Money making lessons you can learn from Monopoly

THE goal in Monopoly is to cause total financial destruction to everyone around you.
The world's leading expert in the game concedes that that's a little harsh. But Monopoly man Philip Orbanes also says there are a lot of parts to the game's strategy that can help people make money in real life.
Mr Orbanes, who has served as chief judge of world Monopoly tournaments for more than 30 years and is the author of the recently released Monopoly, Money and You, has picked up on many tricks world champions use to win the game, and says they are just as useful for building long-term wealth.
"Most of us really don't get good financial training during our schooling, we have to learn as we go and that means we make financial mistakes, especially in investing," said Mr Orbanes, who worked as a senior vice present at Parker Brothers, the company that released Monopoly.
"If you know what works in Monopoly you can use your experience to ground your decisions."
Spread your wealth
Monopoly teaches people the importance of diversifying their assets, says Mr Orbanes.
"You start the game with only cash, but you cannot win Monopoly if you stay in cash," he said.
"It's the same in real life, if you just have your money sitting in a bank at some paltry rate of interest, you're not going to make much money."
In Monopoly, you need a colour group of properties in order to accomplish anything in the game.
"But you also need some income production assets, like three or four train stations," he said.
"They provide the income you need to build up your investment group."
Mr Orbanes said in real life, you have to spread your money across a number of things – such as stocks, bonds and real estate - to build real wealth.
"You need to have a balanced approach for the long-term game because if you put everything into the best or hottest investment you could lose everything."
Don't buy into fashionable investments
Mr Orbanes said one of the great fallacies in Monopoly is that the two dark blue properties, Park Lane and Mayfair, are the best properties because they are expensive and prestigious.
"In reality the best to own are the three oranges - the oranges lie the ideal distance from jail and players go to jail frequently throughout the game so they land on them all the time," he said.
With investments - Monopoly or otherwise - you have to think about location, value for money and how it will perform in the long-term.
"Just look at the stock price of Apple, a year or so ago everyone was so enamoured with the stock, wondering when it was going to hit $US1000," he said.
"Now it's just $US420 and not much has changed in the company but it went out of fashion very quickly."
Don't sell your investments short
Mr Orbanes said every investment has an ideal amount of money you should put into it.
"In Monopoly the ideal investment once you have a colour group is three houses on each square," he said.
"If you look at the deeds for any property in the game there's an incredibly big increase in rent between two houses and three houses.
"If you were going to stay on just two you would be really underutilising the rent potential."
Mr Orbanes says this teaches an important lesson about return on investment – you need to make sure you invest enough in your assets so you get the maximum pay off long-term.
"You have to get more money for what you're investing if you want to grow your nest egg and reach your goals," he said.
Don't be ostentatious about your wealth
In every game of Monopoly there comes a time when you've got to make deals in order to get the properties you want. This is when your relationships with the other players become very important.
"You need to present yourself as the type of player that your opponents won't mind losing to," Mr Orbanes said.
"You don't want to lose to someone who is arrogant or who treats you with disrespect - that's a player you want to keep from winning at all costs."
Mr Orbanes says in order to be a good negotiator you need to understand what the other person wants and not let your ego get in the way. This will make people want to help you.
"Don't go to lengths to brag about what you accomplished or make people feel inferior because then people won't come to you with opportunities like a job offer or an investment tip," he said.
"You shut down those opportunities if you don't present yourself as someone who is thinking about others."
Don't get complacent
Mr Orbanes points to the 2009 Monopoly World Championship as a cautionary tale about what can happen when you don't watch the market.
Players from the US, Russia and New Zealand had just made a three way trade and they each ended up with a very good colour group; one orange, one green, one yellow.
Norway, who had been shut out of negotiations, then offered what seemed like an outstandingly bad trade. He gave Russia a red property in return for a less valuable a light blue square which meant Russia owned two colour sets on the board.
"It seemed like a waste, but it was the game winning trade," Mr Orbanes said.
"Even though other groups were far more valuable and powerful, it was all about timing and location.
"He noticed all the tokens were coming up on the light blues, and he had a lot of cash because he'd been locked out of the negotiations."
The Norwegian player built up houses and sucked the other players' spare cash so they couldn't develop their investments - a move that won him the game.
Lesson: If you're a good financial position, it doesn't mean you can stop paying attention to the conditions around you.
"Complacency is dangerous, that's usually when something expected hits you," Mr Orbanes said.
Like having to go to jail. Without collecting $200.