Monopoly board game is a business type of board game that holds a lot of lessons for the players.
Just like other board games, it can be the best way to relieve stress as well as entertain ourselves but there is more to it.
Board games generally help players improve brain function.
It also brings people closer, strengthens relationships, and can help you meet new people.
A board game like monopoly helps us in so many ways without us even realizing it.
Playing Monopoly as a specific teaches you to set financial goals and to be patient as the investments mature.
One can also learn negotiation skills and other money lessons that I will discuss in this article.
Business Lessons from Monopoly Board Game
1. Always Keep Cash on Hand
Whether you are a first time player or an expert, the most important takeaway from Monopoly is to always have cash on hand.
Applying this to business and finance, this is a crucial lesson.
To win a monopoly game, you have to be the last player to have money.
As a rule, be careful when buying assets, don’t aim to buy everything in sight.
If you run out of cash, it would mean that you have to start selling off your properties at a meagre price and risk bankruptcy.
This applies in the stock market for example.
When credit markets seize, many investors scramble to raise cash.
The only option would be to sell securities at any price and the need for cash would spike selling.
A huge market decline would now cause people losing a significant amount of their investable assets.
On the other hand, the people who have cash would have the opportunity to buy assets –stocks, real estate, bonds and they win the game and make the most money.
2. Don’t Hoard cash
While you take heed to the first rule, don’t hoard cash.
When you play Monopoly, everyone starts with $1,500.
Plus, you get $200 every time you pass “Go.”
As long as you don’t go to jail, you could keep quietly collecting money and never spend it.
However, saving all your cash isn’t the road to victory.
You need to think long-term.
This is because long term investments are more beneficial in the long run.
Bringing it home to reality, holding on to too much cash means you miss out on the returns you’d get from investing.
Savings account are not the best because even the high yield ones, only give 1% return.
This percentage return is too small to keep your cash from losing value in the event of inflation.
So, it’s important to invest cash into assets that produce cash flow or appreciate as time goes by.
3. Diversify your portfolio
This third business lesson from monopoly is similar to the age-old adage of not putting all your eggs in one basket.
Buying up multiple spaces around the 40 spaces on the board will increase your chances of making money.
This is because you get to earn when another player lands on your square.
Usually, the winner is not just someone who spreads out his or her properties throughout the board but also one who has multiple chances at capturing rents.
The same principle applies to when investing in stocks and bonds.
If you bet everything on one or two stocks, you are exposing yourself to a potential wipe-out if something goes wrong.
4. Learn the art of Negotiation
The importance of negotiation in business cannot be overestimated.
Monopoly is a good place to flex your negotiation muscles.
There are times in the game when a trade is necessary to get ahead.
However, you may run up against an owner of the property you want who is benefiting from it and doesn’t want to part with it.
Your task then becomes convincing the owner that what you have to offer in return will somehow be more beneficial.
Seeing both sides and manoeuvring around another party’s wants and demands are all skills that come into play in many business settings.
5. Be patient.
Ask yourself what the long game is.
In the beginning, it seems exciting but it’s harder to stay the course when challenges occur.
You have to be patient and learn when to buy and when to take a pass.
Similarly, if you just buy without discipline when investing, you will be placing your outcome on the hope that the market behaves nicely. Successful investors don’t invest based on hope, they invest with a disciplined approach. Patience is a very integral part of that approach.
6. The Most Expensive Asset Is Not Always the Best
Most monopoly players want to own Park Place and Boardwalk since they have the biggest payouts. They forget that these places are also the most expensive pieces to maintain.
Many people lose at Monopoly by owning the most expensive pieces because they don’t pay attention to cost, only cash flow.
The four railroads are arguably the best places to own.
This is because if you can own all four of them, you have put yourself in a very good position.
With each railroad costing $200, by owning all four you collect $200 in rent or a 25% return.
The trick is to focus on the cash flow and take into account the cost paid to attain those cash flows.
7. Instant gratification is not always the best.
In life, the fastest decisions aren’t always the wisest ones.
It’s exciting to make progress early in the game, but don’t make bad choices just because you want to feel like a winner.
In Monopoly and business in general, the true winner is the one whose overall decision-making leads to the best outcome.
Those who base their choices on taking advantage of others just for the sake of it – and for the sake of the business overall – will fail.
Of course, a board game like Monopoly shouldn’t be taken as a thorough education in business and investing, because it has its flaws.
However, it does have some valuable lessons to teach: spread yourself out across the board intelligently, keep cash on hand, focus on cash flows, be patient, and pay attention to the price.
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