The resonance of monopoly (3-2): Selecting the right strategy

Monopoly

Monopoly

In the previous posts, we have seen through the history of monopoly game and the source of its popularity. We also see how monopoly is not simply a game of chance. For this blog post, we will answer the question of the previous post: why shouldn’t we choose to invest in Red and Yellow block, while they are great in term of ROI (Return on investment) ?

Every financiers love ROI, not? The number provides a way to compare the benefit we can yield from different projects, given that we don’t have enough money to invest all of them. We need to figure out how, with our limited resource, we get the best result we can get.

But ROI doesn’t mean everything. There are two other key issues here: timing and resources.

We all love ROI, but it doesn’t tell how fast the money will come back to you after your investment. And you need money to invest in other properties and to pay your own rents, no?

Capital Turnover

In the beginning of the game, you have a certain amount of capital, but far from enough. Usually, I will need to calculate very carefully when I have bought my first 7 – 8 properties. You don’t want to over-spend too much that later you need to sell houses to pay for lunch.

And that comes the equation. Providing that the amount of money to buy the Red/Yellow block is fairly high, it is not a good use of money to pursue a domination on Red block. Chance are, if you managed to own these properties, you will run out of money. A property block without houses is like a tiger without teeth: in fact, you can’t sustain a steady income in any property block without houses.

For the Orange block, though its ROI is somewhat less, it’s the block with the highest chance for players to land on. What does that mean? That means it will take less time to recover your investment, and later you will have money to build houses or sustain your business else where, even buying more blocks!