Does Monopoly Teach Your Kids Good Financial Values?

The mere mention of the word Monopoly brings to mind cosy winter evenings in my living room trying to finally outsmart my older sisters. We had a battered old set which would get pulled out from under our parent’s bed on those nights in which no comedic treat like Cannon and Ball or The Two Ronnies was on. Ah, what a simple life it was back then.

I was rubbish at Monopoly as a kid and I probably still would be if I played it today. However, I wonder whether this game teaches us good or bad financial advice.

Good – Diversify and Win

My oldest sister was a demon at Monopoly. By the time we had been around the board a few times and I had barely enough to buy Old Kent Road her Scottie Dog had snapped up Pall Mall, the Water Works and blooming Fenchurch Station. It is only when looking back now that I realise that she tended to adopt a very clever diversification system. Instead of trying to dominate just one colour – like I always did with those stupid cheap brown streets – she would place her properties around the board. You should do the same in real life and diversify as much as you can, with property, pension plans, stock and anything else you feel comfortable putting your money into.

Bad – Mortgages Aren’t Really Like This

If you learned about the UK property market and mortgage system solely through this board game you would be pretty confused. For a start, each property has a fixed price which never fluctuates over time or through supply and demand. Another point is that you can’t buy with a mortgage; you can only use cold, hard cash. The mortgage system only comes into play when you run out of money and decide to mortgage one of your prized properties. In this case, you get the amount on the card (half the actual value if memory services). Weirdly, you can’t collect rent while a property is mortgaged. If this were the case in real life there would be no buy to let mortgage option around.

Good – The Most Expensive Option Isn’t Always the Best

I spent months if not years hankering after Park Lane and Mayfair. When I finally broke the bank to buy them and build swish hotels no one landed on them for the rest of the game. Meanwhile, my sisters cleaned me out with humble properties elsewhere on the board. It is easy to be tempted into splashing the cash on a vanity investment like this but it doesn’t always work out. You need to ask yourself whether the property is already at its maximum possible value and isn’t going to increase anymore no matter what you do to it. Sometimes going for a cheaper and better value investment is a far better idea.

Editors note: I always have to have the orange set, though it does frustrate when you have hotels on them and someone lands on free parking!

Bad – Too Much Luck

After a particularly brutal defeat at the hands of the capitalist pigs I call sisters I would often wish that Monopoly was more of a skill based game. I was sure that I could out-smart them but I couldn’t out-luck them. The biggest difference between this game and real life is that the roll of the dice influences so much. Will you pass go and collect a couple of hundred quid or will you go straight to jail without passing go? Luck does have its part to play in real life investing but not as much as in this game. You can even collect money from a bank error in Monopoly. When is that ever likely to happen in real life?

What other financial lessons can we learn from Monopoly?

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16 Responses to Does Monopoly Teach Your Kids Good Financial Values?

  1. FI Pilgrim says:

    I credit a lot of my “number savvy” to playing Monopoly so much as a kid. It REALLY helps with learning quick math and understanding money changing hands. I agree that it teaches some bad lessons too, but I don’t think those lessons translated over to my own home-buying experience. All around, it’s a great game in my opinion!
    FI Pilgrim recently posted..What I Love About YNABMy Profile

  2. I love this post! I agree that the game always frustrated me as a kid because so much depended on luck. These days I am working hard to try to make my own luck!
    Dee @ Color Me Frugal recently posted..7 ways to (happily!) contain your standard of livingMy Profile

  3. I like how you pointed out the good AND bad “lessons” Monopoly can teach kids. I think the best one was the one about expensive doesn’t mean better – for a while as a kid my strategy was to only buy the pricey properties, and ignore less expensive ones. I generally lost those games :)
    Kali @ CommonSenseMillennial recently posted..The Importance of Saving No Matter How Much You MakeMy Profile

  4. I was never any good at monopoly. Hopefully that won’t be indicative of my future in real estate.
    Stefanie @ The Broke and Beautiful Life recently posted..Giving On a BudgetMy Profile

  5. Wealth Tortoise says:

    Being the youngest in the family I never did particularly well at Monopoly as a kid. I did much better at ‘Game of Life’ for some reason, but as a young adult I lived life more like ‘Go For Broke!’ Ah, the lessons you learn.
    Wealth Tortoise recently posted..A Cool Million Today, Chump Change TomorrowMy Profile

    • Robert Bell says:

      Us youngest children seem to have a hard time with Monopoly. My older sisters still boast about their ancient victories while I mope

  6. Martin says:

    It is an interesting point you mention however I don’t feel kids look at the board game in that sense, I find kids I play with lean greed from it – owning as many properties as possible to bankrupt other players.
    Martin recently posted..3 Easy Blog Post IdeasMy Profile

    • Robert Bell says:

      That’s a good point Martin. Many people see it is a challenge to ruin other people. What do they learn from this, I wonder?

  7. I learned that a lot is dependent on the roll of the dice. I could be doing really well and then have a few bad rolls. Suddenly I am in the hole or vice versa. The key is to make sure you are prepared for anything life throws at you!
    Jon @ MoneySmartGuides recently posted..How Instant Gratification Has Killed The Stock MarketMy Profile

  8. Monopoly is a great game with more to it than meets the eye. Probably the most applicable skill you can learn is how to negotiate with people i.e creating a win/win. All the side deals that go on is where most of the fun was for me.

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