Monopoly is a family game that has been played since 1935. Besides revealing how competitive people can be, there are many money lessons that can be learned from playing this game of strategy that offers ways to manage your money, while teaching money management lessons in an easy and fun way. It also teaches you about building a secure financial future as you can learn a lot about how to get ahead financially by playing monopoly.
Here are a few lessons you can learn from playing monopoly:
1. Be Patient
To win at monopoly, you need to have a game plan, and consider every action and purchase you make. You cannot buy every piece of real estate you land on. You have to be patient and know when to buy and when to let it go. When it comes to building, you have to be careful and make sure that you do not spend all of your monopoly money on building hotels and houses. You need to make sure that you have cash on hand to pay for rent and unforeseen circumstances like jail or a chance card. This prevents you from having to mortgage properties and declaring bankruptcy early.
Similarly, in investing and purchasing, you have to be patient and take a disciplined approach. Know when to invest, buy, and when to take a pass. Note that monopoly continues till all, but one player, have declared bankruptcy. Additionally, your financial journey is a marathon, not a race when it comes to saving and planning for your retirement, be patient and grow your portfolio gradually.
2. Always Keep Cash on Hand
Monopoly rewards the players that have cash on hand. Ultimately the winner is whoever has the most cash at the end of the game. If you aimlessly land over the board and purchase whatever property you land on without a concrete strategy, you are likely to run out of cash. Without cash to pay rent or invest in your properties, you have to sell off properties or mortgage them at a discount to face value. At this rate, it is only a matter of time before you go bankrupt.
This also applies to real-life finance. It is important that you budget your expenses so you know what you are paying for, cut out the unnecessary expenses and avoid compulsive buying. This ensures that you still have money left over after paying for necessities like food, rent, and clothing. You should also save a percentage of your earnings. It is important to have money saved up for a rainy day.
3. Do not put all your eggs in one basket
You don’t win in monopoly by just owning one property on the board and loading it up with as many houses and hotels that fake money can buy. Ultimately, it is the player with the most properties who will gain monopoly control of the board. There are 40 spaces on the board; the chances that a player will land on your one property within the board are slim. It is best to purchase many properties on the board from at least one color group. This increases your chances of getting rent and making more money.
This also applies in investment. Rather than putting all your eggs in one basket, diversify your portfolio to reduce risk of exposure to a total wipeout if something goes wrong, and increase your chances of making more money. Instead of betting on one or two stocks, diversify and spread it out. Similarly in income-earning, diversify your streams of income.
4. Always Have a Get Out of Jail Card (Emergency Fund)
One monopoly tip is to keep a little bit of the money you receive at the beginning of the game away and keep on adding to it during the course of the game. This helps to ensure that you have enough money to pay for rent, buy properties, invest, have enough to remain in the game, and possibly win. This is applicable to real-life finances. It is always best to have a plan for the future as well as unforeseen circumstances. An emergency fund is very important. This is a stash of money set aside to cover financial surprises life might throw your way. Most experts advise you should have enough money in your emergency fund to cover at least 3 to 6 months’ worth of living expenses.
5. Generate Passive Income
In Monopoly, investing in your assets is important. Owning a hotel is one of the ultimate goals for players because you can charge the highest rent when someone lands on one of your properties with a hotel. You might have skills, talents, or properties that can generate extra income apart from your wages, improve what you have. If you build hotels on your property rather than houses, the payout is bigger. Work on your skill or talent, and make out a strategy to generate passive income with it. For instance, you can create and sell a “how-to” e-book, promote a sponsored video on how to do something, or you can rent out that room or property you don’t use and grow your wealth while you sleep.
6. Spend Wisely To Avoid Debt
If you spend, spend and spend some more in monopoly, you will soon be out of money, and you will either be out of the game or asking someone to bail you out financially. This also applies in real life: spend your money wisely to avoid debt.
You never know what “chance” card you might be dealt with in life, it is therefore important that you are informed on ways to handle your finances and money better. With this, you are well-equipped to handle these situations well. Pay attention to all the little details and be intentional about your finances and hopefully, you are able to grow and maintain your wealth efficiently.
Here are some other articles on the website that can help you manage your finances better;