How I teach my kids about life and money

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How I teach my kids about life and money

Post by Aitrus »

During these extended lockdowns, I thought I would share something that I do with my kids (one is currently 13, the other is 17). This makes the games more interesting to me as an adult, and educational for the kids.

My family and I play an expanded game we call "Real Life". We use the games of Life (L), Payday (PD), and The Stock Market Game (SMG). That last one is a rather unheard of game from the 1960s that I picked up from a yard sale for $2 about 10 years ago (https://boardgamegeek.com/boardgame/388 ... arket-game). In short, SMG is a stock trading game using a total of 8 stocks, share purchases, company stock splits and reverse splits, dividend payouts, etc. I would think that any similar game based on the stock market could be used to play Real Life, but the rules below are specific to the game I own.

A playthrough of Real Life can take anywhere from 3-16 hours to play, depending on how many players there are, if we use "full years" or not, or if choose to use just Life and Payday instead of all three games. All money and a few rules are shared among the games. Here’s how it goes:

We set up each game according to the rules. The turns work like this: It takes playing a full month on the PD board to earn a single roll on the L board, and prior to rolling on the PD board you roll on the SMG board. So SMG is a “daily” roll that happens prior to rolling in PD, and a playing a month in PD earns a move in L. To make the game longer (and more realistic), we sometimes require a full 12 months be played in PD to have a move in L – which makes for a better simulation.

Here are the rule changes and additions that are incorporated to make the games work together:

- All players have to manually keep track of their PD months, their income streams, the amounts earned from selling “deals”, the amounts they put into their retirement account and SMG brokerage account, and how much into each stock when purchased because taxes apply to investment earnings (see below).

- In PD, all “deals” have an extra two zeroes added to the prices if playing the 12-month version of the game, or one zero if playing the single-month version. Players are limited to selling a single “deal” once per month. The purchase value of any “deals” still held at the end of the game are added to the player’s net worth.

- In L, all later-stage Home prices have an extra zero, and the player must purchase one if playing the 12-month version of the game. Starter Home prices remain as they are. Starter Homes may be kept instead of sold in order to create an income stream equal to 2% of the home’s sale value, payable each PD month. Additional homes may be purchased to produce additional income streams. These are manually recorded, so the player can never run out of properties to purchase because the cards aren’t taken from the pile. Any loans taken out to purchase properties are subject to the PD loan interest rules below.

- Instead of using the starting money rules in SMG, a player waits until passing the first green “payday” space in L before being able to invest money on the SMG board. The player may to add any L or PD “payday” money to the SMG board. Money from L and PD can be added to SMG only when it is received, and this is the only way that money gets added to SMG.

- At the end of each PD month or L green “payday” square, the player is allowed to put money away into a checking account that earns 1% every PD month (or every 12 PD months if playing the longer version), into a retirement account, or a brokerage account that is used as the money for playing in SMG. The retirement account earns a static 7% every 12 PD months. Players may have money in both SMG and this retirement account. Money may be taken out of the savings account at any time. Money may be withdrawn from SMG and used in the other games at any time subject to the below rules regarding early withdrawal of funds. Money from the retirement account may never be removed except to pay off a debt, and is taxed at 10% when withdrawn.

- For PD and L, all income from paydays and the earnings on sold Deals is taxed at 20% (payable either at the time of earning, or delayed until the end of a “year” if playing the long version). SMG stock market earnings are taxed at 10% when calculated for net worth at Retirement in L, or 20% if money is withdrawn before Retirement and used in L or PD (money is withdrawn from principal last, and principal money is never taxed). Any money assigned to SMG but not actively invested in a stock sits in a "Money Market" account earning 1% every 12 PD months (in both versions of the game). Earnings on this money is not prorated if withdrawn – the account earns an automatic 1% (rounded up or down to the nearest dollar) on whatever amount is present at the end of the 12th month.

- In SMG, a player may choose to purchase an “Index” instead of individual stocks. The Index is either “Right-side” or “Left-side”, depending on the side of the board the player wishes to purchase. The Index share price is calculated as the sum of one share of all stocks in that Index at the current price. A player may purchase an Index share at any time he lands on any stock located within the respective Index, and receives one share of each stock in the Index when he does so. Multiple Index shares may be purchased at a time. The stocks are treated separately afterward for stock splits, sales of stock, etc. The Index option merely lets players purchase more than one stock at a time instead of being limited to purchasing a single stock at a time. The limit to purchasing a single share applies when on a Board Meeting space, meaning that only a single Index share can be purchased if the player lands on a square leading to the Board Meetings where stock splits occur.

