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Mr. Monopoly Got It Wrong: Cooperation Makes More Money Than Competition
Monopoly is a zero sum game based on competition. Since the money supply cannot increase, the players can win only by taking money from other players. The fundamental belief behind Monopoly is lack of money. This means that the only way to get more money is to take it away from others.
This zero sum competitive game reflects the economic realities of the Great Depression. While thousands stood in breadlines, a handful made fortunes. For one to player to win, the others must lose.
The rules of the Monopoly prohibit partnership. You cannot create joint ventures. You cannot loan money to another player. You cannot borrow money from another player.
The psychological effect of playing this highly competitive game is that you are a solo player doing whatever you can to force the other players to go bankrupt. The last thing you want to do is to help someone else stay in the game because that person might go on to drive you out of the game.
As an economic model for creating wealth, Monopoly teaches that competition is the way of the world. It reinforces social models based on competition, and the idea that success is a lonely climb over the heads of others.
The belief that success means competition reinforces a whole array of social models and beliefs about the survival of the fittest and the law of the jungle where only the strong prevail. You can see the same belief behind the American mythology of the self-made man who pulls himself up by his bootstraps.
Even Abraham Maslows hierarchy of needs is a model of the individual striving to succeed as an individual. It is all part of the belief that success goes to the individual who wins the competition.
This kind of imagery is deeply embedded in our consciousness about what it takes to make money and what it takes to succeed in business. Monopoly simply reinforces the fundamental belief that the road to success is paved with the bodies of your competitors.
As a success model, what is the effect of a game based on competition for a limited money supply You dont have to look any further than the statistic that 96% of the population will reach 65 without enough money to be financially self-sufficient. Instead of congratulating the 4% who somehow manage to create financial freedom for themselves in this economic system, you need to ask, What is wrong with the game Why do so many lose
The short answer is that our economic models teach competition for limited resources as the foundation of wealth. The model itself demands that almost everyone must end the game broke.
What happens when you attempt to create wealth in business according to Monopoly Money Rules Its a highly competitive game and a lonely struggle. You use your own money and do it alone. Will you succeed Maybe. You might be one of the lucky few who manage to do it all yourself. More likely, you will end up as one of the casualties of those who tried to start a business but never made enough money to succeed.
As a model for creating wealth, Monopoly is stuck in the mindset and money beliefs of the Great Depression. In the Monopoly game, the winner amasses money but does nothing to create money through transactions.
The Great Depression ended more than sixty years ago. Its time for a new game with a new understanding of money. The fact is, youll make more money in transactions than you will in takeovers. Mr. Monopoly had it wrong when he thought that winning meant driving competitors out of business. Yes, I know. The business world is still full of black knights and hostile takeovers. And sometimes the worst people seem to win.
When you take off the Depression era Mr. Monopoly glasses, you can see a new vision of money and business. Money is not currency. Money is an idea, and the only limits to money are the limits of your vision. With this vision, youll see that you will make more money in transactions than takeovers. In this era, the most enlightened business people understand that you will make more money in joint ventures with others than you will by competing against them.
Copyright 2006 Debt or Alive, Inc
Kalinda Rose Stevenson, Ph.D.Author of No Money Limits For Real Estate Investors: Are Monoply Money Rules Putting A Lid On Your Real Estate SuccessDiscover The Real Estate Money Secret Hidden in the Monopoly Game.
First of All, Know Thyself
One of the most important elements of success in trading (and life in general) is knowing yourself. If you do not understand how you tick, you will never be truly prepared for the demands of trading, and likely your performance will suffer as a result.
Let me use myself as an example.
I am what might be considered project oriented. By that I mean I like to move from one thing to the next always have something upon which to focus my attention. As my friends and colleagues can attest, once I complete a project - and sometimes even before I do - my thoughts shift to the next one. I actually get antsy if I have nothing lined-up. Predictably, this is reflected in my trading.
We can actually think of trading as a series of projects. Each position one takes on is a new project which incorporates analysis of some sort (automated or otherwise) and trade decision-making. When a position is closed out, it is like wrapping up a project. Its over and done - time to move on to the next thing.
Theres a little problem with that, though. This kind of project approach, in the case of someone like me, can lead to overtrading. This isnt the kind of overtrading which is referred to when one speaks of taking on positions which are too large, though. Rather, I am speaking of trading too frequently. In my case, when I close a trade I find myself immediately eager to open a new one. It doesnt matter whether I made or lost money on that first trade. Because of my need to have a project going, my psychological pull is toward finding a new trade to make. (Note: I do not consider this in my case to be like the fix trading provides as an intermittent feedback mechanism, like gambling.)
This little personality trait of mine is something I figured out a while back when I realized that I am most comfortable when I have an active position in the market.. It doesnt matter how large or small that trade is as long as I can check on it periodically and feel like Im involved. Knowing this, I take two approaches to avoid the overtrading problem.
The first thing I do is trade longer-term. By doing so, I give myself the opportunity to take on long projects. I often have trades with durations of weeks or even months. These arent all my trades, mind you. I do trade short-term at times, but my schedule is such that longer-term position trading tends to fit best most of the year.
When trading shorter-term, I use a second approach to combat the project itch. Specifically, I try to step away from the market for a while following the completion of a trade. It lets me clear out the emotional residue of finishing a project and come back at it fresh. That can quite often make the difference between taking impulsive trades and being properly selective based on my analytic methods.
Of course, this is just one example of the sort of psychological hurdles which come up in trading. We all have patterns of behavior which are based in our personal lives that can quite easily carry in to trading, positively or negatively. Brett Steenbargers outstanding book The Psychology of Trading provides an excellent discussion of how this can happen, and ways we can overcome the problematic ones. The primary point is that we need to be able to look at ourselves like an outside observer. In that way we can get to know ourselves, and thats at least half the battle
John Forman is author of (Wiley - April 2006), and a near 20 year veteran of trading and analyzing the markets. Visit to learn more about his trading, market analysis, and research activities and to find out how you can get a copy of Andurils free report on what every trader and investor needs to succeed.
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