The timeless board game Monopoly can teach players much about managing money in the real world. Its emphasis on debt management, diversification and strategic property acquisition offers valuable insights into the fundamental principles of personal finance.
The insights gleaned from Monopoly enhance individuals’ willingness to execute prudent financial judgements in their subsequent endeavours. Here’s how the game of Monopoly can help college graduates.
Understand the Market
Successful Monopoly players acquire properties not randomly but after conducting a thorough board analysis to determine the most desirable and often landed on. This principle is also applicable to investing in the real world.
Investing solely in the most expensive or widely recognised assets without determining their true value is not advisable. Instead, you should identify and acquire undervalued properties that have potential for growth after conducting market research. When the properties appreciate, you can place your property on the market or rely on house-buying platforms to sell your flat or property. The platform can purchase your property at a time that suits you, regardless of whether you have completed the External Wall System (EWS1) survey. However, it takes into account the forecasted costs of cladding removal and the risks associated with buying the apartment.
Diversify Your Funds
The significance of investing in a variety of stocks is one of the most important financial lessons that Monopoly offers. Successful participants in the game are not solely concerned with purchasing the most costly properties, including Park Lane and Mayfair. Conversely, they allocated their investments in a diversified manner.
This guarantees that they possess a variety of costly and valuable properties. This approach is directly applicable to investing in the real world. By diversifying your investments, you can produce a more stable financial portfolio with lower risk. Furthermore, the lesson of being conservative can be applied to real-world investing.
Develop Skills in Negotiation
The final crucial piece of advice Monopoly teaches college graduates is the significance of negotiation skills. Players are perpetually exchanging properties, negotiating with one another, and reaching agreements to gain an advantage in the game. Similar abilities are essential in the practical realm of personal finance.
Practical negotiation skills can help you achieve better results when arranging the terms of a loan, trying to get a better rate on a car purchase, or discussing a salary. Players with superior negotiation skills typically emerge victorious in Monopoly.
Save Money for Emergencies
A valuable financial lesson college graduates can learn from Monopoly is the need for cash at hand. Failure to maintain sufficient funds in the game will result in the sale of properties at a loss or bankruptcy. The same can occur in the absence of an emergency fund.
Setting aside emergency funds for unforeseen expenses, such as car repairs or medical expenditures, can help you avoid liquidating your investments or incurring debt. This will assist you in preserving your financial stability and preventing a cash crisis similar to the one depicted in Monopoly, which could result in bankruptcy.
Finance Lessons to Learn
Learning the rules of Monopoly and other financial games will help you immensely as you start your financial path. If you spread your finances, learn about the economic market, save for situations and improve your negotiation skills, you can make better financial choices and become financially stable in the long run.