- In SMG, a player may enter a Board Meeting only once every quarter (3 PD months) for each stock he owns instead of whenever he happens to pass by a Board Meeting entrance.

- A player may “Retire Early” in L any time after passing the option to purchase the second home. The first player who does gets all 3 Life tiles at the Manor plus a passive income stream equal to 2% of his second home’s value, paid at the end of each PD month. All other players who Retire Early just get a single tile from the pool. Any player who Retires Early can keep all properties and income streams, only selling them at the end of the game in order to tally the player’s total net worth. All other rules for the Manor apply (including the ones about getting one’s Life tiles stolen if the source pool is depleted). The player continues to roll in PD and SMG until the end of the game, but loses his monthly PD paycheck. Players who retire normally must sell their second home as per the L rules, and stop receiving their monthly PD paycheck, but continue to roll in both PD and SMG (making stock decisions, buying and selling deals, etc), and may keep any other passive income streams.

- The Long Term Investment option in L applies to all three games (all regular “daily” rolls in PD and SMG can earn money, but the extra rolls for certain PD squares are exempt), and this serves to simulate a “side hustle” or passive income stream that occasionally pays out. The payout is reduced to $1,000 per payout.

- Any loans incurred in L or PD are subject to monthly interest per the PD rules, but is reduced to 5% per month.

- If SMG isn't used during a playing of Real Life, then the retirement account and checking accounts remain in play, but the SMG brokerage and money market accounts disappear (thus allowing Real Life to be played with just Life and Payday).

- The game ends when the last player Retires in L. The winner is determined by net worth of all assets across all games.

We like playing this game a lot - especially my youngest daughter and myself. Nothing like spending quality time playing games with family, having snacks at hand, music, talking about whatever else comes to mind as we play.

And the educational lessons are priceless. It was a real pleasure to see the dismay on her face when she finally said one evening a few months ago "I hate paying the interest on this loan! I'm never getting one unless I have to!" This was made pretty plain when the $100k loan for going to college at the beginning of Life starts accruing interest before she even gets to her first paycheck. I think it's finally starting to sink in that it's better to be debt-free and invest than to spend, spend, spend - but loans are sometimes a necessary evil in order to get started, but best paid off quickly. The next things are to try to get her to understand passive income streams, compound interest, diversifying her money among varying investment options, and keeping enough liquidity on hand to both pay the bills and take advantage of opportunities that come along.
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ProduceMan
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Re: How I teach my kids about life and money

Post by ProduceMan »

In the 12 month version, how long can one round (at the 6 month day 1 time frame with 4 players), last?
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Re: How I teach my kids about life and money

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I'm not sure I understand what you mean by "at the 6 month day 1 time frame".

In the 12 month version, players make their first Life roll (deciding whether to go to college or to start a job right away), then they play PD and SMG for 12 PD months. After the completion of 12 PD months, the players can make their next roll on the Life board, then it's back to the PD and SMG boards for another 12 months of play.

Since everybody is familiar with the rules and there's only one Deal allowed to be sold each month, play moves pretty quickly (no dilly-dallying around, distractions are kept to a minimum, etc). It usually takes about 20 minutes to complete a 12-month progression early in the game with four people because nobody has much money, so no deals are made. Later on, this slows down a bit - sometimes a full 12 months can take 45+ minutes, depending on how much each player is doing and how much tracking and documentation is going on.

A full 12-month game with four people can take 16+ hours to play if everybody is playing hardball by thinking carefully about which deals to buy, building a lot of passive income streams, or being aggressive in the stock market. Sometimes everybody has retired early except one person because he needs the extra money that comes late in the Life game in order to have a shot at winning, so the game goes on longer than if everybody retired early.

When we have a game day like this we usually start early in the morning and finish around bedtime, or pause at lunch and pick it up the next day (we usually reserve this game for the weekends). A few times we set up the game and ran it over the course of a week, with a few rounds played every weeknight. It's an exhausting but fun experience.

