Ali Ata: 4 Lessons Monopoly Teaches You about Real Estate Investing

You’ve probably tried your hand at real estate investing without even knowing it. Real estate investing guru Ali Ata says Monopoly (yes, that Monopoly) isn’t just fun, it’s also a great practice for actual, real-life investing. It can teach you several lessons that will come in really handy when you start growing real money through real estate properties.

Playing Monopoly can teach you to:

#1. Always have cash ready

You can’t win in Monopoly without cash on hand. If you burn through your finances, you won’t have enough to pay for taxes, penalties, and other obligations. You may have to start selling your properties at a discount just to have enough cash. Once this happens, chances are that you’ll declare bankruptcy before long.

This actually happened during the Great Recession. People became so addicted to credit that when the housing market collapsed, many found themselves without any cash on hand. Many ended up selling their homes at much lower prices just to have cash or pay their mortgage.

#2. Exercise patience at all times

A single game in Monopoly can last hours—it’s practically impossible to win within a few turns. Similarly, earning from real estate can take a much longer time than other types of investment. Ali Ata stresses that you may have to wait years for your property to appreciate or generate enough revenue just to recoup your initial investment.

#3. Be mindful of cash flow

In Monopoly, the last person with money wins. If you buy properties for their price or the prestige of owning them, you might go bankrupt quickly. Focus on properties that are sure to generate income for you.

#4. Be careful where you put your money

The best properties in Monopoly aren’t the ones that cost the most. Rather, it’s the four railroads, thanks to the amount of cash flow they generate. Even though areas like Boardwalk have the biggest payouts, the price of maintaining them can end up being a severe blow on your finances.

Additionally, think twice before putting all your money on putting hotels on just one area of the board. After all, the chances of anyone landing on your hotels are slim, so you’ll end up spending on buildings without getting any money back to recoup your expense. Instead of putting your eggs in one basket, try to diversify when you can.

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