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BizDay Zimbabwe

Lessons from the Monopoly game

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Monopoly is one of the most educational board games because it teaches some lessons about money. There are a few lessons I recorded the last time I played a game.

1.    Assets are more important than cash.
When we were young we used to play the game. Before we understood the game we used to auction the most expensive properties because it felt better to have cash in hand. Soon, however, the money usually ran out as we paid rent in the same properties we chose not to buy.
In business it is important to have cash but it is better to have assets that bring in money all the time. Work hard to develop an asset base that keeps growing if you wish to be financially independent. It may be expensive to buy the assets but in the long run they pay you back big time.
2.    No matter how many assets you have, if they are scattered they do not pay much
The aim of the game is that you get a monopoly by buying all the properties on the same street and get the right to develop the place buying houses and hotels. Other players pay more for the priviledge of staying in a hotel. If you have properties all over the board but without a monopoly you will not make as much money as someone with nothing but a monopoly in the cheapest street.
You cannot make money in business if you have not created a name that people will think of first when they need a service. You may not have a monopoly in business but there is room to be a monopoly as far as certain businesses are concerned, who need your products and services.

3.    It is better to develop one set of assets and use the profits to develop others
If you have three or four monopolies on the board, the temptation is to develop all of them at the same time. This means other players who rent your properties will pay only a little amount because of the small developments there. If you develop one place first, the returns are high and there is soon enough to develop other places effectively.
Spreading yourself too thinly in business will not bring great profits. Develop one area and then expand to other areas as the profits from the first come in.
In conclusion, in business it is better to develop assets in few areas and develop them effectively so that you become a monopoly in the limited sense that it applies. Work in that one area and only expand when the profits in the main area allow.

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