In the business world, a monopoly is a firm that is the sole seller of its product, and there are no close substitutes. Companies like Amazon, Google or Microsoft dominate the markets they operate in, thus becoming monopolies.
Their success is attributed to “network effects”, this means that, the company in question increasingly gains adoption and patronage because it is the company or product with the biggest customer/ supplier base and existing users.
Any new customer looking to choose between options will choose the one with the biggest base, because more people are already in it. For example; there exist other mediums of communication in present times, however, in our modern age most people will prefer to use WhatsApp to text and send videos as it seems more convenient.
Monopolies work with some sort of “snowball effect”- a snowball effect is a situation in which something accelerates in growth (size or importance), at a faster and faster rate. An example of this is the way if one becomes more successful, the more publicity they get and that publicity generates sales.
Going back to the history of the Monopoly game, it was designed 100 years ago as a result of capitalism and its dangers in society. The game, therefore, would help children to be taught about these dangers. At the start of the 20th century, children were part of the regular workforce and they possessed few toys. When U.S. manufacturers created games, they built them to market to parents: to teach as well as to entertain. However, the way it is taught today [monopoly] may not be teaching the lessons their designers hoped to share.
Progressive writer, Elizabeth Magie Phillips, created Monopoly in 1904 to teach players about the dangers of wealth concentration. Originally called The Landlord’s Game, it celebrated the teachings of the anti-monopolist Henry George whose widely read book, Progress and Poverty, published in 1879, argued that governments did not have a right to tax labour. They only had a right to tax land.
This game seems to also be holding some hidden but valuable teachings, believe it or not, it has some solid lessons about personal finance.
- Invest- in the game, as long as you do not run into any problems, you could keep quietly collecting cash and never spending. However, saving it is not the road to victory, you need to make smart purchases and build long-term wealth. In real life, you could miss out on the returns you would get by just holding on to too much cash. Therefore, invest this cash into assets that produce a cash flow or appreciate in value.
- Avoid spending all your money right away- In order to survive some rough times that may pop up, you need to have some money saved up. Just like in the game, you need cash on hand to keep buying properties or you might have to give cash to an opponent or to pay a fee after picking up an unlucky “chance” card. Saving up enables you to be financially set in case you lose your income earner.
- Give negotiation a try- at some point in Monopoly, you will probably start negotiating with your opponents to trade properties or borrow money. Even if you do not own a company, negotiating is a useful skill for your career. You could have the opportunity of meeting a new client and having to strike some sort of deal while making an offer, for instance.
- Your financial goals and the way to achieve them is indeed viewed not as a race but a marathon. The Monopoly game can continue for hours until all players but one has gone bankrupt. Therefore, while it is easy to get excited at the beginning of a goal, it is harder to stay on course. But putting in the work will put you on the right track to achieving your goals.