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

Ethical Investing for Australians

I write about investing, because it's a key part of life. Spending less and investing means an automatic income. An automatic income means we can work less (if we choose) and definitely stress less. But where to invest? What to invest in? Many people expect their money to be invested responsibly and ethically - rather than making money through things like cigarettes, weapons, casinos, adult entertainment, environmental destruction, and pollution from fossil fuels. Those are all things we could probably do with less of. So how do we invest to get good returns - and to have a positive effect on the world? Here are some sources I've seen: Ethical Investing in Australia At Frugality and Freedom , Michelle has done a fair bit of research into Ethical Investing in Australia . For herself, she's chosen Bank Australia for banking, Australian Ethical for superannuation, and two exchange-traded funds ( FAIR and ETHI ) for her share investing outside of super. She also gives detail...

How to waste a year's wages

A friend recently asked me why it is that so many people (on good incomes) are struggling to save. Often the big three money areas are housing, transport and food. In one sense these are necessary items. But what we spend on them is often way more than necessary. I crunched some numbers on how much extra my wife and I could spend on these things - if for some reason we wanted to burn our money. 1. Housing Our apartment is fairly nice, but also cost-effective. I've mentioned how choosing it saves us $1,800 per year , compared to a similar one we saw. The high end of 2-bedroom apartments in our suburb is $305 per week more than our apartment. Not $305 per week. $305 per week more than ours is. I cannot get over that. Sure it's new and modern-looking, but that's a lot of money. It's an extra $15,860 per year above what we pay. 2. Transport The Australian Automobile Association lists the costs of owning and running a car. It includes many often-overlooked c...

Don't dump on charities

Netflix causes mass dumping. Here's an alternative. January is usually a big month for physical donations to charity. In 2019 it's been over-the-top (literally) as charity donation bins have been overflowing with items. The Netflix series "Tidying Up" by famous declutterer Marie Kondo (see her book ) has inspired many to declutter their homes. But in the process they've cluttered the streets. What's so bad about donating? When the bins overflow the extra items are thrown away. Having been in the weather, the rain and on the ground, they are classified as contaminated and cannot be sold. To make it worse, much of what fills the bins is not good enough to sell, and is also dumped. Bad donations hurt charities 13 million dollars. That's how much it costs charities to deal with all the junk we dump on them - 60,000 tonnes a year. Lifeline says half its stores have stopped accepting donations. We might think we're helping, but that's a lot ...

But wait... there's less!

Search This Blog