I personally have done this to pay for a new roof on my house and although I do not regret it, I do miss my collection sometimes (I’m slowly building it back with the strategy outlined in this article). I could have used my real life emergency fund for the roof, but I chose to allocate the MTGO collection instead, keeping my cash reserves fully intact and keeping peace of mind.


So make sure that your personal finances are in order before you attempt this strategy or you will find yourself not getting far before you have to liquidate the collection. If you are not in this position, try building your MTGO collection for free instead, until you are in a more stable financial position.


So how do we dollar cost average in MTGO?


It’s really simple, by using Bot credits from CardHoarder. This can technically be done with other services such as MTGOTraders, but since the MOS is sponsored by CardHoarder, we will utilize them as our base, not to mention, their bot credits are cheaper per dollar than MTGOTraders. So let's get into the details.





When you purchase Bot credits from CardHoarder, they get saved to your account. You can utilize them anytime that you like once they are applied to your account. You can use these credits to purchase cards from their website or directly from their bots. When I'm purchasing a lot of cards at one time, I like to order from the website and have a delivery bot send them to me, but if I'm looking for a few specific cards, I will utilize their in program sell bots.


In deciding how much to dollar cost average, this is where a real discussion with yourself needs to happen. Your dollar amount per month will be different than someone else’s, depending on your goals. If your goal is to play EDH and build many EDH decks, chill and have a good time, you can probably get away with as little as a dollar cost averaging 10 dollars per month. If your goal is to play competitive leagues and big events, it's probably best to up that, maybe 50-100 dollars per month (what you would have paid for a rental service anyway!!!!).


CardHoarder bot credits cost .92 cents per bot credit if using real world currency. This is great, because you get an 8% discount. So if your dollar cost an average 20 dollars, you end up with 22 credits each month. So that's another positive.


Pros of Dollar Cost Averaging

So let's utilize a case study. For this example, we will utilize the cost of using a rental service, the most popular ManaTraders GOLD rental capacity. If you used this rental service, you would pay 56.95 dollars per month and have access to 920 tickets of value at any one time. For the 1 year of service, you would have paid a total of 683.40 USD for the year to have access to 920 tickets worth of cards.


The issue here is, after you have paid the 683.40, you will only still ever have access to that 920 value of tickets. If you did this for 2 years, you would have paid 1,366.80 USD, and still have access to 920 tickets. Now for the short term, in the timeframe of months, it makes sense. For longer than 1 year, it is not economically savvy. Now let's pretend, instead, we dollar cost averaged that same 56.95 USD per month in purchasing credits instead of using a rental service. With the 8% discount, you could purchase 61 tickets in value every single month for 56.12 USD. If we did this for 12 months, you would end up with 732 tickets in value over the same timeframe as using the rental service. Additionally, this value would stay on the account and your collection would be worth money, instead of that money disappearing into the rental service income flow.


Taking this a step further, if we did this for 2 years, we would have 1,464 tickets in value. We would have access to 1,464 in ticket value permanently. If we were smart about the cards we purchased, only purchasing the ones we need, saving bot credits for when new sets come out, we would not minimize the “new set effect” where we would need to pay hundreds of dollars at one time for new card releases. Economically speaking, Dollar Cost Averaging is the best way to build your MTGO Collection. This is best for players who like specific formats and specific archetypes that can be expanded over time.



Cons of Dollar Cost Averaging


Remember earlier, how we talked about knowing your goals as a player? We are about to go into detail on that. Dollar Cost Averaging will not work with every player and rental services will be better than a slower growth approach. The biggest con with Dollar Cost Averaging is time. It takes time to get access to the ticket value that you would get very quickly with renting.


You would also be more hesitant to purchase expensive cards if you are dollar cost averaging, since those cards would eat away at your available tickets. Over time, it's undeniable how much better it is for you to dollar cost average, but the players who are “grinders” and compete at the highest levels, this is not for you.


Highest levels of competition on MTGO, you will need to access many different decks and formats at the switch of a hat. There is a pseudo value to having access to 920 tickets of value. You can change 2 decks of different formats in the same day, giving you access to 1840 in ticket value. While if you purchased the cards, you could not do that. If you wanted to play 2 completely different decks using a completely different 75 cards, you would basically have to start from 0, which takes time. Now to be fair, magic is normally like that, Manabases for example tend to cost the most and can be shared across many decks and formats, but it can happen.


The Hybrid Approach

If you are a grinder, someone who changes decks and formats to win the meta and competes for Qualifier Points, renting may be for you. What is suggested for these players is a hybrid approach to Dollar Cost Averaging. This means paying for your rental account, while simultaneously purchasing Bot credits at a smaller rate. There is a huge benefit here purchasing staples of formats, building your collection value, while over time, reducing the amount that you need to rent. For these players, we LOVE the CardHoarder rental program.


CardHoarder rental program, lets you set the ticket value that you need to have access too. You set the ticket limit and you pay 2.5% of that per week, or 10% of that per month. If I set my magic budget at 60 dollars per month, which is the cost of an average new video game, I can have access to 600 tickets at a given time.


What if we instead had access to 500 tickets, 50 USD per month and used the other 10 USD to purchase Bot credits? I can use these bot credits to purchase staples, such as manabase staples, and over time, I would only need access to 400 tickets worth of cards and then I would buy 20 USD in bot credits each month. We would continue this method until you are weaned off the rental services and have enough cards in your account to play any deck in any format that you want.


This method is the best of both worlds and is recommended for those who wish to stay on top of the metagame, while simultaneously not throwing their money away each month. Math doesn’t lie and retaining value in your collection is never a bad thing!



Tying it all together


The MTGO economy can be tricky at times and it seems like it can be a money dump. That is not the case if we use logic and math to help guide our decisions. Magic:The Gathering is an expensive hobby and it's likely that will never change. We, the players, need to be smart about how we allocate our funds going towards this game. I do not want to see players throw money away each month and not get their value. Utilizing the above strategies, you can enjoy the hobby of MTGO while not breaking the bank. Please reach out with any questions, suggestions and we can update this article over time.

Thank you for reading,


Danny aka BoBoFraggles