Monopoly, Money, and You: How to Profit from the Game’s Secrets of Success

By Philip E. Orbanes

THE GAME-CHANGING GUIDE TO SMARTER FINANCIAL DECISIONS

Through vividly illustrated game play, Monopoly, Money, and You shows you how to manage real-life financial challenges using lessons from the iconic board game. You'll improve the critical skills it takes to succeed fi nancially, including:

CASH MANAGEMENT * DIVERSIFICATION * NEGOTIATING * DEAL-MAKING * ANALYZING OPPORTUNITIES * CREATING A BUDGET * REDUCING DEBT * MAKING THE BEST OF LIMITED CHOICES * KEEPING YOUR COOL IN TOUGH TIMES

"[Orbanes] reveals tips and life lessons that are useful to everyone, from high schoolers getting their first credit cards to Wall Street traders looking for an edge in their next negotiation." -- KEVIN TOSTADO, producer and director of Under the Boardwalk: The Monopoly Story

"Monopoly became a part of my life the moment my father, Robert Barton--then president of Parker Brothers--acquired the game in 1935. Now, all these years later, Philip Orbanes reveals what we've all sensed since then--the game is replete with solid financial lessons." -- RANDOLPH P. BARTON, former president of Parker Brothers

"As Philip Orbanes says, Monopoly teaches you two N's: numbers and negotiation. Numbers are vital to financial success, be it in your business, career, or personal life. And negotiation is really the acquired skill of selling effectively, a skill you rely on daily." -- BOB REISS, founder of 16 start-ups and author of Low Risk, High Reward

• Language: English
• Publisher: McGraw-Hill Education
• Release date: Mar 29, 2013
• ISBN: 9780071808446

Book preview

Copyright © 2013 by Philip E. Orbanes. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

ISBN: 978-0-07-180844-6

MHID:       0-07-180844-2

The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-180843-9, MHID: 0-07-180843-4.

All trademarks are trademarks of their respective owners. Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark. Where such designations appear in this book, they have been printed with initial caps.

McGraw-Hill Education eBooks are available at special quantity discounts to use as premiums and sales promotions, or for use in corporate training programs. To contact a representative please e-mail us at [e-mail].

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, securities trading, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.

—From a Declaration of Principles Jointly Adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations

MONOPOLY® and © 2013 Hasbro, Inc. Used with permission

The MONOPOLY® name and logos, and the distinctive design of the game board, the four corner spaces, and the playing pieces, the MONOPOLY name and character, and each of the distinctive elements of the board and the playing pieces, are trademarks of Hasbro for its property trading game and equipment. Used with permission.

TERMS OF USE

This is a copyrighted work and McGraw-Hill Education and its licensors reserve all rights in and to the work. Use of this work is subject to these terms. Except as permitted under the Copyright Act of 1976 and the right to store and retrieve one copy of the work, you may not decompile, disassemble, reverse engineer, reproduce, modify, create derivative works based upon, transmit, distribute, disseminate, sell, publish or sublicense the work or any part of it without McGraw-Hill Education’s prior consent. You may use the work for your own noncommercial and personal use; any other use of the work is strictly prohibited. Your right to use the work may be terminated if you fail to comply with these terms.

THE WORK IS PROVIDED AS IS. McGRAW-HILL EDUCATION AND ITS LICENSORS MAKE NO GUARANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR COMPLETENESS OF OR RESULTS TO BE OBTAINED FROM USING THE WORK, INCLUDING ANY INFORMATION THAT CAN BE ACCESSED THROUGH THE WORK VIA HYPERLINK OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. McGraw-Hill Education and its licensors do not warrant or guarantee that the functions contained in the work will meet your requirements or that its operation will be uninterrupted or error free. Neither McGraw-Hill Education nor its licensors shall be liable to you or anyone else for any inaccuracy, error or omission, regardless of cause, in the work or for any damages resulting therefrom. McGraw-Hill Education has no responsibility for the content of any information accessed through the work. Under no circumstances shall McGraw-Hill Education and/or its licensors be liable for any indirect, incidental, special, punitive, consequential or similar damages that result from the use of or inability to use the work, even if any of them has been advised of the possibility of such damages. This limitation of liability shall apply to any claim or cause whatsoever whether such claim or cause arises in contract, tort or otherwise.

