I went to play the game “Cash Flow 101” the other night. It’s Robert Kiyosaki’s game that is designed to teach you how to “get out of the rat race” which means that your passive income is greater or equal to your expenses. There is an online version but I couldn’t get it to load so I’m not going to bother linking to it. I found my in-person group on meetup.com.
Let’s talk about “passive income” for a second. Passive income is money that comes in that you didn’t have to work for. A good example of this is income from a rental property. If you had enough rental properties that the income from them covered your daily living expense you would be considered out of the rat race.
On the game board there is an inner track and an outer track. The inner track is the “rat race” and that’s where you start. On this track you try to build up passive income buy making deals.
You start out by randomly picking a career card and this card tells you what your income and expense are. Income minus expenses gives you your monthly cash flow. You can save up your monthly cash flow for when you land on an “opportunity” space on the board and get to draw an “opportunity card”. Opportunity cards can be big deals or little deals and are usually either a chance to buy stock or real estate.
The stock cards give you a chance to buy a specific stock at the price stated on the card. Everyone else in the game has the chance to sell that specific stock (if they own it) at the same stated price. The real estate cards describe a property and include the needed down payment and the cash flow that the property will generate. If you don’t have enough money saved up from your paychecks to make the deal you can borrow money from the bank… at 10% per month interest. (Yikes!)
You go around taking your turn, getting paychecks, and making deals until finally the deals you made generate enough passive income to cover your expenses and you are out of the rat race.
I never got out of the rat race so I don’t know what the outer track is like… :)
Why didn’t I get out of the rat race? Well, for one thing it was my first time playing so I was playing it too conservatively. Secondly, the game is very long (think Monopoly) here and we only played for about an hour.
What I Liked
I think the game is well set up and it was fun to play. I liked that borrowing money was expensive and you start out with debts which you can pay off to have less expenses. Paying off debt both lowers the amount of passive income you need to get out of the rat race AND increases the effect of getting your paycheck. (Just like in real life!) There are also cards that make you purchase things. Sometimes small things like a coffee… sometimes big things, like a boat! I liked this unknown effect of having to spend money because real life has risks and we don’t always get to choose where we spend our money. We can have a carefully laid out plan and have it get thrown off track by unexpected expense.
What I Didn’t Like
I was wishing paying off the your debts made a bigger impact. For the vast majority of people the reason they have trouble building wealth is because of their debts. But I understand that time spent paying down debt would only delay the point of the game, which is to teach people to get into the mindset of building passive income and doing deals.
Which leads me to the next point… the game is so long! Like I said, we played for over an hour and none of us were even close to being out of the rat race. One of the reasons it’s so long is the accounting part takes quite awhile. When you do a deal you have to calculate how that affects your cash flow which can take a while. Sometimes even deciding on a deal takes a long time because there is a lot that goes into them. You have to figure out where the deal will leave you cash flow wise and that can take a while. I don’t know how to make this part go faster.
Overall I liked the game. It was fun and the principals were good.
Has anyone else played this game? What were your thoughts?