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.Monopoly teaches players to buy and sell property, collect and pay rents. The game is fun, especially for the winners.

My question is: Are the lessons you learned playing Monopoly killing your capacity to make real money in your business? Monopoly teaches money myths that can keep you struggling with money in your business.A Monopoly game begins with a fixed amount of money. The game ends with the same amount of money. By the end of the game, the winner has most of the money. This leads to the first Monopoly Money Myth: The amount of money available is limited.

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.When you create a profit, you create money. You add more money to the money supply. It's not just that you have more money, but more money now exists. This is the essential money difference between Monopoly and business. No one makes money in Monopoly. In contrast, when businesses make profits, they actually increase the amount of money available.

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.