Years ago, while playing the game Monopoly, I later discovered I was also learning financial literacy. I wish I learned more in some of the tedious and dry classes I took as electives in college!
Monopoly teaches Earnings, Cash flow, Savings, Mortgages, Loans, Real Estate Purchases/Development, Strategy, and more. This past weekend I played the game to refresh my memory and document some valuable lifetime financial lessons.
A GAME’SLIFE LESSONS
AVOID BEING STUPID – BUILD YOUR COMPETENCY AND STRATEGIES
When I first played Monopoly, I had no strategy. As I played and often lost, I observed and mimicked the winners’ techniques. I begin to build my competency and my winning percentage. Berkshire Hathaway’s Vice Chairman Charles Munger once said,
“I try to avoid being stupid….The single most important thing is to know where you are competent and where you aren’t. The human mind tries to make you believe you are smarter than you are.”
The lesson I took from Monopoly, winning takes work! You must observe, listen, and learn. When you see something is not working – STOP. Recently, I conducted a few Zoom sessions discussing how to invest in stocks. I feared some people would start investing their hard-earned money based on three hours of Zoom workshops. I cannot teach you how to be a Chemical Engineer (which took me four HARD years!) in three hours, nor how SUCCESSFULLY to invest in stocks and real estate in three hours. PUT IN THE WORK AND BUILD YOUR COMPETENCY!
AVOID BEING STUPID – BUILD AN EMERGENCY FUND – NOW!
In 2020, State and Local governments shut down schools (impacting parents’ ability to work) and jobs. Millions of Americans lost their wages overnight, and few had emergency savings. The average American household cannot pay a $400 emergency bill. It cost that much to get a plumber out of her truck!
Monopoly also demonstrates life throws us good and bad luck. In 2020, my heating system, air conditioner, and refrigerator stopped working and were replaced. Monopoly teaches you must have the cash to pay expected and unexpected costs, including taxes, mortgages, home repairs, etc., and you MUST SAVE FOR THE FUTURE! Just today, I spoke to my Property Manager about a new potential real estate investment.
Life has thrown more emergencies (Employers going under; Routine Layoffs, etc.) my way than any Monopoly board. Make sure you have six months (preferably twelve months) of emergency funds to get you through a deluge of RAIN, SLEET, AND HELL/2020!
AVOID BEING STUPID – BUILD A BUDGET
To be a successful Monopoly player, as in life, you must budget and plan your purchases so you can get around the board again, earning more cash. Life and Monopoly boil down to simple rules that are achieved by careful budgeting.
- Earn money by passing Go (In real life, we have to get up and GO to work.)
- Spend less than you earn, adding to your emergency cash and savings
- Build and Maintain 6-12 Months Emergency Savings
- Invest your savings in assets that appreciate, such as real-estate
- TAKE CONTROL OF YOUR DESTINY! OWN IT!
AVOID BEING STUPID – INVEST IN APPRECIATING ASSETS – REAL ESTATE
The player with the most properties gains a monopoly of the board. As other players pay you rent money, you make improvements on your properties and collect higher rent. In real life, acquiring assets that appreciate and yield rent or dividends provide passive income. Warren Buffets loves to make money while he sleeps, and so do I! Instead of relying only on your hard work and earnings, add rental properties, collect rent, and grow your net worth.
AVOID BEING STUPID – GET STARTED!
Too many people want to spend $2,000 on a get rich quick with Bitcoin course or buy “How To Become Richer than Jeff Bezos” book, versus developing YOUR strategy and putting in the hard work to achieve financial freedom!
I purchased my first rental income property one year after graduating from college. That property appreciated and has a value today of about $200,000. Suitable investments will see excellent capital growth over time. In Monopoly, as in life, the board’s cheapest property can bring in high rental income.
Finally, stop looking for shortcuts to financial stability and wealth and accept that you have to work hard and plan to succeed. You must make the most of the opportunities which come your way, and remember, LUCK IS NEVER A STRATEGY FOR SUCCESS!
I came from a family that never read The Wall Street Journal and did NOT talk about the stock market over dinner. We did, however, play Monopoly. An inexpensive game I credit with introducing me to real-world financial literacy. It was up to me to continue building on that education
Life, just like the game Monopoly, allows people to take advantage of their opportunities to win. If you have kids, play this game and help them master financial literacy early. The sad reality, your kids may learn more about financial literacy playing this game versus schooling, including college.
What’s REQUIRED is for parents to be parents and TEACH THEIR KIDS.
PREVIOUS APPLICABLE BLOGS
LEARNING TO MANAGE YOUR BUDGET LEADS TO WEALTH!
THE NEED FOR EMERGENCY SAVINGS – MORE IMPORTANT TODAY THAN EVER!
GOVERNMENT SHUTDOWN DEMONSTRATES WHY EMERGENCY SAVINGS IS NOT A WANT BUT AN ESSENTIAL NEED!
A 52 – WEEK SAVINGS PLAN SO SIMPLE EVEN I DID IT!
STEP #1: BUILDING YOUR “A” REAL ESTATE TEAM!
STEP #3: BUYING THE BEST MONEY MAKING INVESTMENT RENTAL PROPERTIES
REAL ESTATE INVESTMENTS – THE BEST WAY TO BUILD YOUR WEALTH!
WE CAN FINALLY SOLVE THE RACIAL EDUCATION, HEALTH AND WEALTH GAPS IN AMERICA WITH FINANCIAL LITERACY
THE MOST IMPORTANT DECISIONS YOU WILL MAKE – CHOOSING YOUR “TRUE FRIENDS”
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I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger with an N.C. State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.
I left a corporate career because I desired to make a difference as a speaker and writer. I was blessed to be coached and mentored by strong women and men in my family and professional life. It is my time to serve and give back.
I started my first business at ~13 years of age (a small but brilliantly created plant nursery). I am a successful investor in stocks, options, real estate, and happy to share my finance and investment lessons learned with you.
However, I am NOT a licensed financial advisor. Please do not construe my suggestions on this blog as recommendations for your situation. For individual financial advice, please seek your licensed CPA or fiduciary financial advisors.
I write this weekly blog to make an impact by reaching an audience and demonstrating the need for financial literacy. I will help you get there.
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