The following story illustrates in a fun way what real estate has come to mean to my family and me. It also shows just how much the game Monopoly imitates real life real estate investing.
We were on a family vacation and were playing the board game Monopoly. There was my wife and I along with our three children who, at the time, were aged 14, 15 and 17. None of us had played for at least ten years.
The youngest was kicking butt and taking names. She owned almost everything, had homes everywhere, and was in the process of converting those homes into apartment buildings (basically the stage where I was at in real life). The middle child was getting very frustrated as he moved around the board, invariably landing on something that he either couldn’t buy or was owned by somebody else.
At one point, he snapped and said, “I hate this game.” I saw this as one of these teachable, parenting moments and said, “Hold on now. Who are you in this game right now?” He looked at me for a bit, not knowing what I was talking about. Finally, it dawned on him what I meant and he replied, “One of the renters that live in your buildings.”
“That is right,” I said. “And who is your sister?”
He thought for a moment and then said, “She is you.”
“You bet. So who would you rather be right now—you or her?”
“Her, of course, she has all the money.”
“That is right, but why does she have all the money?”
“Because every time I land on her properties, I have to pay her money and she has most of the properties.”
“Excellent,” I said. “And that is the way it works in the real world, too. If you own assets that earn you money on a regular basis, over time you can become quite wealthy.”
I was quite pleased with myself and we continued to play the game. Of course, teenagers being teenagers, they grumble and complain whenever I ask for help working in my real buildings. They also make fun of me every time I buy a new building and say that I am having a mid-life crisis (no blonds or Corvettes for me; only brick and mortar).
However, one day, as they get older, I hope they will see some wisdom in what the old man was trying to do. For you in your real estate investing life you can draw something from Monopoly as well. Owning a rental property and having tenants pay the expenses and pay down the mortgage is a really good retirement plan.