---

To obtain PDFs for exercises from the printed version of this eBook, please click here.

---

I dedicate this book to Leo and Kyle . . .

and all of their generation who apply its lessons.

CONTENTS

ACKNOWLEDGMENTS

GETTING READY TO PLAY THE GAME

RETURN TO MARVEN GARDENS

THE GAME’S LESSONS AND REAL LIFE

1 MONOPOLY MAKES YOU THINK

...ABOUT MONEY

2 THE BOARD

AND WHERE YOU STAND

KNOWING YOUR PLAYING FIELD AND

WHAT LIES AHEAD

3 THE RULES

WHY IT IS ESSENTIAL TO LEARN THEM

EMBRACING THE GAME’S RULES, AND THE

RULES AND PRINCIPLES IN LIFE AS WELL

SETTING YOUR GOALS

4 GAME ONE

FRIDAY NIGHT MONOPOLY

LEARNING AND APPLYING THE BASICS

DIVERSIFICATION AND CASH MANAGEMENT

5 THE TOKENS

WHO ARE YOU ANYWAY?

FINDING OUT WHO YOU ARE

CONFIDENCE, EXPRESSIVENESS,

SELF-CONTROL, AFFABILITY

6 THE DICE

ROLL WITH THEM

LUCK . . . AND WHY IT’S NOT ALL RANDOM

THE SPEED DIE

7 THE DEEDS

CONVERTING CASH WITH THE AIM OF GROWTH

8 THE BUILDINGS

UPPING YOUR RETURN

MAJOR COMMITMENTS

STEPPING UP CASH CONVERSION

9 GAME TWO

2009 UNITED STATES CHAMPIONSHIP

OVERDIVERSIFICATION AND FREQUENCY

10 THE CARDS

EXPECTING THE EXPECTED

11 THE PLAYERS

WHO ARE YOU UP AGAINST?

GAME THEORY/GAMIFICATION

ASSERTIVENESS, RESTRAINT, THE ART OF THE TRADE,

AND NEGOTIATING STYLES

12 THE CLOCK

YOUR GAME PLAN

THE TIMING OF OPPORTUNITY

13 GAME THREE

2009 WORLD CHAMPIONSHIP

COMPLACENCY

EFFECTIVE NEGOTIATION

14 FUN

REWARD YOURSELF FOR ACCOMPLISHMENT

HOUSE RULES, MONOPOLY MEGA, THE MONOPOLY

BRAND, DOCUMENTARY

APPENDIX A

OFFICIAL MONOPOLY RULES

APPENDIX B

SECRETS OF SUCCESS SUMMARY

BIBLIOGRAPHY

INDEX

It’s not so important who starts the game but who finishes it.

—JOHN WOODEN, COACH

ACKNOWLEDGMENTS

The following people enhanced the content of this manuscript: Kevin Tostado, producer of Under the Boardwalk: The Monopoly® Story, meticulously documented and recorded the 2009 championship games depicted in this book. Kevin’s thoughtful assistance, along with that of coproducer Craig Bentley, is greatly appreciated.

Tim Vandenberg, outstanding teacher in the Hesperia Unified School District of California, kindly provided and gave permission to reprint his Monopoly Speed Die Probabilities chart. Tim’s use of Monopoly to teach math in his classroom is becoming the stuff of legend. His success demonstrates the effectiveness of the game as a storehouse of real-life lessons.

Matt McNally, former Monopoly champ and founder of an impressive Monopoly players’ association, was a valued source of insight and comment throughout. He is featured among the nine Game Changers found throughout this book and also contributed the winning strategy for Monopoly: The Mega Edition.

Sincere thanks to Joe Sequino for his help with the online surveys and charts.

A tip of the Top Hat to the Game Changers: Jason Bunn, Jerry Dausman, Jim Forbes, Will Lusby, Yutaka Okada, Gary Peters, Dana Terman, Leon Vandendooren, and Matt McNally, all former Monopoly champs, who graciously offered their recollections and advice for you, my reader.

My sincere appreciation to Jonathan Berkowitz, Kim Losey, Nicole Agnello, Cameron Nixon, Jane Ritson-Parsons, and Margie Chan-Yip of Hasbro; my literary agent, Rob McQuilkin; and especially my visionary editor, Casey Ebro, of McGraw-Hill Professional, along with the McGraw-Hill team, Mary Glenn, Stacey Ashton, Courtney Fischer, Ann Pryor, Ty Nowicki, Peter McCurdy, Maureen Harper, and Jane Palmieri.

