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I have a player who wants to buy masterwork tools as opposed to buying magic items that boost his skills.
The reason being, masterwork tools grant a +2 bonus to a skill and cost 50gp.
Magic items that grant bonuses to skills cost (bonus) squared x 100, meaning a +2 magic item costs 400gp.
So i guess my question is.... what is the difference between a masterwork tool and a magic item that grants the same bonus? Are there certain skills you cannot have tools for? Was that the intent?
A masterwork tool typically grants a circumstance bonus that's usually just a +2 circumstance bonus. However, circumstance bonuses, unlike most other named bonuses, stack with other circumstance bonus from different sources. A magic item commonly grants a competence bonus (but sometimes another kind of bonus) that—with enough gp, effort, and Dumpster-diving—can be quite high (although +30 is the usual limit). However, most named bonuses—like competence and insight—don't stack.
For example, the player may want to buy for his PC a masterwork tool for the skill Spellcraft first because it's less expensive then buy a magic item that grants another kind bonus on Spellcraft skill checks because the magic item's bonus will likely stack with the circumstance bonus.
Not every DM thinks that every skill will have a masterwork tool to help you with that. He may argue "What tool could possibly improve skills like Bluff or Gather Information? Hypnotic lipstick created with alchemy that spread pheromones? Sounds magical to me in D&D".
As previously in other answers, different bonuses stack. Some masterwork tools can be magically enhanced to improve their performance like a flute (Performance), thieves tools (Disable Device and Open Lock) or paint brush (Craft: Painting) for example.
The competence bonus of magical items goes up to +30, maybe a bit expensive but is 15 times more than a masterwork bonus. Even so, they may stack as previously stated.
A skill can be used for various tools. Just because a masterwork lockpicking set can pick most locks, does not mean that the DM can't create a lock that is unlocked using giant stones. Your skill bonus from magic items would still affect it, your masterwork tools would not, as they are useless in the situation.
You can only use one masterwork tool at the same time, but you can still have magic items that grant bonuses on top of that.
