Are You Doing Business With Monopoly Money?

During the depths of the Great Depression, the Monopoly game appeared in the marketplace. For many children, Monopoly is the first introduction to using money for business decisions.

For many players, Monopoly is the first introduction to real estate. Players buy and sell property and they collect and pay rents. Players have fun playing the game. The players who have the most fun are the winners.

If fact, this board game teaches money myths that can affect your ability to make real money in your business. So, the real question is: Are you doing business with ideas about money that you learned by playing Monopoly?

One Monopoly Money Myth is that amount of money available is limited. The game begins with a fixed amount of money. The game ends with the same amount of money. The only difference between the beginning and the end of the game is that the money, which was evenly distributed at the beginning of the game, is now concentrated in the hands of the winner.

The truth is that Monopoly is not a money-making game. No one actually makes money in Monopoly because Monopoly is a zero sum game. This is why Monopoly is not a good example of what happens in business. A successful business makes money by creating products and services. Successful businesses are not zero sum games.

This is how it works. You create a product. The product costs you money to produce, market, and sell. If you sell the product for more than your costs, you make a profit. This profit is money that did not exist when you started the game.

In other words, you actually create money. You have not only added money to your bottom line, you have added more money to the money supply. This is the critical money difference between Monopoly and business. Profitable businesses make money. No one makes money in Monopoly.

What lesson does this teach? Monopoly teaches players that money is a commodity in limited supply. In the real world, money is not a commodity in limited supply, because money is created in transactions. This is why the amount of money available is potentially unlimited. The more transactions that occur, the more money is created.

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