For comparison, a 2-person game using just Life and Payday on a timescale of one PD month to 1 roll on the Life board can take as little as 3-4 hours.
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ProduceMan
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Re: How I teach my kids about life and money

Post by ProduceMan »

Sounds like fun, can you incorporate Monopoly in the mix
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Re: How I teach my kids about life and money

Post by ProduceMan »

So one round of play for each player is one month?
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Re: How I teach my kids about life and money

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We tried incorporating Monopoly into the mix once, but it didn't work out well. It might be possible, but I'm still working on that possibility.

Is one round of play for each player a month? No. Players take turns rolling on the Payday board as if you were playing just that board game. Prior to rolling to move forward on the calendar, the player would roll on the Stock Market board if they have money present in that game (the Stock Market game becomes part of their regular Payday turn of play).

If any player finishes their Payday month by landing on "Payday" (thus collecting $3,500, paying bills, calculating interest on loans, etc.), then we slide over to the Life board so that player can make their roll and play on the Life game. Then it's back to the Payday board for the next person's turn. I might finish my Payday month, make my move on the Life board, and it might be two weeks of Payday game play before you finish your month and make your move on the Life board.

So the iterations for you (PM) and I (A) would look like this if we were in the midgame of a single month-per-Life-roll game and using all three board games:

PM's turn: Rolls on SMG board, notes a minor change in stock values, but does nothing else. Moves over to the PD board and rolls (result is a 6, and so PM gets $1,000 from his Long Term Investment purchase on the Life game), moves forward 6 spaces, and gets a piece of mail directing him to the next Deal or Buyer space. He doesn't have a Deal right now and has some extra cash on hand over on the Life board, so he buys the deal. Since this wasn't the end of PM's current month, this ends PM's turn.

A's turn: Rolls on SMG board, entering the Board Meeting section (getting a 2:1 stock split). He collects his new shares, updates his stock tracking numbers, then moves to the PD board. Rolls on the PD board and lands on Payday (Rolled a 3, and gets $1,000 for his Long Term Investment choice on the Life game). A collects his $3,500 from Payday, collects $1,200 from a passive income stream from owning an extra house in Life, pays taxes on his income, and pays a couple of bills (he has no loans, so no interest is calculated). Since it's the end of A's month, we move over to the Life board. A rolls on the Life board (rolls a six, so PM gets another $1,000), and lands on a Lawsuit space (he also passed a green payday square along the way). PM has to pay up, and pulls the funds from his checking account to do so. After paying taxes on his Life paycheck, A decides to put a quarter of the remainder into his SMG brokerage account so he has some more funds to use in the stock market. The money is put directly into the Money Market fund until he has a chance to use it. Half of the Life paycheck gets added to the 7% retirement account, and the rest goes into the checking account. This ends A's turn, with his PD board piece back up at the beginning of the calendar.

PM's turn: Rolls on the SMG board...

See how the games intertwine and play off each other? It would look the same for the 12-month-per-Life-roll version, except that play on the Life board doesn't occur until PM or A completes 12 months on the Payday board (so each player also has to keep track of what month they're currently on) and taxes are only paid at the end of the 12th Payday month before moving to the Life board.
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Re: How I teach my kids about life and money

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Wow
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Re: How I teach my kids about life and money

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I employ a very KISS and practical method with mine.

When they come to me with a "request" or "demand" for funds for whatever reason, I make them go through this exercise:

1. I ask then if its a need or want? They need to articulate this answer accordingly; the same way a loan officer would want it on a loan application. Doing this educates them more than me about the true nature of their own request--and if it is even worth it.

2. If a "need" is established (school required, food, health, basic clothing, shelter, otherwise required) it is approved by wife and me.

3. If determined to be a "want", then ask them for what they are willing to exchange for it. IOW, no "want" is ever free in my house. They must identify the opportunity cost of that want, regardless of whether that is extracted from them (they "work" for it or pull from their savings) or the parents (whether we take the cost out of their college savings, vacation fund, household budgets, whatever). Money is a finite amount; in my house I will not purchase "wants" with CREDIT--no matter if the Fed does it all the time.

So regardless of whether we or the kids end up paying for it, they realize at the very onset, what the cost of that request is--and they NEVER OPERATE under the delusion that they are entitled to ANYTHING just because their parents and the household they live in have any special social, economic, political, racial, religious, or geographic privilege over others.

