Chapter 4 : The Cash Flow Game

I want to share an interesting game which I learned about during my journey of discovering the tree of wealth, this game is called the Cash Flow game. This board game is an educational tool created by Robert Kiyosaki (author of Rich Dad Poor Dad), which aims to teach players the concepts of investing by having their money work for them in a risk free setting. It also simultaneously increase their financial literacy and stressing the importance of accountability.

When I first played the Cash Flow game, it gave me a glimpse realization on the reality of my current career life and financial situation. After playing a few times, I finally understood what was missing throughout my whole career at that time and the financial failures I got myself into over the years. The board game is really an amazing education tool and suitable for anyone who wishes to start out on their path to financial freedom. You can get the web version of the Cash Flow game from the Rich Dad website http://www.richdad.com/.

The Cash Flow games quite resemblance the similarities in reality which most of us had experiences throughout our whole life. It always goes like this, everyone will have to go to school from childhood until university or college so we can learn the skills to get a job which pays us stable income to live in the society. Then we will start to owed house loan, school loan, car loan and credit card loan kind of debts to deal with, the debts which we may not able to pay off until the end of our life. This simulation of the Cash Flow games gets the player to realize these nature facts of life, so they can learn and make changes to their life with better financial terms.

There are two type of Cash Flow games in the Rich Dad series, the Cash Flow 101 and Cash Flow 202. The Cash Flow 101 game is mainly for beginner players who just started out playing and wishes to learn about the financial education, where as Cash Flow 202 game is a further upgrades to the original game where the players can learn more about technical investing skills. Basically these two version of games are mostly similar in game play on the Rat Race track while the differences will be on the difficulty of getting to the Fast Track by the challenges presented along the track.

In general brief, the rules for the Cash Flow game is as following:

• A maximum of 6 players can play at one game session and all them will be assigned different profession such as doctor, lawyer, police officer, pilot, teacher, janitor and web designer. Each profession has it's differences in terms of salary income and expenses, as well the starting assets and liabilities.
• Each player will start on the Rat Race track, which is a round board game where they will repeatedly go through by throwing dices in turns. All of them will start with two dices unless they contribute certain cash from their income on the Charity box, they will get to throw three dices for few rounds.
• On the Rat Race track, the players will get chance to step on the boxes which they will need to choose between the Small Deals or Big Deals. Basically Small Deals are deals under $6,000 in cash payment while Big Deals are deals above the $6,000 in cash payment. The players will have to choose wisely accordingly to their financial situation as well affordability.
• For Cash Flow 202, the chance boxes will present Cash Flow deals and Capital Gain deals for the players to choose. Basically Cash Flow deals will get players to invest in passive income type of deals such as rental property while the Capital Gains will let the players invest in certain financial instruments which give capital gains such as stocks and options.
• When the players get to choose certain deals they will have to finance the outstanding payment with bank loans. This will gets them to be familiar with the definition of asset, liability, income and expenses column from the process.
• Along the track, they will also get to land on expenses boxes such as Doodads which required them to pay certain cash from their savings. This could be an education for players to understand about what stuff are categorize as Doodads. For you information, Doodads are stuff that we bought in reality which we really don't need it and waste of money.
• The players objective is to get their Passive Income higher than their Expenses so they can advance to the Fast Track. They also need to closely monitor their Expenses and Cash On Hand so it won't get out of hand, if not they will face Bankruptcy. In Bankruptcy, the players will have to dispose all their assets in order to pay off their outstanding debts. If fail to so, they will force to leave the game prematurely.
• Once the players get to the Fast Track, they will be presented with the easy way of game play where they get to choose investment in multi corporation deals to get cash flow or spend the cash on luxury leisure travel deals. The ultimate goal is for them to get their Daily Cash Flow income higher than their Daily Cash Flow Goal.
• During the Fast Track the players will get to learn how their cash on hand can be taken away easily by Taxes and Law Suits. This quite resemblance the routine in reality where the rich people will always have to find ways to protect their wealth from the clutches of government and lawful events.

The game play are quite fixed, but the strategy every players can be vary according to individuals. It is highly recommended by Robert Kiyosaki for the players to play this game as many times as possible so they can discover different ways to win the game of life. I had played so many times ever since until I realized that there are different strategies which I can apply to win this game, and these are very useful strategies in the real world too.

To share out few of my strategies are as following:

• I will try to buy the first few properties from the Small Deals as early as possible, without worrying the small passive income it provided. Once I sell these properties off in the mid of the game, I can acquired an amount of cash from the capital gains generated from these sales. The cash collected can be quite substantial for me to invest in bigger deals which yield higher passive income, this allows me to get to the Fast Track effectively within little of time.
• My second strategy is to get the maximum bank loan at the early stages as possible, so I will have certain amount of cash on hand to allow me to invest in Small Deals faster without having to go through few round of turns. I can settle the debts off very fast once I sell off these properties, allowing me to acquire Big Deals faster and within shorter amount of time. This strategy is rather riskier and can go bankrupt if I get landed on huge expenses or Doodads.

Both strategies requires me to get Capital Gains in a short amount of time, so I would have substantial cash on hand to invest in Cash Flow deals which will provide the Passive Income I needed to win the game. In reality, the Passive Income is use by the rich people to get financial freedom and never to work for a job ever again. But for a beginner investor just starting out, we are always face with lacking resources such as cash on hand. So what I did was to focus on getting capital gains first to acquire the cash needed for me to invest in bigger and more efficient passive income deals. For and example, a $200,000 capital gains from each property is very good at the beginning of wealth accumulation. But once I have acquired more than $1,000,000 that amount of capital gains will yield lesser efficiency at increasing my wealth. At this stage, Passive Income is more useful to achieve my financial freedom.

Again I wish to stretch out, the Cash Flow game is really a very good financial education tool for anyone who wants to increase their financial literacy and improving their life. I would also highly recommend this board game to anyone who wishes to pursue their tree of wealth as it did for me to learn about wealth creation. For me, I am continuously on the path of learning and improving the technique to acquire wealth.