How to Play the Cashflow 101 Game

Rich Dad Poor Dad & the Cash flow Game

Recently a person we know played the Cashflow 101 board game! It was loads of fun and, even better, it helped reinforce some important financial lessons.
 
A few months ago he heard about the game and the associated financial self-help book Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money -- That the Poor and Middle Class Do Not by Robert Kiyosaki. He read the book, then started looking for folks in his area who play the game. He used Craigslist to locate members of an impromptu group and found a fellow who would host it at his house.
 
Two attendees, Randall and Mary, had played before; the other attendees were noobies. Fortunately, everyone was very friendly and mutually helpful...Mary took pity on one player and took it upon herself to be his "financial counselor" which saved him from making some (but not all) dumb mistakes.
 
Everyone drew an occupation card at random. My friend became a secretary, making $2500 a month salary and paying $80 car payment, $60 credit card payment, $400 rent, etc. The fellow next to him drew a janitor card. The couple across from him played as one person and drew a doctor card with a very large salary. They thought this was a lucky break, but Mary and Randall cautioned that doctor was the hardest role to "break out of the rat race" from. Events would bear out that truth.
 
Cashflow 101 is a board game with a slight resemblance to Monopoly. Everyone has a token on the board. You role the dice and move your token around the board, collecting your salary from the bank whenever you pass a Payday square. Everyone starts out in the Rat Race, a small circular pathway that you circle and circle until you finally are able to break out. Your primary goal is to break out of the Rat Race and move onto the nicer outer pathway (the Fast Track) which has much larger money-making and recreational opportunities. My friend never broke out of the Rat Race, due to some unfortunate investment decisions and bad luck rolling the dice. When the game ended three players were still in the Rat Race, and two were on the Fast Track.
 
As you move around the Rat Race you are given opportunities to draw a card which describes some sort of deal you may want to invest in. One example of a deal: a software company is for sale, it has no income (cash flow), you can buy the company with $5000 cash or finance the purchase for $500 per month...that is a deal my friend foolishly accepted on his lowly secretary's salary. Then he got a very lucky break because another player drew a card which represented someone looking to buy the software company for $100,000. Instantly my friend became a very rich secretary! Unfortunately, he was still in the Rat Race because he didn't have any passive income.
 
To get out of the Rat Race is simple in concept...your passive income (interest, dividends, real estate and business income) must exceed your total expenses. My friend needed to use his new wealth to buy some rental property with positive cash flow, or do some other investment that would throw off passive income. But, the game ended before he was able to do this.
 
I mentioned the doctor earlier. The couple playing that role had some disagreements whenever they had the option to buy into a deal...she was conservative and he was a risk-taker. They hit some bad luck on the board, lost their house and all their money and actually "went bankrupt." That would have ended the game for them except that the other players lent them the $10 they needed to stay solvent and keep playing. They didn't ever make it out of the Rat Race. And just think, mom always wanted you to marry a doctor!
 
Randall said that he plays the game with his sons, and it has made them much wiser about money and taught them how to read a balance sheet.
 
The whole game took about 2 hours. A happier group of sober people you won't often find! At the end Randall asked everyone for their impressions of the game, and everyone expressed that they had learned something useful about real-life investing and hoped to play it again to increase their understanding of how to get off of the Rat Race.