Monopoly teaches us valuable life lessons
THE board game that has for generations caused rifts between family members also provides lessons about managing our personal finances.
Since 1935, Monopoly has given players the chance to become a real estate tycoon, while offering financial wisdom that can be applied to the world of money and investing.
MLC financial adviser Matt Neill believes Monopoly can teach us the importance of budgeting. He said players who did not maintain enough cash for expenses, such as rent, might be forced to sell or mortgage their properties at a loss, in order to raise money.
“This should be a lesson to all regarding their financial affairs,” Mr Neill said.
He recommended building an emergency fund that covered three to six months’ worth of living expenses.
That way, you will be financially set for any unexpected medical bills or home repairs.
On the other hand, to win the game you can’t stay completely safe by holding cash. It will need to be invested and that means taking a risk, buying and developing properties. Just make sure, when investing in growth assets, to be prepared for any short-term ups and downs for a potential long-term win, Mr Neill said.
“If in doubt, consult a specialist adviser and get personalised financial advice,” he said.
Buying properties in Monopoly earns you money if someone lands on your square, so it’s a good idea to buy up multiple spaces around the board. The same goes when choosing shares.
Mr Neill said diversifying your holdings was key to every great investment plan.
Index funds, also known as exchangetraded funds or ETFs, are an example.
“These provide a cheap entry into a diversified portfolio and contain a variety of stocks and bonds,” Mr Neill said.
At some point in a Monopoly game you’ll probably start negotiating with your opponents to trade properties or borrow money.
Scotwork negotiation consultant Jared Bamford said this could help people hone their negotiation skills. “Whether it’s buying a property, asking for a pay rise or selling your car, consider what’s important to the other party,” he said. “Then ask for what you want in exchange for giving the other party what is important to them. It’s a win-win outcome.”
Event manager Jackie Newton said Monopoly was a good money conversation starter with her son Harley, 7, and his friends.
“It teaches basic principles around managing your finances and being aware of overheads like taxes and rent,” she said.
Ms Newton said other lessons included the importance of property ownership and how to use money wisely “rather than spending without a strategy and going bankrupt”.
“It is also a great game to encourage kids to win, to avoid jail and that you can still win cash coming second in a beauty contest!” she said.