Monopoly, a real estate trading game that nearly everyone plays for fun and for a chance to be a pretend real estate tycoon. Be it playing this game as a kid or with your kids, the board game Monopoly (or its latest card version Monopoly deal) has many lessons to teach on finance. Whether you are a seasoned investor, a budding entrepreneur or personal finance novice, the game has something to learn for everyone.
A step back into history tells us the board game originated in 1903 and was called Landlord. Though credits of the game have been given to Elizabeth “Lizzie” J Phillips, it was Charles Darrow who is most commonly awarded with its creation. Darrow gave the game its visual appeal and believed in the game to market it across the nation after large game companies rejected it’s worth.
In 1935 Darrow eventually went onto sell the game to the Parker brothers (George and Charles) who purchased the remaining inventory of around 7500 games and sold them in the market almost instantly. By Christmas they had sold 250,000 games in total. With the demand soaring, the game hit its 1 million benchmark the very next year!
Here are a few personal finance tips the board game teaches you for life:
Make your money work for you – The objective of the game is similar to the dreams, goals and ambitions people have in life to amass wealth and be content at the same time. The smart way to create this wealth would be to make the right investments and let your money do the working to bring your returns.
Diversify your portfolio – Though an old saying ‘Don’t put all your eggs in one basket’, it still holds good! A game of monopoly teaches you not to invest in only high value properties but to spread your investments across properties of different values. Expensive Monopoly properties such as Shrewsbury Road or Ailesbury Road tend to limit your ability to collect rents and ultimately to buy houses and hotels. Usually the winner is someone who spreads out his or her properties throughout the board and has multiple chances at capturing rents.
Liquidity (Always Keep Cash on Hand) – By far, this is the most important lesson in both the game and the financial world. To win in a game of Monopoly you have to be the last player left, the last one to have money. So if you go about buying up everything on the board, you are likely to un out of cash to pay your financial obligations.
Be Patient – To be successful in Monopoly or in life you have to be patient and have a game plan. If you are impatient and start buying every piece on the board you land on, you will quickly find yourself out of money. Therefore, you have to be patient and know when to buy and when to take a pass.
Successful investors don’t invest based on hope, they invest with a disciplined approach. Patience is a very integral part of that approach.
On a lighter note here are some fun facts about the game:
- The Parker Brothers have printed more monopoly money than the Federal Reserve has for the United States.
- The prize money for winning the Monopoly World Championship is $20,580 — the same amount of money there is in the game’s bank.
- If you stacked up all the Monopoly sets made, the pile would be more than 1,100 miles high!
- The most expensive Monopoly game is said to be worth $2 million and was made in 1985 to commemorate Monopoly’s 50th anniversary. The dice of the game includes cut diamonds to denote numbers. The pips are diamonds – all 42 of them. The game board of 23-carat gold also boasts sapphires and rubies atop the houses and hotels.
- Fidel Castro banned Monopoly in Cuba – Prior to 1959, Monopoly had a huge following in Cuba, with local printers even creating a bootleg version called Capitolio. Castro, however, frowned upon the idea of making a game out of American capitalist ideals and ordered for all of the games to be destroyed.