ByÂ Fabien Ponson
The basics of finance are becoming more important to more and more people. As people seek to avoid the â€œrat raceâ€, they are realizing that their major limitation is that they donâ€™t have much in the way of financial education. The cashflow 101 game, a financial education game created by Robert Kiyosaki, is attempting to change that.
The game description and the goal
Cashflow 101 teaches people how to use a balance sheet, while at the same time imparting other basic financial knowledge. Players begin on an inner track called the â€œrat raceâ€ where they pull in an income based on a randomly chosen career, such as airplane pilot, secretary, etc. They receive their pay each time that they pass â€œPaydayâ€, and, the higher their income, the higher their monthly expenses. Total income is recorded on balance statements and account statements, and dice determines moves. While moving around the board, they can be hit by random events, such as â€œChildrenâ€ or â€œDoodadsâ€ that require them to pay, as well as options to invest in businesses and rental property, which increase the playerâ€™s passive income. While on the “rat race” track, their goal is to find a way to make their income exceed their expenses by creating a substantial passive income, and by lowering their expenses as much as possible.
This is Robert Kiyosaki’s definition of wealth; when passive income exceeds expenses, and he feels by playing the board game and transferring this principal to real life, people can achieve wealth.
While playing the game, you are learning about assets and liabilities. Whereas â€œdoodadsâ€ are fun to get, and children are important, their effect on your income is a â€œliabilityâ€, or a negative effect. Too many liabilities, and your income will be quickly eaten away. At the same time, investments are â€œassetsâ€ that increase you income.
When the playerâ€™s income has reached a greater amount than their expenses, they move to the â€œFast Track.â€ On the Fast Track, players win by either having $50,000 in income or buying their dream. In order to do so, they must buy options to boost their income. Once the goal of the dream or the income has been realized, the player wins the games.
Part of the gameâ€™s fun is to watch the strategies of other players, as they try strategies ranging from conservative to risky, and see how they pay off. As there is a wide range of potential strategies that can work, and it is a game environment, they will try a few different strategies in order to determine what works the best. In the end, most players have fun, especially when they realize that the game teaches them extremely useful lessons that they can use in their real life financial choices.
Like in your own life
Another aspect of playing the game is that your own real life financial problems, which have been created by your own choices, become high lighted. When it comes to dealing with money, do you let your emotions rule your decisions? Are your strategies too conservative or risky? You might learn some things about yourself when you realize that the way you react during the game mirrors the way you react to situations in your own life.
One criticism of the game is that investments play too major a role in the game, as Robert Kiyosaki, on whose theories the game is based, generally dislikes investments, calling them too unpredictable. Otherwise, the game is good for learning financial theory, as it covers most aspects of creating personal wealth.
The different flavors
Cashflow 101 comes in three basic varieties. There are two board games, one designed for children and one for adults. There is also a Cashflow E-Game that allows players to play against each other no matter where the two of them are. The E-Cashflow is more complicated than the board game, as it has more options, including investing in stock. Although the game is somewhat expensive, at almost $200, the game is arguably worth it, as playing even once will peak your interest in financial theory. The cost could be worth it for anyone itching to escape the rat race.
About The Author:
Fabien Ponson invites you to find cashflow 101 players and clubs near you on the website RatRace Players: Cashflow 101 Players and Clubs database.