Saturday, May 7, 2011

Empire Avenue: Should I Stop Upgrading Shares To Increase Dividends?

Playing Empire Avenue these past few weeks has been incredibly fun. Each day, I learn something new about the game's mechanics and how to increase value for my shareholders. Today, I'm playing around with an option to automatically upgrade shares as I run out. What will happen to my dividends when I run out of shares? Will it increase, decrease, or stay the same?

In a Facebook discussion, Omar Habayeb shared the following information regarding my strategy.
The whole premise of Empire Avenue revolves alot around the buying and selling of stock....if you don't have stock for sale...people move on. Capping your shares "to increase dividend value" has not been something you needed to do since December
On the Empire Avenue blog, they state:
Dividends will now be based on your activity earnings and your network values. If you are active and have high network value, your dividends will be larger, and the amount paid per share will not decrease as you add more shares. If you wish to pay greater dividends, you can either be more active or increase your network value.
Knowing me the way I do, I have to test everything. With only nine shares remaining, what will happen when there is nothing left to buy?

One thought is that by controlling when I upgrade, I can give existing shareholders notice before I start selling again. This would give them first dibs on buying shares that will increase their portfolio value. The more expensive my shares become, the more time some will need to save up. Why not bring value to those early investors by offering them privileged information?

I'll keep you updated on my findings, but I'd love to hear your thoughts on this idea. Is it good, bad, or somewhere in between. Let's talk in the comment section below.

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Damond L. Nollan, M.B.A.

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