Savings

Texas man invests savings in buying virtual property

AUSTIN, Texas (KXAN) — Buying a property is a big investment, but some people invest in virtual properties.

Justin Reed says he paid $18,000 for the Khorum Coast, a virtual piece of land in the Entropia Universean online virtual reality game.

“I know that sounds like a lot, and it’s a crazy thing to tell someone that, you know, I’m a virtual landowner, and I put all my savings into it. But I believe in Entropia,” said Reed, whose avatar name is David Joker.

That’s because Reed has been playing the game for almost 20 years. Along the way, he cashed in $5,000 from the game to help pay for his education.

Now, he hopes to make this virtual land investment profitable in four years.

“I get income based on whatever a player discovers there. If they keep mining, I get 3% tax income on that. And that’s how it is that I earn my income,” he explained.

He said he pays $60 a year to keep animals stored on his land, but no property taxes.

“It’s not like I’m buying a business or property down the road, and all of a sudden the taxes and the value of the property are going up, and I can’t afford it,” Reed said. “I will always own the coast of Khorum, and all it will cost me is $60 a month for my creatures.”

Entropia calls itself the oldest metaverse in the world. It was launched in 2003.

“If you like the risk and you’re willing to gamble, which is basically what’s happening in this digital world, you know, it’s a good place to gamble,” said Paul Toprac, associate program director of game development and design at the University. from Texas to Austin.

Toprac said these types of worlds are getting bigger with more and more companies buying.

This could mean more non-gamers start playing on all platforms, like Entropia. Or it could mean more people are gravitating towards recognizable names, like Meta, formerly Facebook.

“Well, Meta is going to release its thing, and Apple is going to release its thing and Microsoft. And now those same users are all going to migrate to these other platforms, in which case you’ll have very few people to play in this space” , explained Toprac.

He said that eventually we’ll probably see even more virtual reality and mesh reality. But he advises to start small when investing in the metaverse.

Reed has earned around $1,200 since his investment in late March.

“How often do you start a business and make money almost immediately in the first month?” he said.

He admits it was nerve-wracking at first, but he still thinks he made the right call.

“I would say anything can be a bad investment. I could have gone out and opened a bakery with my money, and no one could have bought my bakery buns,” he said. “With this, I just feel like I have more control.”

Reed ultimately hopes that the money from the Metaverse will allow him to retire from his retail job.

“I mean, as long as this game doesn’t end up going downhill and going kaput, I’ll always, always have my land, and I’ll never be unemployed the rest of my life,” he said.

Toprac reminds people that they still have to report virtual world income to the IRS. This means that once you cash out your virtual money for real money, you are taxed.