How to Manage Your Money Like a Monopoly Champion

If you’ve spent hours when you were younger – or still do – playing the game of Monopoly, know that you were actually learning valuable lessons in everyday spending, saving and investing.

Don’t believe me? Do you think that Monopoly is just about rolling dice and truly a matter of luck?

monopoly

Why Monopoly is a Great “Teacher”

While many believe that luck plays too big a role in its outcome, or that it advocates outrageous values (e.g., bankrupting every other player), what Monopoly really provides is a wealth of real world financial lessons without the pain of losing actual money. In the process, you gain a priceless understanding of how to “play” your everyday game of managing and investing money.

Most of us begin our careers with no experience in handling money. While there is lots of good advice available, it usually doesn’t sink in without personal experience. Before we know it, we’ve made the classic mistakes (credit card debt, buying hot but risky stocks, putting off savings in the belief we can “catch up” later). I know; I’ve been there (and I had a business education!).

Early in my game industry career, I had the good fortune of joining Parker Brothers, the makers of Monopoly, and was asked to take on the role of chief judge at US and World Monopoly championships. This experience enabled me to periodically observe the best players in the country, and from around the world. I learned how they applied the game’s “secrets of success” – on the board, and in their careers.

There’s a few things you can learn from them, too.

5 Lessons You Can Learn From Monopoly

1. Dealing with adversity

As it turns out, luck exerts the same amount of influence in Monopoly as in the real world. Learn to anticipate and handle adversity in the game and you’ll sharpen your ability to deal with it in life (because, as we know,“stuff” happens regularly).

2. Avoid debt

While Monopoly provides borrowing power in the form of property mortgages, use it unwisely and you can become strapped and at the mercy of your opponents. Likewise, make too many purchases on credit in real life and your monthly budget will quickly lose its wiggle room.

You won’t be able to cope with the financial impact of illness, accidents, storm damage, or the loss of a job.

3. Manage cash wisely

Monopoly cannot be won by sitting on a stack of pretty bills. You need to invest most of them in order to grow your assets and reduce the chance your opponents will drain you before you soak up their wealth. With repeated play, you’ll learn how much cash to hold onto for emergencies and how much to invest for the long term.

Likewise, you need an emergency fund in life, but you’re not going to get rich if you don’t take on risk with the remainder and accelerate your return.

In the game, your “balance sheet” consists of assets (cash, properties and buildings), less liabilities (mortgaged properties). The difference is your net worth ($1,500 at the start).

In your real game of finance, your assets are cash, savings, investments, and personal property (including, perhaps, a home). Your liabilities include installment debts and current bills.

The difference, your net worth, needs to steadily increase.

You are wise to monitor your balance sheet monthly, using the financial tool of your choice, to regularly compute your “score.”

4. Know where you’re going

Like all great games, Monopoly has a clear objective. It may seem harsh, but its “bankrupt all” goal is both clear and decisive. Alas, for most people, setting a clear, decisive “I win” financial goal is not instinctive. But it should be.

As George Harrison aptly said, “If you don’t know where you’re going, any road will take you there.”

So what should your goal be? Perhaps this one: I want to retire at age 65 and have enough net worth to maintain my life style indefinitely. Or: I want to retire as soon as I have $3,000,000 in net worth. (Nice!)

Setting you goal inspires discipline. After you decide where victory lies, you can lay out a “road map” (plan) to get there. Doing so will help you to spot detours and sidetracks (and avoid them, if resolute).

5. Deal effectively

This is the most under-appreciated lesson taught by Monopoly.

In the game, you often need to trade to get a high-potential color group. To do so, you must negotiate effectively by showing respect for your trading partner, offering fair value and being assertive in your needs (never aggressive). Monopoly is often the first, and typically the best, training ground to learn this art.

Life becomes better once we gain a positive reputation as others will instinctively route opportunities to you. If you burn bridges, the opportunities go elsewhere.

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PhilOrbanes3Philip E. Orbanes is a founder and director of Winning Moves Games. He served for many years as head of research and development at Parker Brothers. He is the author of four books–most recently Monopoly® Money and You by McGraw Hill.

Photo by Woodleywonderworks



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