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Re: How I teach my kids about life and money

Post by jlozano042 »

Damn, I am in serious need of "up'ing my game" - no pun intended. :mrgreen:

Right now our game night is passing the VR headset and playing either "pistol whip" or "superhot".

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Re: How I teach my kids about life and money

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jlozano042 wrote:Damn, I am in serious need of "up'ing my game" - no pun intended. :mrgreen:

Right now our game night is passing the VR headset and playing either "pistol whip" or "superhot".
I found a video of Jay
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Aitrus
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Re: How I teach my kids about life and money

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bloobs wrote:I employ a very KISS and practical method with mine.

When they come to me with a "request" or "demand" for funds for whatever reason, I make them go through this exercise:

1. I ask then if its a need or want? They need to articulate this answer accordingly; the same way a loan officer would want it on a loan application. Doing this educates them more than me about the true nature of their own request--and if it is even worth it.

2. If a "need" is established (school required, food, health, basic clothing, shelter, otherwise required) it is approved by wife and me.

3. If determined to be a "want", then ask them for what they are willing to exchange for it. IOW, no "want" is ever free in my house. They must identify the opportunity cost of that want, regardless of whether that is extracted from them (they "work" for it or pull from their savings) or the parents (whether we take the cost out of their college savings, vacation fund, household budgets, whatever). Money is a finite amount; in my house I will not purchase "wants" with CREDIT--no matter if the Fed does it all the time.

So regardless of whether we or the kids end up paying for it, they realize at the very onset, what the cost of that request is--and they NEVER OPERATE under the delusion that they are entitled to ANYTHING just because their parents and the household they live in have any special social, economic, political, racial, religious, or geographic privilege over others.
Very nice approach. My kids get asked similar questions whenever they want something For example, my wife and I asked of our 17 year old daughter back when she was 14: is having a boyfriend right now a want, or a need? Is spending the summer studying and testing out of basic college courses to save money on tuition a need or would the desire to goof off for the summer instead be considered indulging a want? Along those same lines, the only time we buy anything for our kids is 1) if they need it or 2) if it's a present from us to them. Otherwise, like your kids, they have to do something to earn whatever it is they want.

My kids are getting the whole "needs vs wants" thing as well. The Real Life game is designed to teach them different ways of how to make their money work for them after they've answered the "need vs want" questions (and the costs associated with being in debt).
Seasonal Musings 2021: viewtopic.php?f=14&t=18757
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Re: How I teach my kids about life and money

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jlozano042 wrote:Damn, I am in serious need of "up'ing my game" - no pun intended. :mrgreen:

Right now our game night is passing the VR headset and playing either "pistol whip" or "superhot".
Haha! At least it's better than nothing. Spending time with family is always good.

Oh, you can still do quite a bit of teaching even on a basic level. Use chess to teach decision-making skills, to slow down and analyze a situation before acting on the first impulse that comes to mind. Use Japanese RPGs (think of the older Final Fantasy - style games) to teach thriftiness, resource management, and the idea of "the most bang for the buck". Use historical wargames to teach about the brutality of humanity (emphasize the causes of the wars, the deaths of millions on both sides, and the consequences for all involved afterward) to convey a sense of just how lucky they are to be alive in the here and now in a time of relative peace. Use games like Trivial Pursuit and Diplomacy to illustrate the value of reading a wide range of genres - including history - instead of just focusing on today's pop culture.

Or you can have some real fun and use a copy of The Royal Game of Ur, possibly the oldest known game to mankind, to introduce the idea of rudimentary probability analysis: https://www.youtube.com/watch?v=WZskjLq040I

Just don't irritate the Mesopotamian gods as you do so. :lol:
Seasonal Musings 2021: viewtopic.php?f=14&t=18757
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"It's not what happens to you, but how you react to it that matters" Epictetus

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Re: How I teach my kids about life and money

Post by mjedlin66 »

This is technical. Sounds fun. But crazy technical. I have never played Payday and never heard of the Stock Market Game.

When I have kids, I imagine I will teach them about money by making them run buggy websites that bring in no revenue (yet), complete with fun commentary from some guy called "crondanet".
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Re: How I teach my kids about life and money

Post by Aitrus »

Might have to have you over for a game of it sometime, MJ. Yes, it is technical, but it catches on quickly.
Seasonal Musings 2021: viewtopic.php?f=14&t=18757
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
"It's not what happens to you, but how you react to it that matters" Epictetus


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