5 Financial Lessons Learned From Dad While Playing Monopoly

Today’s post is a cool guest post from Jacob relating to 5 financial lessons learned over a board game. If you’re like me, you can relate to some of these experiences! Personally, I learned plenty of lessons over board games with friends (even still to do this day).
After spending six years in the accounting, retirement, and financial realm, Jacob turned his attention to teaching others about important life skills. He works with clients one on one, in addition to teaching others through his website PowerOverLife. Jacob currently lives in Gilbert, AZ with his wife and 1-year-old daughter. You can also follow him on Twitter @PowerOverLife.

5 Financial Lessons Learned From Dad While Playing Monopoly

Growing up, on Sunday afternoons, my dad would invite the family to the kitchen table to play a board game with him. Many of the older, iconic games were played including Risk, Monopoly, Stratego, the Farming Game, chess etc. Whenever we played Monopoly, my dad always took it upon himself to teach us a financial lesson or two. It wasn’t until I became an adult, college graduate, husband, and now father that I have really grown to appreciate those well thought out teaching moments from my dad.
I want to share five of those lessons that I learned from my dad while playing monopoly. I believe that these five lessons have helped me financially survive in the world today.

Lesson #1 – Diversification is the Key to Investing.

When you start playing Monopoly, you start collecting properties on the board. You can’t win monopoly by owning only one property on the board; rather, you have to diversify and branch out to other properties.
Likewise, when investing, you can’t really ever “win” by investing in one type of investment. Sure, you might have some good luck here and there, but it is always sound advice to branch out to other types of investments. Having multiple investments in your portfolio is the key to good investing for the long term.

Lesson #2 – Banks Are Never Generous.

I don’t know about you, but when I played Monopoly as a kid, my dad was always the banker…and I hated it! I think he had too much fun acting as a collector, which in reality is what the banker in the game does. The banker collects taxes, fines, loans, and interest, much to the other players’ dismay.
My dad always taught us that in real life banks are never generous. They are useful, and have a purpose; however, they truly have no mercy in the end. Sure, they might give you a pass from time to time, but they always want their money and will do everything they can to collect from you when the finally collection day comes.
My dad always recommended that we use banks as little as possible (I believe he would also add credit card companies). If you ever fall behind on a fine, loan, or interest (or credit card balance), then that company is going to come for their money.
Keep the attitude that banks are never generous in the end. Use them as little as
possible.

Lesson #3 – You Can Grow Wealth Through Work and Patience

The object of the game of Monopoly is to grow your wealth and become the richest player. The way that you do that is through the process of buying, renting, and selling properties. It takes work and patience to play the game properly… when to buy, when to sell, etc.
My dad always taught us that growing personal wealth also took work and applying the true value of patience. This specifically was a great piece of advice for me, since I am not very patient with growing my money.

Lesson #4 – Real Estate is a Good Long Term Investment

You don’t need to be a smart person to know that the player who wins Monopoly is the one who has capitalized on earning money from real estate the best.
In our financial world today, real estate can truly be a good long term investment. When you rent property, often times your renters provide a constant cash flow, paying down the mortgage and providing some extra money on top of that. You also can write off certain expenses against your taxes. In addition, when it comes time to sell that property, you will hopefully have gained some extra equity through the value of the home increasing over the years you held onto it.
My dad has three homes and does really well. I am not to the point that I can invest in real estate yet, but I most definitely will when I am able to.

Lesson #5 – If You Aren’t Careful, You Can Go Bankrupt

In the game, if you aren’t careful and you spend more than you are making, then eventually you will go bankrupt.
Everyone has a neighbor, family member, or possibly themselves that have gone bankrupt. It is not a pleasant experience. While going bankrupt in Monopoly just costs you the game, going bankrupt in life will… well let’s just say that it is a lot worse than just losing in a game!
Be careful with how much you spend. Keep some cash on hand. Learn to budget and save a little each month. Be smart with your money and don’t spend more than you make and you’ll greatly lower the chances of ever going bankrupt.

