Cashflow 101 is a serious boardgame by a personal finance educator and author of the Rich Dad, Poor Dad series of books. Cashflow is the most successful serious boardgame ever made. Perusing online group sites, like Yahoo! Groups or Meetup, you will realize that there are active Cashflow boardgame clubs in every major city around the world. It may be easier to find people to play Cashflow than Catan or Puerto Rico. It is amazing that a game that is self-published and retails for $200 has a large global fanbase.
Cashflow is a financial simulator using RPG elements and simplified stock and real estate markets. You can play several pregenerated character professions in the upper class like a Doctor and Lawyer or lower class professions like Truck Driver and Janitor. The characters have stats like debt, income, spending, and other financial details but they all net out to one value: your cash flow. Cash flow is how much one keeps after all the expense are paid from a paycheck. In Cashflow, although upper class professions like the Doctor get paid more, their expenses are higher so the cash flow for a Doctor is not significantly better than for, say, a Teacher or a Janitor.
The goal of the game is in two parts. First goal is get out of the Rat Race -- the daily grind of working at a job, represented as a hamster wheel-like circle on the gameboard. You exit the Rat Race when your passive income is greater than your expenses. Passive income is money that is earned that you do not actively work to earn, commonly rental income in Cashflow. The typical way to increase your passive income is by trading stocks to earn a lump sum that you can apply as down payment on a condo or a small home that you can rent out and later trade up to bigger properties. Sounds simple, right? What is hard for most people is this -- it is nearly impossible to get out of the Rat Race without borrowing money. Thus the key to getting out of the Rat Race is not if but when and how much one should borrow. Many of us feel that debt is bad and thus borrowing money to invest, even in game, makes people uncomfortable. Only if you can overcome your discomfort of debt can you exit the Rat Race.
Being a roll-and-move game, here are some spaces in the Rat Race:
- Downsize -- get laid off and lose two turns but still pay expenses.
- Charity -- pay 10% income to roll two dice rather one die for movement for three turns. On average, allows you to collect more paychecks at a faster rate.
- Doodads -- random luxury goods ranging from gourmet coffee to a down payment on a yacht. Interferes with building critical mass of capital need to invest in the real estate market.
- Opportunity -- choose between Small or Large opportunities. Small opportunities cards have stock and small properties while Large opportunity offer multi-unit properties or large houses and businesses like a pizzeria or a car wash.
- Baby -- surprise, you are a dad/mom! The most cash flow draining event in the game.
- Market -- draw a market card that has a potential buyer for your real estate properties.
Once you exit the Rat Race, you go around a larger outer track trying to land on a dream space that you marked with your color cheese at the beginning of the game. The game gets dull right after you exit the Rat Race because there is no strategy or planning -- roll your dice and pray that you land on a specific space to end the game. I recommending only playing to exit the Rat Race and skip the outer track.
Game design-wise Cashflow is innovate in the use of RPG elements in a creative way but is marred by the archaic roll-and-move mechanic and poorly balanced cards, such as the $1 stock which later can be sold for up to $40. However Cashflow tends to offend many in the gaming community who simply see the game being too simple for $200 and therefore judge it as a scam. Understand that Cashflow is targeting people who want to learn more about investing and is better than a video or a book on investing because you are actively engaged in a simulation. As with many serious games, fun is secondary to learning something and Cashflow does a good job of teaching about passive income and risk management. As much as we ask people to understand that games are not not "mere entertainment" and therefore accept or at least tolerate Super Columbine Massacre RPG, we should accept Cashflow seriously as well.
Real Estate Delusions
The idea that ownership of real estate rental properties is the main route to wealth strikes me as seriously stupid. But hey.
Funny Story
I played this in high school for my student store class. And not a month after my second quarter of it, my 35 year old teacher retired by cashing out on real estate. This was BEFORE the crash, obviously.
I was considering reviewing
I was considering reviewing it after hearing this guy talk on a podcast or something, but couldn't furbish the goods.
Of course, this was designed in the 90s when stocks and real-estate were in the prime of a multi-decade bull market. If you had to adapt this game today, the bull market might be in trading precious metal options against some hard physical. The point is, there's always a bull market somewhere, the fallout of all the debt from the stocks and RE bull market is what's driving the bull market in precious metals. Later it'll be new currency stability and tech that drives people to sell gold and buy new companies, though the majority will be holding on their gold long before the peak comes.
