Financial Lessons From Monopoly

I used to play Monopoly when I was younger (and sometimes later in life as well). The financial lessons were there if you paid attention, but it was also a good way to get the right mental habits developed for success in investing. So I was intrigued when a visitor to this website sent me the following article...

Master of the Board: A Look at Financial Lessons Learned from Playing Monopoly

By Cody Thrower

I have been a Monopoly aficionado for years. For more than a decade I have excelled at this game – sending anyone who dared challenge my mastery of the board bankrupt along the way. In the process of acquiring all of those houses, hotels, utilities, and railroads I have come to realize that Monopoly can teach us a great deal of practical financial lessons that we can all apply to real life.

Mortgages Cost Double

This is one lesson I have learned from playing Monopoly over the years – and am quite happy that I was able to learn on a Monopoly board rather than in real life! Allow me to demonstrate: some people are so consumed with the urge to acquire new properties in Monopoly that they will mortgage properties they already have – rather than putting that money to better use such as building houses and hotels on the properties they already own. The lesson to be learned here is to stay away from mortgages and use your money in the most efficient way possible.Monopoly

If You Must Take a Mortgage – Do So Strategically

The only time it is ever appropriate to mortgage anything is when you want to take some of the value that you used to have in one asset and divert it to a more lucrative asset. This principle holds true in both Monopoly and real life. Mortgaging one property to build a house or hotel on another property is the perfect example of how this would work in Monopoly. In real life, mortgaging your house to raise the money to buy a piece of empty land that you know you can sell easily and at a decent profit is a great example.

Trading is More Efficient Than Working

Money is treated as an independent commodity in Monopoly. Those who take this view in real life tend to perform much better financially. It doesn't take a lot of brain power to know that becoming a successful day trader, land speculator, or real estate investor beats doing eight hours of grueling manual labor anytime.

Play the Greed of Others Against Them

In Monopoly, offer to sell an opponent a few properties at such a great price that they will have to tear down some houses or hotels – and perhaps mortgage a few of their properties as well. This concept could play out a variety of ways in real life – especially if you are an entrepreneur!

It Pays to Be Nosy

Being nosy can be of value both in Monopoly and in real life. In Monopoly, you cannot afford to take your eyes off your competitors. Doing so will ensure that you miss out on great opportunities. Information is the most valuable currency in both Monopoly and real life. Getting good information often entails being a bit nosy.

Be Able to Turn Negatives into Positives

Going to jail seems like it would be a bad thing in any scenario – but in Monopoly it can be to one's advantage! Staying in jail can help you avoid landing on a property that has a house or hotel on it. A true business person must have the ability to turn negatives into positives. The pros are never promised, but the cons can always be counted on. That is why having this ability is so important.

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