GETTING READY TO PLAY THE GAME

Once again, I find myself in the charming community of Marven Gardens, standing before his door. I was last here many years ago when I wrote The Monopoly® Companion. Memories swirl. I tap on the shiny brass ring of the handsome oak portal.

It opens and there he stands. Mr. Monopoly. I rub my eyes in disbelief; he doesn’t look a day older, despite the passage of 25 years. It’s been said that a virtuous life remains long protected by fortune’s power. A virtual life is even better, it seems. He offers me his hand.

You’re back! What took you so long? Come in, come in. This way. Hang up your coat; we’ll sit. Can’t wait to talk money. His voice is warm and as commanding as ever.

I take a posh seat and admire his expansive den, its rich wood panels accented by framed awards and glass cases filled with objets d’art: large gold-plated irons and shoes, battleships and racecars. The carpet is embossed with locomotive icons woven out of golden threads. And—just for my satisfaction, perhaps—the wall safe is open, so I can’t help but notice how filled it is with colorful Monopoly money. In his realm, Mr. Monopoly clearly wields a Midas touch.

You might suppose that Mr. Monopoly’s money is as trivial as the sayings that play on it, like Don’t worry, it’s only Monopoly money, or You’re spending cash like it’s just Monopoly money. But the principles of making money in his classic game are remarkably applicable to making real dollars. This is the reason why I’ve returned to Marven Gardens: to bring to light the financial lessons so easily absorbed while playing the game and their parallels in the world you and I contend with. The one that is often harsh, confusing, and not always virtuous. Who can’t use a bit of help?

If you learn to play my game to win, Mr. Monopoly offers, as his pleasant wife, Madge, enters with a tray bearing a pitcher of tea and tall, ice-filled, Monopoly-decorated glasses, you’ll see how making smart financial decisions improves the odds that you will prosper and not lose your shirt. This applies in business as well as to your own hard-earned money.

I concur. One thing I know from long experience in judging Monopoly championships is that for most of us this legendary game provides the seminal opportunity to handle money and practice the art of negotiation. Much like the basic knowledge Robert Fulghum conveyed in All I Really Need to Know I Learned in Kindergarten, Monopoly’s lessons lay the groundwork for sound financial judgment—provided we pay attention to them.

I realize too, after many years in business, that I owe a good measure of my own success to the knack I developed, early in my career, to game each problem and opportunity that came my way. Playing Monopoly sparked this instinct. It has compelled me to challenge my business teammates to figure out the range of rewards and potential penalties before making any key financial decision. It has schooled me in the need to set goals, expect setbacks, and recognize trends before they become obvious.

And so, after a rousing discussion that lasted until the wee hours of the morning, I came away with Mr. Monopoly’s maxims to link to my own experiences. As we said goodbye, he left me with this remark:

1

MONOPOLY MAKES YOU THINK

…ABOUT MONEY

Why don’t we show our money the same care and attention

as we shower on every other important relationship in our lives?

—SUZE ORMAN, FINANCIAL ADVISOR

It goes without saying that it takes commitment if you want to become good at anything. That means a lot of practice, trial and error . . . and education. Yes, it takes all three; there are no shortcuts, especially when money is involved. I’ve seen many a brilliant academic mind, hired at a high level into a firm, really muck up its business. I’ve seen laborers build a good life by virtue of their own hands, but never figure out how much more they could make if they trained others to do the hard work for them. I’ve seen doctors and lawyers build flourishing practices, earn upwards of $750,000 a year, and fall deeper and deeper into debt.

Why do these mistakes occur? I think it’s because most of us receive very little—or no—practical training in financial management. (It’s been said that there is no difference between theory and practice . . . until practice.) We try to learn as we go and often endure the consequences of mistakes: budgets out of whack, an inability to see the merits of doing without now in order to reap a reward later, not understanding the difference between saving and investing. Worse yet, we become vulnerable, prone to listen to silver-tongued individuals intent on separating us from our money through the lure of a sure thing. By the time we recover from basic avoidable mistakes, we’re in the hole and need to devote more of our financial resources just to get back to breaking even. I’ve been there.

