According to dictionary.com, the term “monopoly” is defined as “exclusive control of a commodity or service in a particular market or a control that makes possible the manipulation of prices.”
I highly doubt I knew what that meant when I was playing the popular board game with the same title. Monopoly was my least favourite board game growing up, yet we had a copy in the house, so I did play it several times. I must have gotten it as a Christmas or birthday gift, but I don’t ever remember asking for it. To be honest, I considered it a “bored” game vs. a board game. I think what I hated about it the most was that it could potentially take hours for the game to end, since you had to become bankrupt to be eliminated from the game.
How ironic is it that the board game I hated the most, is actually the epitome of personal finance board games, if there ever was a category.
Money in Monopoly
Think about it.
- One player is designated as a banker and doles out the money to each of the players
- You get a “salary” of $200 every time you pass GO
- You pay income tax
- You have the opportunity to buy a property once you land on it
- You can place a bid on the property if the person who lands on it doesn’t want to purchase it
- Of course everyone wants to own the Boardwalk because it’s the most expensive property on the board
- You have the option to buy houses and hotels on your property to increase your earnings. Ideally you would want to buy all the properties of a colour group so that the rent is doubled on all unimproved lots of that particular colour group (hence, it becomes a monopoly).
I was just a kid playing a game, so I never really had much of a strategy. Most of the time, I just bought whatever property I landed on and hoped for the best. I think the idea of collecting $200 every time I passed GO was more appealing.
Just like in real life, you need to take some risk in Monopoly to reap the rewards. This isn’t a game about playing it safe.
How Monopoly Relates to Personal Finance
In my opinion, Monopoly is the ONE game that sheds light on several aspects of personal finance. It makes you think about money. How to manage your money. How to build wealth. Risk tolerance. Knowing when to take a risk. Buying, owning and investing in real estate. It is a game that can be used as a tool to teach kids and adults about how important it is to manage your money and grow your wealth.
Ironically enough, the board game’s designer, Charles Darrow, invented* the game during a time when personal wealth was at an all-time low: The Great Depression. He was an unemployed salesman trying to support his family through odd jobs. At his own leisure, he would draw up the streets of Atlantic City on his kitchen table-cloth with the idea that a game could come out of it. It eventually became a favourite pastime amongst friends and family to buy, rent, and sell real estate. During a time when money was very tight, playing Monopoly was a chance to escape the harsh reality of the Great Depression.
Parker Brothers had initially turned down Darrow when he tried to sell the idea to the game manufacturer. Darrow manufactured the game on his own and filled orders for department stores such as F.A.O. Schwarz. It was only when a customer mentioned the game to a friend, a friend whose husband happened to be president of Parker Brothers at the time, that Parker Brothers finally became interested.
The company bought the game and promised Darrow royalties on the sales of the game. The royalties from Monopoly turned Charles Darrow into a millionaire, the first game inventor to ever make that much money.
*Note: There is additional information about how Charles Darrow’s version of Monopoly is strikingly similar to a game invented thirty years earlier called The Landlord’s Game by a woman named Lizzie J. Magie. The full story can be found in the footnote reference.