3574: [Part 2] How The Game of Life Teaches Personal Finance by ESI of ESI Money on Personal Finance Basics

[00:00:00] Dell PCs with Intel inside are built for the moments that matter. For the moments you plan and the ones you don't. Built for the busy days that turn into all night study sessions. The moment you're working from a cafe and realize every outlet's taken. The times you're deep in your flow and the absolute last thing you need is an auto update throwing off your momentum. That's why Dell builds tech that adapts to the way you actually work. Built with long lasting batteries so you're not scrambling for the moment.

[00:00:30] the closest outlet. And built in intelligence that makes updates around your schedule not in the middle of it. They don't build tech for tech's sake. They build it for you. Find technology built for the way you work at Dell.com slash Dell PCs. Built for you.

[00:00:52] This is Optimal Finance Daily. How The Game of Life Teaches Personal Finance. Part 2 by ESI of ESIMoney.com.

[00:01:02] Number 8. Don't Get Into Debt. One game we played, my wife got sued. Then sued again. Then sued again. By the time it was over, she had to borrow $200,000 to pay off her debts and had to pay an extra $5,000 for every $20,000 borrowed. Though she had lots of income the rest of the game, she got killed when she had to pay it back. Key lesson. Stay or get out of debt. It's a financial killer.

[00:01:31] Number 8. It Pays To Invest. At the start of the game, you can buy an investment. You pay $10,000 for a number on the spinner, 1 through 10, and every time someone spins that number, you get $5,000 from the bank. It's a good deal that has always paid off for every person investing. If your number hits only twice, you're at breakeven. And most numbers will hit many more than two times. Key lesson. Investing is a great way to make your money grow.

[00:02:01] Number 10. Luck has a role in how well you do. Just like in the real world, luck plays a big part in how you do in life. What numbers you roll, what cards you get, what spaces you land on, what decisions others make that impact you, etc. can impact your financial future.

[00:02:19] Of course, you can do all you can to position yourself for success. But luck can then take you one way or the other. Key lesson. Luck plays a role in your finances, though you can influence luck.

[00:02:33] And number 11. Consumer spending can kill you. This game is so ironic. I, the biggest saver in the world, always seemed to land on the consumer spending squares and was forced to buy a big screen TV, a vacation home, or something similar. These can suck significant amounts of cash out of your pocket, and at the end of the game, they count as nothing when tallying up your net worth.

[00:02:58] Key lesson. Control your spending, especially on expensive items that don't have any long-term value. For these reasons, I think life is a great way to teach your kids about how money works in the real world. That said, the game does reinforce some money-related ideas that simply aren't true, and we often took time to point these out to our kids. In particular. Number 1. The price of housing can't go down. In life, you have to buy a house.

[00:03:28] You have the choice of various prices. Each one you buy has a price, as well as the amount you'll get for it when you sell it. In every case, the selling amount is either higher, most cases, or the same, a couple, as the buying price, implying that housing prices can't go down. Well, that might be true in life, but if you've been breathing the last decade in the real world, you know this isn't the case outside the game. Discussion point.

[00:03:55] Owning your home is a good thing, and real estate generally goes up over the long term, but it doesn't always increase in the short term. Number 2. The lottery is a good deal. Every once in a while, someone landed on a spin square. In these cases, each player gets to bet money on one of the 10 spinner numbers. You can bet any amount you like on any one number.

[00:04:20] However, if you have a spin to win card, you get to place bets on four numbers, thus giving you a 40% chance of winning. If your number comes up, you receive 10 times the amount you bet. Given these odds, your expected payout with one square is break-even. You have a 10% chance of winning 10 times your money. And your expected payout is very positive if you have four numbers to bet on.

[00:04:45] In one game, my daughter won the spin lottery twice, netting her about $500,000. She thought that was a pretty good deal. We explains that real life is a lot different. Discussion point. The lottery is a loser's game. Number 3. Get a job based only on the salary. Because the winner of life is the one with the most money, all of your decisions come down to economics. But as we all know, picking a job isn't all about money.

[00:05:15] There's enjoyment of your occupation, what you like to do, satisfaction, quality of life issues, and the like to consider before picking a career. In addition, not everyone has the ability to do every job. For example, not everyone can be a doctor. As we all know, picking a career rarely comes down to an economics-only decision. Discussion point. What you earn is one consideration when picking a career. But you also have to consider other factors,

[00:05:43] like what you like doing, what you're able to do, and so on. And number 4. All focus is on getting the most money. Contrary to the belief of some, life, real life, not the game, isn't all about money this and money that. Certainly, it takes money to survive and live a particular lifestyle. But there's more to life than earning and accumulating money. Discussion point. Making and accumulating a lot of money is fine.

[00:06:12] Just don't let it be the whole focus of your life. Given all the various learnings, both favorable and unfavorable, in the game of life, my wife and I would spend much of the game talking our kids through the various money issues we were confronted with. We were careful not to be overbearing. It's a game, after all. We were trying to have fun. So we commented here and there on how the game is and isn't like real life. Our daughter, in particular, seemed very interested in these sorts of issues

[00:06:41] and often asked additional questions which we discussed after the game. And apparently, some of this sunk in as she's made some great financial decisions lately. As such, we saw that life can be a great way to teach kids or anyone else about personal finance issues. You just listened to part two of the post titled, How the Game of Life Teaches Personal Finance by ESI of ESIMoney.com.

[00:07:10] Dell PCs with Intel inside are built for the moments that matter. For the moments you plan and the ones you don't. Built for the busy days that turn into all-night study sessions. The moment you're working from a cafe and realize every outlet's taken. The times you're deep in your flow and the absolute last thing you need is an auto-update throwing off your momentum. That's why Dell builds tech that adapts to the way you actually work.

[00:07:37] Built with long-lasting batteries so you're not scrambling for the closest outlet. And built-in intelligence that makes updates around your schedule, not in the middle of it. They don't build tech for tech's sake. They build it for you. Find technology built for the way you work at Dell.com slash dellpcs. Built for you. I don't know about you, but even with regular cleaning, it seems like dust is never ending.

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[00:09:01] Get this exclusive podcast-only offer now at airdoctorpro.com. A-I-R-D-O-C-T-O-R-P-R-O dot com, using promo code OFD. I thought the points about career selection and how it isn't just about the money was worth noting today. When I was a kid, I thought earning the most money possible at a job or through a career was the main goal. But now I see that it's a lot more nuanced than that.

[00:09:30] While it's super trendy to tell people to follow their passion when it comes to work, I like the advice from Cal Newport's book, So Good They Can't Ignore You, which I think should be required reading for all high school seniors. Cal argues that following your passion is misguided advice. A better approach is to figure out what you're good at and then build up career capital. Become so good at what you do that you make yourself indispensable.

[00:09:59] Then you can trade that career capital for autonomy. And when you have a good level of autonomy over your work and time, consider not trading that in for more money. More money at that point will have very little effect over your quality of life. I've come to realize at this time in my life, where I'm making less money than I did even in college, that more money isn't always better.

[00:10:24] At a certain point, there are diminishing returns for making more money that you don't need. At a certain point in your financial journey, your risk flips from running out of money to running out of time. I hope to teach our boy not to chase more money just for the sake of having more, but to have an understanding of how much is enough. And that's another episode of Optimal Finance Daily in the books. I'll be back with more content for you tomorrow. So have a great rest of your day,

[00:10:54] and I'll catch you on the Thursday show, where your optimal life awaits. Optimal Finance Daily in the books.