As I was playing Monopoly with my son, I realized there are some profound life and money lessons that can be learned. I used to play with my twin brother when I was young, but I see it so differently now after working as a real estate agent for almost a decade.
First, let me thank my friend who left us his Dave and Buster’s card as he moved to California. We would meet up occasionally on Wednesday nights (D&B is 1/2 price games all day Wednesdays) and they have some late night food specials.
He left us over 45,000 tickets. We used some for food (select entrees can be redeemed for 1,600 tickets). We redeemed the (1980s edition Monopoly)#ad for my son for 5,500 tickets and a manicure kit for my daughter for 2,000 tickets. We still have a lot of tickets left. He also left 546.9 credits on there, so we can play games for probably at least 5 more visits.
Anyway, here are some life/money lessons we can learn from Monopoly.
- Buy assets (invest). As you go around the board, you’ll have the opportunity to buy title deeds. If you keep going around and only collect $200 each time you pass go, you’re not putting your money to work. At some point in your life, preferably earlier on, invest your money in assets (e.g. real estate, stocks, businesses, etc.).
- Learn to take some risk. As I was playing with my son, I bought every title deed I landed on. Eventually, I began to run out of money. In real life, you you may not have enough money to buy an asset like real estate. Most people take out a mortgage. I bought my first property (a small condo) when I was 24 and took a risk. That risk allowed me to slowly accumulate capital through home equity to buy more real estate. I moved up slowly and bought and sold 4-5 times before we hit $1M net worth. With most investments, you can lose money just as easily as you can gain money, but learn to take some risk.
- Be careful with debt. In my quest to buy every title deed I landed on (trying not to miss any opportunities), I mortgaged my properties to make purchases. As I was reading the rules again, I realized that you have to pay 10% interest to lift the mortgage off your title deed. I guess we didn’t play correctly as a kid (we didn’t charge interest). Also, for part of the game, I was only a few hundred dollars away from bankruptcy because I had mortgaged almost everything. The way you lose in Monopoly is by going bankrupt. If I wasn’t able to pay what I owed, I would be eliminated from the game. You win by causing all the other players to go bankrupt. In real life, bankruptcy can be a traumatic and life-altering event. Don’t take on too much debt. It’s dangerous, expensive, and it can ruin your life.
- Learn to negotiate and communicate. If you want to do well in Monopoly (and in life), you need to learn to work with others. I was trying to negotiate with my 7 year old son. I had to talk to him about trading title deeds (real estate) in a way he would understand. In real life, you have to meet people where they’re at and talk to them in a way they understand what you’re saying.
- Work with others in a way you all win. When you’re making a deal with someone, you can each get something that you want. Usually, the seller is getting money, and the buyer is getting an asset. Try to work in a way that you both win. It doesn’t have to be that someone wins and someone loses.
- Stay out of “jail” and do things the right way. In Monopoly, when you go to jail, you lose time and money (it costs $50 to get out). In real life, you can lose a lot more time if you try to take shortcuts and break the law. Do things the right way even if it takes a longer time.
- Be patient and enjoy the journey. Remember, it’s about the relationships. My son and I actually haven’t finished a complete game of Monopoly yet. Monopoly takes an extremely long time to play. The first phase is the asset accumulation phase. A lot of it will depend on luck (what you roll). Then, you get to try to make deals with other players. You’ll only benefit if you craft a deal that also benefits the other player so they’re willing to trade. The second half of the game takes the longest. You get to make a lot of investment decisions. Some will pan out and others will not. You may buy hotels on a certain group, and no one will land there. It takes a long time to play, but the point is to have fun and enjoy the journey. In Monopoly, “wealth” is created over a long time. In the same way, for most people, wealth is created over a long time. In the end, Monopoly is a game. The point is to have fun with the people you’re playing with. The same goes for life. Remember, it’s about the relationships, not the money.
Thanks for reading!