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For the first few weeks you may see posts/themes on Wealth Lion that you've already seen on FMF. These are put here for the new reader who comes along, knows nothing about FMF, and wonders where I'm coming from. I want to at least have my general thoughts on wealth building, careers, and the like on both sites.
You can also subscribe to the new site by either email or RSS feed.
I will transition to the three posts on FMF and three posts on Wealth Lion per week set-up starting this week for FMF. Wealth Lion will begin posting the first week in June. For the first month or so (and maybe a bit longer), you will likely see some design changes in Wealth Lion as we finish construction. If I waited until everything was 100% completed and perfect to launch the blog, I probably wouldn't do it until 2014. So please bear with me. (And if you find a glitch, please email me!)
I want to thank FMF readers Old Limey, Apex, Mike Hunt, and Money Wise Pastor for looking over Wealth Lion while it was in development. Their feedback was very helpful and appreciated.
So that's how we'll operate for now -- one writer of two blogs, each with its own personal twist. How will it work? Who knows? We'll play it by ear, see how it goes, and adjust as needed along the way. I hope you decide to join me for the ride.
The following is an excerpt from Monopoly, Money, and You: How to Profit from the Game’s Secrets of Success
Most of the book talks about Monopoly strategy, decisions to make that put the odds in your favor, Monopoly trivia, and so forth, so it's not as much of a personal finance book as it's a book about Monopoly that has a finance angle. Anyway, I really enjoyed it (after playing the game for years I learned a ton) and my 14-year-old daughter has it now -- devouring all the tips and tricks. I'm sure she'll use them to kill me at the game. :)
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. 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 list 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, but you are its servant. (That’s often the role we let real money maneuver us into.)
In Monopoly, money creates and destroys. At times it brings players together, while they are making deals, but more often than not it drives them apart—because only one player can win the game, the one who gains all the money. Games are like that. There can be but one victor.
Fortunately, real life stresses cooperative effort to get rich (win-win). You won’t need to bankrupt your neighbor to come out ahead. (But if you try too hard to emulate his glitter, he could bankrupt you!) The game’s need of a clean, decisive outcome results in well-structured rules that permit, condone, and assure that one player (hopefully you) will win everything. For this reason, its lessons are vivid and clear. This is why the
principles of winning Monopoly aren’t difficult to figure out, apply, or learn from. Alas, the “rules” in life are constantly evolving, and their lessons are more difficult to discern in a timely manner. But believe me, you gain an edge when you accept that there are rules and you begin to figure them out.
Handling money in the Monopoly game triggers a broad range of human emotions. You might laugh, shout for joy, grit your teeth—or cry—because of its changing impact on your fortune. This range of drama is a key reason why players come back to play time and again. We like the rollercoaster ride. And that’s why we feel its lessons. We relish joy on the way up and a heightened sense of fear on the way down. Recovery brings relief, but only temporarily. The money game in real life is much the same, when you think about it.
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