Imagine being challenged to operate a giant construction crane, having only read the owner’s manual before being thrust into the operator’s seat. (Okay, maybe your uncle, a retired forklift operator, gave you a few vague pointers.) Suddenly, the controls are in your hands and you’re on your own. Do you think your first lift would go smoothly? Or are you more likely to drop the load?

That’s what handling money is like for many of us after we come out of school, start earning a respectable salary, and find that the controls are now in our grip. Sure, we might instinctively apply (or avoid) our parents’ financial habits. More instinctively, we want everything today (solution: credit cards). We fall into debt. Time marches on, and hopefully we recover from our early mistakes (pay off those cards) and gain some wisdom to protect our money. We come upon good advice along the way and apply it if we wise up. If we don’t, we remain stuck in a rut with no savings for the bulk of our working lives and must place our trust in government largesse, especially after we’re retired. But if you read the news, you know a crisis is coming because the weight of promised government entitlements is unbearable. (It already dwarfs the alarmingly large national debt.)

More than ever, worry about money dominates our lives, and the message is clear: you need to acquire it through your own hard work, save as much as you can, and constantly nurture and grow a nest egg to win the game.

What about that good financial advice I mentioned? The problem for most us (me included when I was starting out) is that we can’t feel this advice. It’s as abstract and academic as Avogadro’s number. (If you had high school chemistry, you might remember this term, but who remembers the number of molecules it signifies?) In order to make good financial decisions, you need the benefit of experience to drill home the basic lessons. This comes at a price—literally. Fortunately, there is a playing field’s worth of experience at your disposal that enables you to feel the impact of both good and bad financial decisions, joyously, without penalty.

Yes, it’s the classic version of Monopoly. Monopoly puts you through a financial wringer without real-world loss. Once you get the hang of how to win it, you’ll feel the game’s secrets of success and see how they apply to real life—sometimes verbatim, always in principle.

Since Monopoly is a money game, it is denominated. Filled with numbers. Every component of this amazing game is built of bricks related by addition, subtraction, and sometimes multiplication and division. These simple operations can, if you’re a true enthusiast, lead to a study of the kind of probabilities, tables of statistics, and future value analysis that would make any Wall Street financial guru salivate. In fact, this parallel demonstrates the great value of Monopoly in honing your real-world investment skills. You need to do numerical analysis to understand the impact of key financial decisions in your personal life or business. It can be fun to do this. (Gamification will be discussed in Chapter 10.) Many successful people I know view money like points in a game. The more points earned, the more they feel they’re succeeding. Money is a scorecard of sorts. Increasingly, it’s becoming a virtual scorecard because we actually don’t see or touch our money. It exists in accounts, represented by digits (points, as my friend would say). We access it on our mobile devices, making it easier than ever to count our money and know our score.

You may not have a degree in finance or have ever thought of becoming an investment banker on Wall Street, but that doesn’t mean you don’t have the smarts to make a good investment. By playing Monopoly, you pick up the basics the pros paid a handsome sum to learn in advanced schools: rate of return, payoff odds, likelihood of a big return, cash management, diversification (not to mention the art of negotiation).

These skills apply equally well to your everyday financial decisions. Here’s a chart that demonstrates five such disciplines:

Here’s the big idea. To make money, you have to steadily think about and apply yourself to making money. Amassing play money to win at Monopoly requires a high level of attention (one dumb move might bankrupt you). By developing a winning discipline in the game, you’ll be inspired to diligently protect and grow your real cash. Devotion to your money should be akin to regard for a valued family member, for whom you want only the best, an absence of threat, and success beyond measure. You wouldn’t treat such a loved one with neglect or casual disregard. Hold money in the same light. Think about this.

Monopoly immerses you in financial decision making. All those colorful bills lie at the core of the game. Nearly everything is related to them: the value of the spaces on the board, the cost of buildings, the messages on the cards, the investments and rentals on the deeds. The bills provide the game with its rhythm; it ebbs and flows with each cash exchange. Just as important, the amount of cash you possess affects how others perceive you at any moment (with respect or awe, hopefully not with apathy).

The game’s lessons are acute because you can’t win by playing it safe (translation: by holding on to all your pretty bills). You must invest a good deal of them, rather quickly, in order to win, thereby placing them at risk. The danger you subject your money to is palpable. This sense of vulnerability means that money controls you during the game. You may feel like its master,