Want to Learn About Personal Finance? Play Monopoly

According to dictionary.com, the term “monopoly” is defined as “exclusive control of a commodity or service in a particular market or a control that makes possible the manipulation of prices.”

monopoly

Image via http://www.flickr.com/photos/flem007_uk on Flickr

I highly doubt I knew what that meant when I was playing the popular board game with the same title. Monopoly was my least favourite board game growing up, yet we had a copy in the house, so I did play it several times. I must have gotten it as a Christmas or birthday gift, but I don’t ever remember asking for it.  To be honest, I considered it a “bored” game vs. a board game. I think what I hated about it the most was that it could potentially take hours for the game to end, since you had to become bankrupt to be eliminated from the game.

How ironic is it that the board game I hated the most, is actually the epitome of personal finance board games, if there ever was a category.

Money in Monopoly

Think about it.

  • One player is designated as a banker and doles out the money to each of the players
  • You get a “salary” of $200 every time you pass GO
  • You pay income tax
  • You have the opportunity to buy a property once you land on it
  • You can place a bid on the property if the person who lands on it doesn’t want to purchase it
  • Of course everyone wants to own the Boardwalk because it’s the most expensive property on the board
  • You have the option to buy houses and hotels on your property to increase your earnings.  Ideally you would want to buy all the properties of a colour group so that the rent is doubled on all unimproved lots of that particular colour group (hence, it becomes a monopoly).

I was just a kid playing a game, so I never really had much of a strategy. Most of the time, I just bought whatever property I landed on and hoped for the best.  I think the idea of collecting $200 every time I passed GO was more appealing.

Just like in real life, you need to take some risk in Monopoly to reap the rewards. This isn’t a game about playing it safe.

How Monopoly Relates to Personal Finance

In my opinion, Monopoly is the ONE game that sheds light on several aspects of personal finance. It makes you think about money. How to manage your money.  How to build wealth. Risk tolerance.  Knowing when to take a risk.  Buying, owning and investing in real estate. It is a game that can be used as a tool to teach kids and adults about how important it is to manage your money and grow your wealth.

The Irony

Ironically enough, the board game’s designer, Charles Darrow, invented* the game during a time when personal wealth was at an all-time low: The Great Depression.  He was an unemployed salesman trying to support his family through odd jobs. At his own leisure, he would draw up the streets of Atlantic City on his kitchen table-cloth with the idea that a game could come out of it. It eventually became a favourite pastime amongst friends and family to buy, rent, and sell real estate.  During a time when money was very tight, playing Monopoly was a chance to escape the harsh reality of the Great Depression.

Parker Brothers had initially turned down Darrow when he tried to sell the idea to the game manufacturer.  Darrow manufactured the game on his own and filled orders for department stores such as F.A.O. Schwarz. It was only when a customer mentioned the game to a friend, a friend whose husband happened to be president of Parker Brothers at the time, that Parker Brothers finally became interested. [1]

The company bought the game and promised Darrow royalties on the sales of the game.  The royalties from Monopoly turned Charles Darrow into a millionaire, the first game inventor to ever make that much money.[1]

*Note:  There is additional information about how Charles Darrow’s version of Monopoly is strikingly similar to a game invented thirty years earlier called The Landlord’s Game by a woman named Lizzie J. Magie.  The full story can be found in the footnote reference.

 

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32 thoughts on “Want to Learn About Personal Finance? Play Monopoly

    • There’s just something about taking 4 hours to play a board game that turns me off of it. Unless it was some kind of board game marathon…but still. 🙂

  1. Like you, I never really liked playing Monopoly for the same reasons; it took too long and I really didn’t have a plan of action. But it’s definitely fitting for personal finance – you have to have a strategy and not just play it safe. Interesting footnote about The Landlord Game. I’ll have to check that out.

  2. I loved Monopoly as a kid but you’re right, I definitely didn’t have any strategy at the time and probably didn’t learn much about risks and personal finance. I did think it was a good way for a young child to learn math by counting money. I hated it when they came out with an automated version where you didn’t have to do that. I do have to agree with Kali and Little House that the game took a loooong time!

    • I remember seeing a kids’ version of Monopoly in the toy stores. Parents should look into buying that game for their children to teach them about counting money and managing it.

    • There’s actually books out there that give you tips and tricks on how to play the game, but since I don’t really like the game, I’m not going to bother getting those books. 😛

  3. I loved Monopoly when I was a kid. I even went so far as to save my real money to buy a book that was all about how to win at Monopoly. Rarely did I lose 🙂 If nothing else, the game taught me to get interested in money, and in particular how one could invest to make money.

  4. I always liked Monopoly, but the frustrating part for me was always the period between when you realized that you were essentially screwed and the time when you actually went bankrupt. But, you’re right, it can be a good tool for some personal finance basics.

  5. Monopoly got a lot more interesting for me when I played with people who really got creative with trades. People would trade away an orange to give someone a monopoly but only if they got a free pass. I’ve seen another request a 40/60 split of all future revenue (giving them a 40% discount but also a share of the rewards from other players).

    • It would definitely make the game more interesting if people knew what they were doing and had more of a strategy.You could probably come up with some potential real life situations.

  6. I ma a huge fan of Monopoly and played it extensively (for hours) with my friends when I was a kid. I played a lot of board and card games too. I think it helped me hone my strategy, soft and PF skills.

  7. I LOVED playing Monopoly as a kid but I don’t think I ever actually finished playing a game. Usually someone (or myself) would quit in anger when things started looking real grim. It is a great game to teach some pf skills though. I probably learned how to handle and manage money from playing the game without ever realizing it!

    • I’m surprised that in this day and age, with all the books, tv shows and blogs about personal finance, Monopoly isn’t promoted more as a personal finance game. People who have trouble saving and managing money should really look into playing this game. If they have the patience. 😉

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