Conclusion

So parents, next time you need a family night, grab Monopoly and make it a night to remember for your kids. Teach your kids these five practical money lessons. They will thank you (probably not right away, but one day) for preparing them to face the world and helping them learn how to become financially savvy.
12 comments… add one
  • Mrs. Picky Pincher Jan 25, 2017, 8:38 am

    Lesson #6: if you aren’t careful, you can get sent to jail, too. 😉

    I was always bad at Monopoly while being super-competitive–and that makes for a very bad game of Monopoly. In fact, Mr. Picky Pincher has forbidden me from playing it with him ever again. 🙂

    But this is a very good point that Monopoly is a good way to learn about the basics of investing and money. Games in general are a fantastic way to educate yourself or your kiddos about personal finance.

    • Jacob Merkley Jan 25, 2017, 11:09 am

      Mrs. Picky Pincher – You are right…games are a great way to educate you and your kids about money topics. My little girl is only 1 right now, but I already have some games and lessons ready to go when she is a bit older. She is going to be awesome with her money! Thanks for reading!

  • Paul Jan 25, 2017, 4:43 pm

    Great (and memory-evoking) post!

    There’s a lot to learn from the granddaddy of all games, and not all of it is tied to the game itself. I’ve heard advice that you should play Monopoly with a future spouse, not to observe their Monopoly skills, but to observe their personality when faced with the sometime maddening aspects of it.

    I also think Monopoly teaches the power of forecasting / cash management, and the variability inherent in any forecast. Everyone needs to have one game where they are just about to run the gauntlet and make it back to Go and then fall short on the ol’ Luxury Tax. I’ve had glorious (but dangerously mortgaged) real estate empires founder for the lack of $5.

    Finally, how about the fact that the best strategies often involve the most chumpchange of properties? I’ll take the light blues and the railroads against anyone! Don’t think the most expensive / exotic are the best.

    • Jacob Merkley Jan 30, 2017, 8:25 am

      Thanks Paul. You are right, forecasting and cash management are definitely good lessons that can be learned as well! I also stay away from the most expensive/ exotic ones as well.

  • Full Time Finance Jan 25, 2017, 6:33 pm

    I us to love monopoly as a kid. Your right you can learn a decent amount from it. I will add a sixth point. While saving and having an emergency fund are great mitigating factors, the events that drive their usage are luck or lack thereof. I.e. A surprise medical bill or bank collects 200 dollars is out of your control, but planning so you can handle those events is not.

    • Jacob Merkley Jan 30, 2017, 8:26 am

      Ya you are right. Life is like that too. Sometimes we get hit by surprise events that are out of our control. If you are able to weather those storms, you’ll be able to push through and keep on your feet! Thanks for reading.

  • FIscovery Jan 25, 2017, 7:40 pm

    it’s such a long game!! but i agree with all, a fantastic and fun way to teach the kids about life! (the game of life rocks too, but that is such a long game ;)) – – just amazing how with a little sugar coat, they don’t even know they’re learning – it’s just family game night 🙂

  • Martin - Get FIRE'd asap Jan 25, 2017, 10:52 pm

    All I learnt from playing monopoly was that it was guaranteed to lead to a fight with my younger brother, Lol!! Oh, and that being in jail isn’t a good thing.

  • Lisa Jan 26, 2017, 2:45 pm

    All my friends hate Monopoly but I LOVE it! It’s a long game, but it is full of financial lessons!

  • Financial Coach Brad Jan 29, 2017, 1:35 pm

    Monopoly rocks! 🙂 It’s definitely a game more families should play. It introduces some great lessons at a young age.

  • Steven Goodwin @ MyFamilyOnABudget Feb 16, 2017, 8:27 am

    Love Monopoly! It’s such a great game! I have been contemplating getting out Monopoly Junior for my almost 5yo daughter and starting to teach her! I think these are some great lessons to teach/learn from the game!

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