Monopoly, money and you

One of the most well-known board games can also be a great way to learn about money and investing - according to this book.

Perhaps one way to teach kids (and maybe ourselves) about finance is to play a board game. In so many ways, the game parallels our own financial life - and we can practice financial decision-making without losing any real money.

Is monopoly like life?

Yes and no. We manage our cash, negotiate, make deals, make choices, go through tough times, make investments, pay tax and reap rewards.

To do well we have to make investments. It's very hard to win just by collecting $200 each time you pass go.

There are rules, and wise moves. The better we know them, the better we do.

However, in real life, you can win without forcing others into bankruptcy.

Principles that work in the game and life

Diversify. You might have hotels on the two most expensive properties on the board, but if no-one lands on them, you still might lose.

Investments have a price and a value. They are not necessarily the same. Understanding value helps you determine whether the price is too high or a bargain.

Finding the ideal amount of cash. Holding on to too much cash means missing out on investment returns. Not holding enough means getting hit hard by expenses and missing out on new investment opportunities.

It's a mix of luck and skill. If you're a winner, other players may think it was luck, but a large amount of the success comes from wise decision-making, maximising your chances, and being in a position to benefit from any luck that comes your way.

The game has phases. In Monopoly, it's buy, build and bankrupt. In life, it's accumulate, grow and withdraw.

Wealthy people are wealthy because their money is working for them - rather than them working for money.

In summary

This is a fascinating book if you've played (or play) Monopoly. There are a lot of tips purely on how to play better at Monopoly - so if you've never played, then that could be a bit tedious. Also the author refers to the properties on the American board, so if you're not familiar with that board, then it loses some meaning.

The intelligent approach to the game, and the connection to real life finances is quite interesting.

It's also got me interested in playing the game, for the first time in a long time.

Comments

What to do with 128 pens?

I never need buy a pen again. Ever. The pen round-up. I searched the house for pens and gathered them up. We had 128. Woah - that's more than I expected. Then it was test-time. (You can get a lot done watching summer sport ;). Good ones went on the table. Broken ones in the box. Pen operations I saved a few 'broken' pens, by taking working insides and matching them with functional outsides. Particularly much-loved pens, for sentimental reasons, were given a life-extending 'ink transplant'. Final Tally We ended up with 67 broken pens and 61 good ones. And about 10 pencils. What to do with 67 broken pens? In my city Biome recycles pens . It's as easy as taking them into the store and dropping them into the giant collection box. Decluttering and recycling together - I love it. A lifetime of pens An average pen writes 45,000 words. So that dedicated shopping list pen on the fridge could write a 20-word shopping list for 43 years. Our 61 pens repre...

Four Thousand Weeks - Time and How to Use It

First question. Why 4000 weeks? That's the average human lifespan. If you're reading this you've probably used up 1000 already. If you're a bit older you may have only 2000 left. Maybe just 1000. That can be a startling thought - given how quickly each week goes by. There's so much wisdom in this book, it's hard to summarise it briefly. But I'll give it a go.... Face the Finitude If time was infinite, we could work for 40 years and not miss out on anything. We could spend frivolously as we could always earn more money later. But in the real world there are time limits. Even if we have enough money to escape the nine-to-five, our time (though more plentiful) is finite. Just like money, we will run out if we fritter it away on low-value options. "Face the Finitude" has become one of my internal phrases now. It's my reminder that I don't have infinite time to waste. It may be helpful to think of it like money. eg. I might like something, but d...

Why millionaires don't "feel" rich

We're wealthier than ever - so why don't we feel like it? Australia has gone almost three decades without recession. The stock market recently hit a record high. Our wages are record highs. Home loan rates are at record lows. We live in one of the richest countries in the world at the richest point in history. So what's wrong? Comparison Wealth is relative. So what do we compare to? Where we expect to be? "When your wages growth is only 2 or 3 per cent, you don't feel as well-off as when it's going up 10 per cent. That's that nominal distortion that people often suffer from" , says economist Shane Oliver, and that "expectations have grown a lot faster than reality." We're earning more than last year, but we want even more. So compared to our imaginary situation, we see ourselves as worse off. What we see around us? Shane Oliver again. "If you think about it - Australians today are a lot wealthier. They're living far ric...

But wait... there's less!

Search This Blog