Speaking of bull markets, look at some emerging market stock indices. Or better yet, try and hire some freelance developers in emerging markets. Just got back from this dev fest and the really experienced people are approaching US rates.
You've got that right
"It may be easier to find people to play Cashflow than Catan or Puerto Rico."
You've got that right. When I arrived in Japan about a month ago and started looking for local Ticket to Ride players, my searches inadvertently pulled up far more Cashflow 101 players than anything else.
Also, thanks to PTT for introducing me to Eurogames. Although I must admit my own development efforts are suffering as a result! :D
How to get rich by selling "how to get rich" merchandise.
Yeah, after googling around, I'd have to agree that $200 for this sort of game is a scam, much like the rest of the rich-dad series. I think it's fair to label Kiyosaki as the cause/product of the housing bubble. And the educational content of his line of books, audio tapes, video games, board games, etc, is questionable at best. It has an economics theme. It gets people thinking about money. Unfortunately, it teaches a lot of questionable and flat-out wrong financial advice. And so saying that this is serious game is a bit like saying that the tea-party is serious political party.
But I'd also have to complain about his overall view on life. Living off of interest, perpetual money, hiring people to make money with your money, that's the high-life right there. But it's economically evil. It's pure unmitigated waste. No productive work is actually being done when you exit the rat race. Achieving that state is synonymous with becoming a parasite on society, not really any better than those on welfare.
All ye indie developers look upon this work and despair, for this is the corporate drivel that will outsell your genius.
Branding
Whilst I will not get into a debate about the evils of investing or of employing others, I think HeckRuler has some valid points. In particular, I am interested in the one about "this is the corporate drivel that will outsell your genius".
He has a point. How does a game retail for $200 when the average board game retails for about a quarter of that? The costs are probably about the same, whilst the gameplay sounds like it may not be much better. It appears to have only two things going for it: It is a serious game; it is part of a well-established brand.
Personally I think people who are willing to invest $200 in this game as part of their plans to get rich are wasting their money.
As for branding, that is becoming more commonplace in games both in terms of sequels and licensed products.
The $200 price tag of Cashflow 101 is not warranted because of the quality of the game, but because of the Rich Dad, Poor Dad brand. Even if you created a superior game in terms of both gameplay and educational content, unless you had the name to go with it you would struggle to earn that kind of money.
Do not get it...
HeckRuler,
Kiyosaki already retired from a before the recent housing bubble. Real estate market, like other markets are cyclical and at some point will rise again.
You exit the Rat Race by buying a business or rental properties. Is managing multiple properties and/or businesses not work? People on welfare take from the system while businesses create revenue and pay taxes. How is this parasitic? I pay rent to a sweet old lady. She offer a roof over my head at market rate. She is a business woman who provides living quarters for a price. Is this evil?
I really don't understand your chain of thought. Does one have to toil with their hands to call it real work?
Master Marketer
Zild,
You charges what people are willing to pay. That price has nothing to production cost. Cashflow competes with financial seminars and CD and workbook combos, and not other board games. Many people who buy Cashflow never heard of Catan or care to investigate other board games.
The gameplay is ho-hum average but the lesson is great. I have yet to find any other game that drive the point on how to use leverage better than Cashflow. I have been on the lookout for games like Cashflow for years and have yet to find a replacement.
the99th, As you know markets
the99th,
As you know markets are cyclical, stock and real estate will rise again after the market correct the over optimism. Trading future/spot options is an advance investment skill and not for the masses.
New market instruments are being created all the time so yeah, buying a inverse 3x real estate index ETF on margin is an interesting choice. This means that when the when the real estate price drops, you earn three times the loss of the index times two because you bought two times the shares of the ETF's, on borrowed money (margin). We live in interesting times...
Not stupid, simply
Costik,
Not stupid, simply unsustanable for everyone - thus only being possible for a certain people as it utterly relies on others not doing it. Thus the promotion of castes, returning to the good old feudal system of lords and nobles. All hail them!
On the $200 thing, I'm inclined to think people who have shelled out $200 on it will give good reports of the game, simply because otherwise they'd feel really stupid for having spent $200 on it. It's a terrible cycle of confirmation bias, where the more someone spends on something, the more they are certain it's good. Didn't we have an article here awhile back where a guy raised the price on his crappy zits game and started making MORE sales?
