Play Monopoly, Create Financial Freedom, Start Now!

I’ve been a massive fan of Monopoly ever since I was first introduced to the game back in the late 1990s. Thinking back it’s brought me a great deal of fun, laughter, and competitive moments among friends, with the occasional thought of I, wonder if we’ll remain friends after this game. Hours and hours were spent playing the game but I never understood the lessons the game was trying to teach all of us, teach me! As one gets older one strives to make competitive pay for the work one does in their industry but always striving (or hoping) to make more in order to keep one’s family fed, and dressed, put a roof over their heads, provide for their every need/wants and ideally during that journey achieving financial freedom way before the typical retirement age of 65.

Today looking back I wish I had done some things differently but every decision has taught me a lesson and here we are reflecting back. I can break down my friends/connections into three buckets, i) the adventurous (aka the gamblers) ii) the monopoly players (aka calculated risk takers), and iii) the daily grinders (the non-risk takers). Depending on your age, your financial goals, financial timelines, financial literacy, financial upbringing, and other personal psychological, democratic, and situational factors all have gone into landing all of us into one of these buckets.

The adventurous like to take outsized risks for outsized gains hence the gamblers reference, these are the folks who start tech companies, marketing agencies, e-Commerce retail businesses, and so forth. These businesses have the potential to achieve outsized gains and make their owners very well off, but the failure rates are super high especially as the years go on. I know because I was a part of this group for 5 years before deciding on another path.

What we should all aspire to be however are Monopoly players, in my network the most number of individuals who’d I’d consider successful fall into this category. These could include people who work the 9-5 but also could include self-employed, regularly investing in the markets, and pursuing other projects to create wealth. People who’ve followed a single system and its teachings to achieve a higher level of financial outcomes. More to be discussed in the 6 steps to financial freedom section.

The daily grinders are 100% made up of people who work the typical 9-5, have money managers/financial advisors manage their wealth accumulation and preservation and/or who exclusively invest in mutual funds and ETFs. Most of these individuals would be happy to hit retirement at 65 and enjoy the grind till that time has come.

6 Steps To Financial Freedom – The Lessons of Monopoly:

1. Own properties (not just your principal residence, and since the game is mainly focused on real estate this is where most of your focus should be placed to grow your wealth)
2. Own utility companies (like Fortis –FTO.TO on the TSX)
3. Own railroads or transportation businesses (like Canadian National Railway – CNR.TO on the TSX)
4. Avoid any type of get-rich scam or doing harm to others in order to avoid jail time. Usually, the faster you want to get rich (or is promised or sold) the more problems you could run into (just look at the recent fiasco with FTX in the crypto markets)
5. And Invest in growth companies similar to landing on “?” which are sometimes great but sometimes not so beneficial, calculated and allocating a small amount of your portfolio to these won’t leave you broke but might add some growth enhancements over time.
6. Finally and most importantly, in the game when you hit “GO” you collect dollars, in real life those could be represented by payments made to you in the form of rental income, real estate dividends, utility companies, transportation stocks, and bank dividends (like TD.TO on the TSX).

Keep in mind hitting ‘Go’ as the last man or woman standing to the very end proves you’ve built a cash-flowing lifestyle. Good enough to keep supporting your day-to-day lifestyle and your financial goals while paying for those unfortunate hiccups life throws at you like unforeseen expenses, like a trigger rate increase on a rental property with a variable mortgage attached to it. When we look at cash flow from a different angle all you need to do in today’s markets (2022) is to look at businesses (stocks) that are producing positive cash flow and profits, those are the companies taking the least amount of a beating and/or growing (like TD Canada Trust – TD.TO or Suncor – SU.TO on the TSX) vs some tech companies who are great at growing top line but have high debt balances and aren’t profitable yet – even though they may seem to have high future potential. Whether you’re a person or a business the fundamentals of a strong balance sheet, income statement and cash flow determine if you’ll be a King/Queen … OHHH that sounds a lot like how you win in the game of Monopoly, doesn’t it?

Something to note is that not a single one of these steps is an overwhelming amount of sexiness, in aggregate it’s a very slow-growing BUT growth-driven financial strategy for achieving financial freedom.

YouTubeVideo: 2023: How to become a Millionaire in a Day!

Also keep in mind, as far as buying properties is concerned the location is key to collecting more rental income and I’d even go as far as saying finding more quality tenants (assuming you did your due diligence when picking them). And similar to the game, over the course of time in the game, you upgrade the properties, finance them and continue to positively impact the annual income you generate for yourself and your family. One thing to call out – I admit, it’s financially harder to own a rental home in Vancouver or Toronto vs the outskirts like Windsor or Bowmanville in Ontario but in markets like today when prices decline they tend to fall faster/further in the outskirts vs closer to major cities and when the market does start to recover near major city center properties tend to recover faster/further than those on the outskirts. Another factor to keep in mind is properties closer to major cities tend to cash flow less vs outskirt properties which usually have better cashflow situations. But which you choose to invest in comes down to personal comfort zones and risk tolerances.

I’ll keep updating this blog as I go through my own journey as mine is a bit different but this is just a thought that I wish I had years ago once I finished University. For now, I’ll keep playing the game with the fundamentals of Monopoly as guidance.

Let’s play Monopoly …

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HOA

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