I have a chance to try on Cashflow 101 board game today. The concept of the game is easy and straight forward - to make enough passive income streams to cover the expense then you will proceed on the fast track and thus winning the game. To make passive income stream, you could choose to invest on rental properties or buy existing money making business, low-yield stock dividend, etc.
The rule may sound easy, the game is created in a way that you have randomized chance to run into all kind of troubles and good opportunities, just like in real life. If you hit on opportunity it could be either good or those not too good one, the choice is yours to make whether to take the opportunity.
There are times when you need to evaluate the cost of opportunity such as trading off existing cashflow for capital appreciation and reinvest it into a higher cashflow investment. If that is not done properly, your net cash flow might end up status quo or going south. There was once during the game play i got hasty, and half I was also in an experimental mood, I took on an investment opportunity to own a business that i couldn’t afford without borrow a huge bank loan plus mortgage. Even though my passive income increases tremendously after that, I suffered from over expense from paying the bank loan and miscellaneous expenses like children expense. My total income was not enough to cover total monthly expenses and it went negative subsequently. I have to declare bankruptcy.
Once recovered from bankruptcy it became extremely difficult to accumulate wealth, my net cash flow became so little because I sold nearly all my rental income assets to pay off debt. I accumulate so little month over the month. I couldn’t invest or buy share and yet i have to pay back leftover debts little by little. Worse still, several times i hit the Doodad (Events where spending in unnecessary stuffs is unavoidable; such as big plasma tv, expensive dinner, etc) and have to use my credit card. By using the credit card it increased my monthly expense. All these scenarios precisely tell you; when you have no money, when you are in deep debt and endless troubles, life can become worse. It won’t care who you are or how hard you work. That round i ended out of the game.
In real life, that could be a real disaster – from one mistake it becomes chain reacting to other bigger problems down the road.