Can the tactics of Monopoly game-playing champions teach everyone how to make money in the real world?
Champion and tournament judge Philip Orbanes thinks so, and he says there are vital lessons to be learned for potential investors to create real wealth for themselves.
Philip says that he and other Monopoly world champions have picked up tricks to win tournaments but they are also useful as tactics in the building personal wealth.
“Essentially, what works in Monopoly can provide the experience needed to ground decision making,” he explained.
“Most people don’t get to study finances while at school so we have to learn, which means that we will make financial mistakes, especially when it comes to investing.”
Like real-life investing
Philip, who has worked as a senior executive at Monopoly makers Parker Brothers, says the biggest lesson learned from playing the game is diversifying assets.
He points out that players begin the game with cash and no other assets but they will not win Monopoly with cash alone.
“It’s just the same in real life – if you have money sitting in a bank at a low rate of interest, you really aren’t going to make much money,” he said.
Philip says that the game mirrors real life in that investors have to invest in assets such as real estate, bonds and stocks in order to build real wealth.
He adds: “Again, as in real life, investors need to take a balanced approach and work over the longer term because by placing everything into the latest or hottest investment you stand to lose everything.”
Monopoly investment tip
Philip, who has just published a book Monopoly, Money and You, says the game also illustrates some of the investment fallacies people believe.
He says most players want to buy Mayfair and Park Lane, the two dark blue properties, believing they are the best to own because they are expensive and prestigious.
However, just like investments an investor has to consider location, return on investment and value for money.
Philip also says that Monopoly helps sharpen negotiating skills since at some stage in the game players have to win deals to get the properties they want which means that relationships are important.
Good negotiation, he says, involves understanding the needs of the other person and not necessarily exploiting a situation to your own advantage.
According to Philip, the best properties to own when playing Monopoly are the orange properties as they lie at an ideal distance from jail and because players go to jail frequently they are more likely to land on them.