‘If only this money was real’? Monopoly gave my boys some true life lessons

“Iwas the richest one in the game – then I lost everything. Luckily my friends gave me life support.”

My son was playing Monopoly with his friends – the life-support referred to was a friend giving him money to tide him over till he passed “Go”. He went through the highs and lows of what life could hold in store – condensed into an afternoon. His best friend went on to make the next fortune, lose it all, and then come back with new wealth by mortgaging all his properties, continuing to take rent, and going on to buy his property back and then some. Lucky him.

Life doesn’t always turn out that way. Especially as they didn’t bother with charging interest on the mortgages taken out ... make sure they understand there’s no such thing as free money.

However, implementing winning strategies learnt from Monopoly means we will do better than the next person. I’m always taken aback by my son’s declaration that a certain property isn’t worth buying when I land on specific ones.

Value gain vs price paid, or return on risk, is a key foundation for winning. I wish I had played more Monopoly as a child – would have saved me a heap.

The boys have worked out what to buy and what to skip – based on rental yield. They don’t know it’s called that, but they do know the it’s “not worth paying X because look at the rent, it’s too low”. Great insight for 11-year-olds.

But life isn’t as simple as a board game – is it?

Well, the more you play Monopoly, the more you realise how true to life so many of its lessons are.

What the boys have cottoned on to tells us that the most expensive assets aren’t always the best to own. Let’s distill other nuggets of wisdom gleaned from this game:

Cash is key. Cash available means you can buy things that you land on. No cash, no buy.

Cash flow is crucial to success. It’s no good owning many things but not being able to pay the cost of maintaining or servicing them.

Have a plan and stick to your strategy. A recommended approach is to spread yourself across the board – owning one or two things and loading them with hotels means you have less chance of benefiting as there’s little chance of people landing on them.

A better approach is to own a few properties spread across the board. Think stocks and shares in your life – don’t sink a lot of money into one particular asset, spread your risk. But not so much that it’s a nightmare managing what you own.

Focus on the yield. Well-known landmarks might feel good to own, but they don’t give you the best bang for your buck.

My son learnt that “there’s no point having money if you don’t own property”. He was getting rich because he was collecting from “Go” (your bonus perhaps?) and selling properties he landed on for more than their face value; a more astute counterpart was offering him $100-plus more than the cost of the location if he sold it then and there. My son’s cash mountain built up quickly. Money he went on to lose by paying the full whack upon landing on his friends’ properties. He was soon broke.

He also learnt that his friend’s approach is hugely risky. This is the friend who was offering instant gain for selling things on straight away. The friend was property rich, but cash poor and didn’t have enough to pay rent. He also went bankrupt.

But perhaps the most valuable lesson learnt is to take in what’s happening, figure out how and why, and have a strategy to deal with things differently in future. I know they did this because of their chat during and after the game.

To win at Monopoly, you have to be the last player left. In other words, the last player with money. If you sit on cash throughout, you’ll be left with none pretty quickly as your outgoings increase, with only what you collect when you pass “Go”.

If you aimlessly buy everything in sight, you’re likely to run out of cash paying off financial obligations.

One thing you can do is mortgage possessions at a discounted rate. Coupled with interest payments, that means it’s only a matter of time before you become bankrupt. Yes it’s only a game, but there are definite echoes of real life and the foundations of good financial principles.

One thing I learnt is that the boys have a fantastic friendship, they look out for each other, and want success for all.

Long may their relationship, and its values, last.