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Monopoly and its Application to Real Life Financial Decisions

Posted on 31. Jul, 2008 by admin in Tips

Transcript of Monopoly Analogy speech by Adam Lee for private investment group, December 3, 2007, Honolulu, Hawaii.

Monopoly has been enjoyed by households around the world for many generations. The reason for its continued popularity and success is its reflection of the day to day financial choices and challenges we face and how to successfully go through the game of life, survive and be successful.

We can learn a lot from Monopoly and apply it to produce positive financial results.

Let’s start by thinking who usually wins. It is usually the crazy person buying every property they land on but half of the time that person also gets overextended and either wins or dies. What about the passive player? The passive player rarely wins and usually is eliminated quickly. Somewhere in between is the right way to play the game in real life. You want to stay in a strong position, invest wisely and not get overextended.

Whether in life or monopoly, the keys are to build your income sources for the future and solidify your position continually.

A few key points on winning in Monopoly:
1. Buy early, buy often & don’t overextend
2. Even if you buy a small property early on it can secure your future

When you analyze properties: What kind of properties do you like? Everyone likes different properties. Some love railroads while others wait for Boardwalk and Park Place. Do you like low end properties like purple, light blues and lavenders? Do you like the medium end orange, red & yellows? or the luxury end Greens and the famous pair of Boardwalk and Park Place.

Different properties have different pros and cons and fit people according to their investment strategies. For example, railroads get good steady income with no homes or hotels needed. High end properties are expensive to buy and develop but offer a high return when people land on the property.

Low end properties are inexpensive to develop and have a lower pay off so think to yourself would you rather have (2) low end monopolies or (1) high end monopoly? There is no right answer but if you have (0) monopolies that is the wrong answer to the question of how to succeed financially in the current world we live in.

Boardwalk and Park Place are like beach front properties and luxury condos on the gold coast. Green s are Hawaii Loa Ridge, ocean view homes in town, Lanikai, Kahala non beach front type properties. I compare the red and yellow to Kaimuki & Aina Haina type areas. The rest of the properties make up the apartment buildings, condos and properties outside of the prime locations.

I agree there is an element of luck but luck only goes so far and runs out so stick to a sound game plan, buy early, buy properties that make mathematic sense, increase value, don’t overextend, plan well to create a steady income for the future and call me Adam Lee.