Wisdom of Rich Dad

In conjunction with World Children’s Day, Hartamas Shopping Centre (HSC) and Yuber, which provides child training services, organised the Kids Marketplace recently to encourage the entrepreneurial spirit in youths.

The highlights at Kids Marketplace included the Kids Entrepreneurship contest, Cashflow 101 for Kids Challenge, workshops by Yuber and a green bazaar.

A total of 39 teams comprising 78  youngsters participated in the Kids Entrepreneurship contest for the chance to win holiday packages, Yuber scholarships and the grand prize of an Asus Notebook.

Participants  who were grouped under the junior (aged 8-12) and senior (aged 13-18) categories competed for the Best Display, Most Creative and the Most Promising Young Entrepreneur Awards.

The Most Promising Young Entrepreneur, in particular, were judged based on creativity and leadership skills, as well as the ability to make the most profit from an undertaking.

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John Horn, a consultant with McKinsey & Co., thinks “war games” have much to offer business decision makers.

First, to be clear: Business war games don’t involve playing war. They’re analytical exercises that put a business through the paces of planning a strategic response to a worst-case scenario — anything from a devastating recession to the entrance of an aggressive competitor into the same market.

Admittedly, Horn makes his living in part by designing these war games. He thinks they can help us learn by simulating — albeit to a limited extent — real-world environments. The key to their effectiveness, however, lies in their design. There’s a difference between using a game to teach, and trying to learn from a game that’s designed to entertain.

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Recently,  I discovered the Tycoon$ game on Facebook. It is an economic simulation game, where you build a business and grow your “empire”. It is still in beta, but I found it very refined and completely bug free.

One thing that is really interesting about the game is that it gives us insight into how markets and economies work. Most people who make the rules for an economy (politicians) do not really know the effects of their policies. They have an idea about what they think is right, or what they think will happen. However, these ideas are based on opinion, or the unproven theories of economics.

What can we learn from such a “game”?

I think we can learn a lot more than most people think from a game like this. It has a realistic and functioning market for 24 different commodities. You can submit limit orders and become a commodity trader.

Another thing that it teaches us is how psychology expresses itself in the environment and in the markets. We can see that the big producers of any given commodity come in and sell in large lots (20,000 is the maximum, at this time). Yet the consumers are buying in small lots of hundreds or a few thousand. So, perhaps the market prices are under more influence from the large sellers than the small buyers, at least in the short term.

Another interesting thing to consider is what will happen over the next few months. The game is only a few months old, and hardly known. What will happen if the number of players doubles or quadruples over the next few months? What will happen to prices? Will they go up across the board?

What about automobiles? They cannot be produced by new players due to high capital requirements. However, they are consumed by the Housing Industry, which has a very low short term ROI. I think it is fascinating to analyze these markets and their interactions, and predict what will happen.

Although this simulation does represent a simplified economy, it does give us clear analytical proof about whether our theories are correct. It seems to me that this game, or any other economic simulation of similar complexity is a powerful learning tool.

For some people, the real estate mess is no game; it’s an open sore of a subject. But, games can be great ways to learn for good–or ill.

One company that’s turning lemons into virtual lemonade is an outfit called AddictingGames.com. They just released Mortgage Meltdown, a spin on the old Monopoly game.

In Monopoly, you tried to dominate the real estate market. In Mortgage Meltdown, you just try to stay above water. And, just like in real life, there are lots of things that can go wrong from property tax hikes to earthquakes. There are some good things (or less bad things) that can happen, too–just like in real life.

AddictingGames.com is doing two things.

First, they’re showing just how powerful new computer technology is. They’re able to lift the headlines from today’s papers and turn it into a computer simulation. It used to take years to bring a game to market. And, if you noticed, these games are pretty robust.

Another thing the company is doing is, I hope, creating a learning experience. As funny as it may seem, people learned lessons from those Monopoly and Life games. That’s where I learned about rent and mortgages, come to think of it.

Some other games on the company’s websites run the gamut from laundering money to the dental business.

As AddictingGames create more experiences like Mortgage Meltdown, maybe it will help us avoid the costly mistakes of the past.

Unless you’re learning how to launder money. Then you may get a go-to-jail card.

Over the weekend, I got five of my friends together to play this game that’s like Monopoly.  The game Cashflow was developed by Robert Kiyosaki, author of Rich Dad Poor Dad.  It teaches people financial intelligence. 

How can anyone learn financial IQ from a board game right?  I was skeptical in the beginning also.  But I was a fan of his book so I wanted to see what it was about.  It’s now my fourth time playing and I definitely picked up a thing or two.

At my first time playing, I did not land on an opportunity square for the last hour and half of playing.  I was getting shorted even though the odds of my landing on an opportunity is extremely high.  It’s every other spot!  But in life, that happens.  But you can either decide that’s your fate or you can just keep fighting. 

By the fourth time playing, I realized you could BUY other people’s opportunities.  This meant that whenever someone landed on one, they could either use it themselves or sell it to someone else.  Sometimes, that person can’t afford it because they don’t have the necessary capital.  The analogy in real life is like having a really good financial adviser who can suggest opportunities for you.  All you have to do is shell out the money.

More People Knowing The Market = More opportunities for you

Because the Market card came up so rarely, it helped when there were more players in the game.  And the Market card was the only one that can shake things up both good and bad.  So for us in real life, we need to surround ourselves with people that know the market very well.  Only then we will be able to make the right decision to make a gain or to avert a lost.

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I don’t know one person in my sphere of influence that couldn’t use a little extra monetary help. Everyone I know would like to have more money and not have to work so hard everyday to get it. Yet so few people get any income from sources other than their jobs. It doesn’t have to be this way but they do not realize it.

It is important for me to say that I do not think everyone has to have the same goals as me. Not everyone wants to be an entrepreneur or full time investor. Not everyone wants to or is willing to devote their lives to getting out of the rat race. Some people just want a little more than they’ve got now. There is help out there for all types.

So what can these people do? They say they’ve got no extra money to spend, no time to read or the don’t like reading, they just aren’t smart enough to get the principles of money or it’s all too complicated.

Books

Let’s start with the simple – books. Money should not be an issue when it comes to books. There are cheap books from used book stores and online and then there’s the free library. Reading them should not be an issue either. I know that some books are boring and painful to get through. But if a book is enjoyable and easy to read then it should take no effort. If you really don’t like reading then try an audio book and listen to it in your car on the way to work. I would recommend “Rich Dad, Poor Dad” and “The Cashflow Quadrant” books by Robert Kiyosaki as a good place to start. They are easy to read and enjoyable books. But there are others. It doesn’t matter, just read something and start changing your perspective on your own money situation.

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