Friday, June 13

8 personal Finance Lessons I learned from Monopoly

I always knew that Monopoly was a great game to learn something from.
Why?

Because life is a game, and so is monopoly.
Thus life is a Monopoly game!!

So I googled the Net to see if there are any interesting lessons that people learned before I write my own.

But I found this article that nicely summarises all the learnings. And so heck, its better to just share with you all what he thinks than for me to write a sub-par article on it.

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Personal Finance Lessons I Learned From Monopoly

As checkered a history as the board game Monopoly has had (Monopoly: The World’s Most Famous Game–and How It Got That Way is a great book about its history), it’s amazing how much can be gleaned from it and how applicable those lessons are in so many facets of our lives. I think there are at least a half dozen million “business lessons learned from Monopoly” books but I haven’t seen any personal finance lessons, until now.

Lesson #1: Passive Income Is The Key to Wealth
This the world of Monopoly, passive income comes in the form of rent when opposing plays land on your properties. In reality, passive income can come from any source but the path to wealth comes from building up your assets so they can generate passive income. Why do you save for retirement? So you can live off your investments passively and you can stop relying on that $200 every time around the board as a means of survival. In Monopoly, you win by acquiring more land, building up hotels, and bankrupting your opponents. You can’t win by just running around the board.

Lesson #2: Luck Is Part of Life, Take Advantage of It
So you hit a few doubles and fly around the board, take advantage of it by snatching up as many properties as you can. In life, you’ll often catch lucky breaks, be sure you’re in a position to capitalize on those lucky breaks. Sometimes you’ll have an opportunity that requires a particular skill, try expanding your horizons beforehand and polishing up on those skills that are related to your current job but not necessarily applicable at the moment. You don’t need to become an expert but when the opportunity presents itself you can at least claim brief experience so that it can get you in the discussion.

Lesson #3: An Emergency Fund Is Essential
When you have only $54, a monopoly with three hotels, and a few random deeds like B&O Railroad. You hit community chest… and you get the housing renovation card. Now you have to find a way to scratch up a hundred dollars or so per hotel and you’re plum out of luck. You flip over B&O and shutter a hotel just to make the payment. Emergency funds are as important in Monopoly as they are in real life. The only difference is that in real life there are a lot more emergencies than in Monopoly.

Lesson #4: Improve What You Have
Don’t overlook the things in your life that you already have and think of ways to make them better. In Monopoly, it’s putting houses and hotels on the properties you already own, not trying to find more property. In real life, it’s about working hard at the job you already have, getting promoted, getting good raises, and setting yourself up for a financially prosperous retirement. It’s very tempting to look at what others have, especially material possessions, and think that your life would be better if you add those things… don’t.

Lesson #5: Use Jail to Reflect, Refresh, and Come Back Stronger
I’m not saying you should go to jail to get a breather, as one sometimes tries to do in the end of Monopoly, but sometimes you have to give yourself a time-out to rest and relax. Whether it’s pressures from your work or pressures from your friends or pressures from your family, it always pays huge dividends to take a step back so that you can collect your thoughts. It could be for a minute, an hour, or a week, but taking a little “me” time will always give you more energy to tackle life’s challenges with a renewed spirit.

Lesson #6: Life Isn’t Fair, It’s What You Make Of It
Everyone starts off with $1,500 and their butts on GO, so everyone starts off as equals right? Wrong. The player with the first move has an advantage over everyone else. The player with the second move has an advantage over everyone after him or her. The player that hits doubles has an advantage of the player that doesn’t. Life isn’t fair but that’s okay, the decisions you make after the dice have been thrown are more important than how many spaces you move. Look at all the professional athletes with million dollar contracts flushed down the toilet because of bad decisions? You could say they got lucky but they messed things up for themselves.

Lesson #7: Life Is About Relationships
In Monopoly, part of the game is negotiating with the other players to strike up a deal. It’s really a proxy for building relationships with people so that you can leverage those relationships for your own benefit. Small business owners build up networks of other professionals, such as attorneys, tax accountants, and bankers; because they know they will need to draw on them in the future. Regular folks like us build up our networks because it may be the contact that gets us our next job. Life is about relationships and building up a network of trusted individuals you can turn to in a jam.

Lesson #8: There Is Only One Winner
In Monopoly, there is only one winner. Okay, this last one is more a little peek at the next post about Monopoly I’ll write - Lessons I Had To Unlearn From Monopoly.

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Credits: Article copied and pasted wholesale from Bargaineering.

2 comments:

The Horny Bitch said...

Learn liao have to unlearn then what is the point of learning?!

khengsiong said...

Very useful lesson. Thanks for sharing.

Don't know how many I actually practice, though...

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