I Still don't understand why there was a global financial crisis... ;)
~~~
Philosopher Gamer Blog
Driftwurld : My WIP browser game
Some more thoughts on the ethics of economics
"Real estate market, like other markets are cyclical and at some point will rise again."
And that's too generic of a prophecy to be useful. It'll probably come back, but not necessarily in our lifetime. But the real-estate you buy is not guaranteed to ever rise in value. You cannot treat it as some sort of golden investment. Truth is, you can't treat anything like a golden investment, even gold.
"Is managing multiple properties and/or businesses not work?"
No no, work is being done there. That whole "management" thing is definitely productive. Specifically it aids others in doing productive work and I'm not going to argue something crazy like the tertiary sector is all an illusion. But that's not what Kiyosaki is selling here. He doesn't even want to be the boss. He simply wants to own it and profit from it. Running a business is a lot of work, there's all sorts of crap you have to deal with. But the ultimate goal here is to escape that, to hire someone to do all that work for you.
You have a good point with the taxes, and from a mayor's view the business owners look like very important people who pay lots of taxes. But remove the owner, and without him the mid-boss, worker-drones, and sales reps are still there doing their thing. The only difference is a boat load of money that is either making more profit for the company, or each product is being sold for less. And just as much taxes are paid. Now, if the company just wasn't there, that's a business vacuum. An opportunity for someone to start up a company or for a competitor to expand.
"I pay rent to a sweet old lady. She offer a roof over my head at market rate. She is a business woman who provides living quarters for a price. Is this evil?"
You could argue that she's performing the function of dealing with taxes and utilities, property upkeep, sidewalk shoveling, etc. But let's argue fundamentals here. Let's pretend she makes you deal with all that, or she pays someone to deal with it.
Economically? YES, it's evil. She's not doing any productive work. Simply owning the thing isn't productive. Now, to my own set of morals, it's perfectly fine and sweet old ladies should be able to make a buck off of a spare room. I'm sorry if this strikes you as cruel, and it is, but in terms of economics, retirement is evil. The economy is a machine that keeps the nation going. It's fueled by greed and need and is lubricated with a monetary system. It's not a particularly good system and it certainly isn't nice, but it works and it's the best we've seen so far.
This whole "culture" thing with art, music, and games is simply a bribe to motivate the populace into seeing a reason to wake up and go into the salt mine or go babysit a gaggle of engineers or to spend all day plotting how to separate fools from their money.
I'm tempted to start a
I'm tempted to start a discussion on the circular logic of how "the economy" offers us products so we work more so there is a bigger "economy" so it can offer us more products. I have a beautiful example of how I don't own a car, because I neither need or desire one, so the entire small car industry is a waste of "economy" as far as I'm concerned. Also, note how I'm putting "economy" in quotation marks on purpose, because "economy" is not an entity, or a value, but a model. You set your economic goals outside of the "economy", and then you use "economy" as a model for finding the "best" (i.e. fastest, safest, most replicable, take your pick) way to achieve those goals.
However, I don't have time for any of that, because I need to leave home in 15 minutes so that I can waste some resources on an economically unproductive visit to my parents.
Instead, a simple observation. There are few things as economically efficient as building a house. Using a limited amount of resources, you create a new resource that lasts almost indefinitely (at least in countries where houses are built from brick and concrete, and not two-by-fours and cardboard). A house is indeed a useful resource, in that living under a roof, with access to safe personal space, warmth, water and energy, enables me to become much more active economically than if I lived in a street. And I would have to live in a street if the old lady decided to use her spare room as a closet instead of renting it out to me. I can't afford to buy my own house. The old lady essentially sells me a resource I need in exchange for a share of my economic output.
Also, the "economy" handles old ladies just fine. If I wanted to live off rent, I would have to buy five flats, and that would cost me some 0.7 million USD. So the barrier to entry is very high. But even if I had that much money, I would only break even after fourty years. That's just not a very good business. People who want to become rich, are better off investing in building new property. Old ladies with spare rooms act as an auxiliary economic mechanism: they provide a resource in those niches which real estate developers are unable or unwilling to handle.