The first time you ever held a $100 bill in your hands, you were probably playing Monopoly.
The legendary Parker Brothers game has long been an introduction to high finance for kids around the world. In these days of social distance, there’s a good chance you’ve pulled the box out of the closet for some screen-free family time. And as the game drags into its fourth hour, you may ask yourself: What are the lessons from Monopoly, really? What exactly is this game teaching my children? And is it correct?
Here’s a breakdown of three key lessons from Monopoly:
1️⃣ Always keep cash on hand. Investopedia explains: “If you aimlessly move around the Monopoly board buying up everything in sight, when the time comes to pay your financial obligations, you are likely to run out of cash.” This aligns nicely with our basic rules of personal finance.
2️⃣ But not too much: You need to invest to win. As Gordon Pape recalls, “in the middle of our Monopoly game my grandson became excited by the fact he had more cash in his account than any of the other players. We paused for a few minutes while his mother explained that was because he had not invested in any houses for his properties.”
3️⃣ Think long term. There’s a reason they invented the Speed Die — the regular version of the game can go on for hours as you wait for everyone else to go bankrupt. (Note that ACTUAL wealth building isn’t a zero sum game, and this is a bad message to send. Is the guy with the monocle even getting the complaints we leave in Community Chest??) But there’s a bright side to that tedium: It’s just like saving for the long term. The winner is the player who can plan ahead. (Or, 90% of the time it’s the player with the scottie dog).
There are, of course, more lessons from Monopoly. Generate passive income, own utilities, learn to negotiate. But start with these three and pass go.