Learning Smart Investing through Cashflow 101 eGame

What is Cashflow 101? It is a realistic simulation of how you play cashflow in the real world only in this game you don’t really lose your shirt and you learn how to win in the real world. It is fun, challenging, educational. Now we know what to do.

The board game looks easy and similar to Monopoly board game. I was looking forward to playing Cashflow 101 whenever there is a chance. And each time I played the game, I learned different lessons. Although it’s only a board game but it’s very closely linked to your financial life. The game reflects the player’s personalities and the way the player handles money.

The first objective of the game is for you to get out of rat race and move onto financial fast track. Next objective is for you to achieve your dream while you’re on financial fast track.

But before you talk about financial fast track, how do you get out of rat race first?

To get out of rat race, you must have equal or more passive income than your monthly expenses. In other words, your passive income must be enough to cover your monthly expenses before you can move onto financial fast track. Like everyone else, you have your own profession. You have a job and you receive paycheck at a fixed time interval. It’s what you do differently that determines how fast you get out of rat race.

But how do you accumulate enough passive income to get out from rat race?

There are only two ways to achieve this: buying rental property and owning businesses. As in real life, you are presented with many opportunities to make money during the game. You make decisions whether to invest your hard earned money in opportunities presented to you.

You evaluate the opportunities based on market conditions at the moment. You’ll never know whether your investments are good or bad.
Some people get very excited when they get ‘doodads.’ But buying doodads will not help you to get out of rat race. So to get out of rat race, the trick is to accumulate as many assets as possible by investing in money opportunities that appear around you. By playing this game, you know very clearly what asset is and what liability is. Once you know the difference, you focus on accumulating assets rather than liabilities. The feeling is great when you are able to get out of rat race and move onto financial fast track. No words can describe my feelings when I first got out of rat race.

Why?
When you’re on financial fast track, money is no problem as it will come regardless of whether you work or not. You do not depend on a job to receive your money anymore. You are totally free to do what you love. When you play this game, you are able to see all sorts of people characters. Some are very conservative with money, some are risk takers, some feel very upset when they lose they turn, and so forth.

The other benefit of playing this game is you know your emotional part of how you perceive money. At the end of the day, you know yourself better and you can get rid of mental barriers that are holding you back from achieving financial success. To be honest, I didn’t know that I could learn so much from playing a board game which looked so simple!

12 Tips For Getting The Most Value From The Cashflow 101 Game

  1. Don’t cheat. The purpose of the game Cashflow 101 is for you to learn so if you cheat you learn to cheat. Why make money illegally when it is so easy to do it legally?
  2. Read the rules. You should especially read the three-hour millionaire piece on the back of the Cashflow 101 rulebook. See also Robert Kiyosaki’s Hot Tips page that comes with the game. Know the legal side of things and listen to the advice of professionals.
  3. Find learners to play it with. Find people who want to learn more about investing and money to play with. It is wholly different to play with people with the same money and financial interests, than family and friends who play with you because no one else would. Some action is better than none, but better yet is someone motivated to the action for his/her own personal reasons.
  4. Know there will always come another deal. If you haven’t got interest in a deal at this very moment, know that the next deal of the decade is around the corner (or the next card in the deck).
  5. Investigate your options. Don’t let a shortage of cash let you out of great deals. There are other people in the game that might be interested in the deals only you’ve got access too.
  6. Learn to share. Share deals – split the cost and the return if you feel the risk of borrowing the money is too great.
  7. Understand the power of leverage. If that $1 deal comes along and you don’t have any cash, borrow if you must, but take it. This is just one example of how you can leverage of the bank’s money for extraordinary returns.
  8. Have backup in a calculator. Yes, you might know your sums pretty well, but it does not hurt to have a calculator handy for estimating how long it will take you to get out of the rat race.
  9. Understand potential of grey areas in rules. Yes, rules and laws do not cover everything so there might be some loopholes. But rather than using loopholes, set up a contract that at least two parties can agree to that is a win-win situation for both. Do not see the absence of rules as an obstacle, but rather see it as an opportunity.

For the advanced player:

  1. Play it real. Change the job cards to the actual jobs that some of your Cashflow circle members has and see how different people would get out of your financial situation. Example: Job Title – Store Checkout Clerk, Salary $1,500, Taxes $300, Monthly Cashflow $150, etc.
  2. Play it real II. Change the Big Deal, Small Deal, Doodad and Market cards to reflect situations that you have been in personally, or where you might land in. Example: Market Card – Lose all assets due to litigation; Doodad – Buy new computer for $1,000 monthly expenses goes up by $150; Small deal – Buy stock in a small-cap company (market card might either quadruple your money or lose your whole investment); etc.
  3. Teach and learn. There is always some area where you will be better in than others – why don’t you teach them how they can get better at it. Give and then receive. Allow others to teach you in areas where they are more skilled than you. Leon van der Walt is an aspiring netrepreneur in the fields of inspiration and financial freedom. Leon has a masters degree in quantitative risk management and when not working on the Net is a bank employee. He strives to continually improve himself and is focussing on increasing financial literacy.

How to Kick Butt at Cashflow 101.

Here’s the lesson learned…:

  • give up your illusion that money is real.
  • never evaluate whether or not to complete deal based on whether or not you have the money or can afford it. Evaluate based on whether or not it is a good deal and then borrow or partner based on that fact.
  • you can’t get out of the rat race if you don’t take action [buy assets].
  • the real game is played on your income statement / balance sheet, not on the game board.

Cashflow 101 takeaways for real life:

  • learn to evaluate the assets you purchase so that you increase your odds of picking long term value propositions rather than gimmick opportunities.
  • build and maintain a great credit rating and relationship with your banker so you have access to funds when you do find a worthwhile asset to purchase.
  • you must accumulate [purchase, build or inherit] assets that put money in your pocket if you want to get rich. Sitting on the couch and dreaming of 6 month vacations or freedom from a job or buying a lottery ticket don’t count as real action.

In the game we have no fear of losing money, in real life it is still there. It is clear to me that this is the single most determining factor of success in the world of finance. Fear clouds decisions and its best friend greed will mess with you big time on the other side of the coin.

Give up both of those and you’ll be rich in no time, I’m sure of it. Therefore the beauty of the game, a chance to taste that freedom with without having to eat from dumpsters if you mess up … and before long that lovely taste of freedom from fear and greed will begin to seep into your real life financial psyche.

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