Lessons from Cashflow 101 Game

Have you ever heard of a game called Cashflow 101? If no, it’s a board game invented by Robert Kiyosaki. If you have heard of it, have you played the game before?

Basically, the game has two stages. The first stage is the “rat race” and the second stage is the “fast track.” In the rat race, you’re supposed to accummulate assets/investments and gain a total passive income to match you expenses. Once you have achieved this, you’re out of the rat rate and move on to the fast track. You either win the game by purchasing your dream or by further accummulating assets/investments in the fast track so that your passive income reached a certain target.

What do I think about this game? I think it’s fabulous. It isย  inaccurate in terms of reflecting what actually happens in real life but the basic principles of the game are pretty accurate. I learnt a lot from this game.

Before starting the game, you are assigned a profession and you are provided with a list of income and expenses. Income and expenses are set in accordance to your profession. A chef for example has low salary, thus low expenses. A doctor on the other hand might have a higher salary but also really high expenses. This is true in a sense that if one has a lot of money to spend, he/she tends to spend more. If your expenses is high, that means it’s harder for you to get out of the rat race. So, the principle is, it doesn’t mean that the higher your salary is, the easier it is for you to get out of the rat race. In other words, having a high salary doesn’t guarantee that you’ll be better off. It all comes down to how you manage your expenses.

In real life, if you earn a huge salary but you can maintain a low-key life with low expenses, then by all means, you’ve got an advantage there. If you earn $20,000 per month but can still maintain only $2,000 of expenses, you’ll be able to exit the rat race quicker. Think about it the next time you get a pay rise or a lump sum of cash. Don’t spend it on something useless. Think long-term.

Another lesson is that you need to get creative in scoring yourself good deals. For example, if you come across a real estate deal that gives you 98% ROI (return on investment) and you do not have enough cash to pay for the down payment. In the game, we could raise money by taking up a bank loan (personal loan) instead. Yes, the interest rate might be high, but in the long-run, it still is a good deal. Your net cashflow from the real estate might ease the burden. You can then sell the real estate in the future at a higher price. This extra wad of cash can then be used to fund further investments. In real life though, most of us would just pass up the deal. How many of us give excuses like “No, I don’t have enough money” when faced with investment decisions? Remember the saying, when there is a will, there is a way?

All in all, to succeed in getting out of the rat race and be financially free quicker, we need to develop our financial intelligence and be creative.

About nadlique

This blog is about the journey of a 28-year-old Malaysian towards financial freedom. This blog was started back when the blogger was 21 years old. However, his journey towards financial freedom had begun way before that. Materials such as investing, business, entrepreneurship, equities, and real estate are presented. The author also posts his thoughts and observations on life in general.

Comments

  1. owh..i’ve played this board game before..

    but for the kids ones..lol..

    never really get to finish reading any of Kiyosaki’s books..sadly..

  2. is the kids’ one easy?

    I played the board game a few times but right now, I’m playing the e-game.

    the board game friggin expensive ๐Ÿ˜€

    here in Australia, I think about a few hundred dollars.

  3. its damn easy..haha..

    owh..i didnt know theres the e-game..

    i think the board game is quite expensive here too..but maybe not as expensive as the ones in OZ..

  4. i think it costs about AUD300 here. The e-game also quite expensive. I borrowed mine from a friend ๐Ÿ™‚

  5. owh..dang..it is expensive.. :p

    hows the game so far ? always wanted to play it..i think my parents have the board games fer adults..

    gotta check again later..

  6. the game is not too bad. i learnt quite a lot from this game, though after playing it over and over again, it can get a bit dry ๐Ÿ™‚

  7. owh..ever tried those online trading ? i tried the forex [dot] com practice account before..

  8. I am trading online actually. I’m a part time CFD trader. Have a look at my posts on CFDs.

    So, what do you think of Forex trading? You like it?

  9. OMG !! i am sooo gonna check that out..

    yea..i love it..asked my dad if i can use his account so that i can go on trading for real..he wont let me.. *sigh… ๐Ÿ™

  10. Don’t know if CFD is available in Malaysia though.

    Do take care with CFD and Forex. Leverage is a double-edged sword.

  11. I havn’t played the game yet but I’ve often heard that it is not so much what you make but what you do with what you make.

    I just started My Stock Market Journey:

    http://www.ourstockmarketjourney.blogspot.com/

    and I really like the information that you provide on your blog.

    Alisa

  12. Hello,

    I played the cashflow game quite a few times and it showed me a lot about money. The basics are there and it’s fun to try different strategies.

    3 years ago (after playing for the first times) I created a website where people (owning a game or not) could find other to play… it’s @ ratrace-players.com .
    At the time, I did not know if it would grow… but I did slowly and now 390 players are registered and around 100 clubs.

    By the way, if you played the cashflow game (101, kids, egame…), I am looking for reviews. Check the home page of my website.

    Thanks.

Trackbacks

  1. […] Read the rest of this great post here […]

  2. […] Robert Kiyosaki’s Cashflow 101 board game illustrates this point pretty well. It doesn’t mean that if you’re a high-flying lawyer (not targeting any lawyers here ๐Ÿ˜› ) earning big bucks, then you are way richer than the truck driver earning a modest salary. All that matters is how you manage your expenditures’ list, folks. […]

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