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If you've ever read the book Rich Dad, Poor Dad written by Robert Kiyosaki (which I highly recommend, by the way), you have probably heard of the Cashflow games that were developed by the author to help children and adults understand the difference between assets and liabilities, and to help them understand balance sheets.
Guys, let me tell you that they work.
I'll also tell you right up front that these babies can be pricey. (We purchased the adult version and were gifted the kiddie version by my husband's employer.) But they are also pretty cool.
Cashflow 101 is a game where everyone starts in the "Rat Race" and has a salary and monthly obligations. As the game is played, you are given the chance to buy various investments in the form of real estate, businesses and stocks. These all have different price points and returns. You get to decide if the deal is a good one or not, and act accordingly. You can decide if you want to pay cash, pass up the deal, or take a loan out to invest in it.
You also are forced to buy "Doo-dads" (ex: wants instead of needs such as TVs, boats, shopping sprees using credit cards) that take away from your salary and will sometimes put you in debt.
Throughout the game, you have to keep track of all of your purchases, and assets and liabilities on a balance sheet. Once you achieve financial independence (where your assets can replace your monthly income), you get out of the rat race and can work towards your dream of world peace, a mansion in the Caribbean, or whatever.
Parents, listen up: it is PRICELESS to hear your children say, "Oh, no! I have to buy a tv! Why on earth would I want to buy a big screen tv? That's so dumb. I need to buy an investment instead!"
And it gets even better when you are at the store in real life, and they want to buy something, or want you to. All you have to say is, "Is this a Doo-dad?", and they will immediately stop. You can also help them to see assets as they exist in real life.
It's a beautiful thing.
This actually works well on me, too. I need to play Cashflow more often than I do, because I watch my purchases much more carefully after I play.
*Parent Tip*: I'm not going to lie: the learning curve in this game can be kind of steep if you or your kids are not used to filling out balance sheets. It can feel cumbersome...but it gets easier the more familiar you become with the process. Don't give up!
Cashflow for Kids works in the same way, in just a more simplified version. I played this with my 6 and 8 year olds and they caught on pretty well. They needed a little help, but it was pretty age appropriate for them, though it is a bit juvenile for my 12 yr old. There is no balance sheet for them to fill out but instead, there is an image board where they put different tokens, etc. to visually tell how they are doing with their assets and liabilities. There is very little learning curve for this version.
In a world where inflation and prices are rising, but salaries are stagnant; where many jobs are being outsourced overseas or replaced by machines, often families can not keep up. Finances are getting tighter and wise money management is arguably more important than ever.
If our children can learn these important lessons, just think of the options that will be open to them: buying assets NOW (in our family we call assets "money making machines")- whether that is a lawn mower to start a lawn care company after school, a cotton candy machine to rent out for parties, or even a down payment for a rental property...if our kids can learn to recognize "big deals", "small deals" and "Doo-dads" when they are young, we are definitely blessing them for the rest of their lives.
And this game does a waaay better job of doing this than a textbook!
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