To some people, Monopoly is just a board game (that may or may not tear your family apart 😅) and to others, it is a makeshift school on Money Management.
“Monopoly is the formula for great wealth.” — Robert Kiyosaki
For those who are unfamiliar with the game, Monopoly is a board game where the main objective is to finish with the most money and/or property by the end of the game. At the start of it, everyone gets the same amount of cash but as you play along, the dynamics of it begin to shift as people acquire property and build houses/hotels. Usually the person with the best strategy (plus a bit of luck) wins. What if we told you some of those strategies are applicable in real life? Read on to find out 5 money lessons you can learn from playing a board game!
1. DON’T HOARD YOUR CASH
You might be thinking “It’s pretty straightforward, if having the most cash at the end of the game means I win, then I’ll just keep all my cash until the end” while that might make sense (or maybe not lol) It’s not a strategy that would work. You see, during the course of the game you could land in jail (unexpected circumstances) and have to bail yourself out and if you keep holding on to your cash while other players are making investments (buying hotels and property) you’ll most likely have to pay someone something every round and with no extra income asides the money everyone else gets when they pass go, it’s really hard to visualize a scenario where you win. So, just like in real life, saving is a great first step for proper money management but if you stay in this step, unexpected situations like inflation or health issues could eat up your savings leaving you right where you started.
2. JUST BECAUSE THE OFFER IS THERE, DOESN’T MEAN YOU HAVE TO TAKE IT.
Now, this might sound contradictory but just because you shouldn’t stash your cash doesn’t mean you should throw it at every opportunity that comes your way, that’s not a good strategy either. What you need is a sort of screening process or strategy that’ll make it easier to decide what opportunity to take and which ones to pass up. You need to be conscious of the opportunity cost involved in each opportunity you come across and keep that in mind as you make decisions. This also helps to teach you about budgeting and how important having emergency funds can be.
3. FOCUS ON CASH FLOW.
So, now you know sitting on your money isn’t the answer; neither is throwing it at every opportunity, what you want to do is focus on your cash flow. This means, asides the amount everyone gets when they pass go (think of it as like a salary) you need to find other ways to get cash coming in and balance it out to ensure you have way more cash coming in than cash going out. In the game of monopoly itself, this would mean purchasing property and building houses/hotels to get rent but in real life this could mean anything (legal 🙏🏾 ) from investing to setting up a side hustle.
4. DIVERSIFY, DIVERSIFY, DIVERSIFY
So, you bought property and you even built hotels on it, great job! But chances are that not enough people will land on your property to give you the income you need to win this game of monopoly and the same thing applies in real life. It is important to diversify not just your overall sources of income but your investment portfolio as well. Putting all your money in just one asset puts you at risk of great loss, it is better to diversify (intelligently) by spreading your assets across different asset classes.
5. PATIENCE IS NOT OVERRATED
Anyone that has played monopoly knows it can go on for hours, so whatever strategy you use has to be one that is well thought out and built to survive the long run, much like your real life financial goals. You should think of the journey to meeting your financial goals as a marathon and not a race and position yourself to make it to the end with the help of some long-term investments. It’s easier to get excited at the beginning of a goal, the hard part is staying the course, but by putting in the work and keeping your eye on the prize, you’ll achieve your goals!
So, there you have it! Monopoly of course is “just” a board game but if you really think about it, you can learn very valuable (and practical) lessons that you can implement in real life!
