The Game of Rags to Riches

I was recently sent a copy of a new financial game and invited to review it. I'm not exactly a stranger to games, having played them for many years and even written about them. So I welcomed the chance to try a new game. It's called Rags to Riches and is put out by College Hill Games.

How it works
The game bears a number of similarities to that old standby, Monopoly. (Note that in today's world of modern board- and card-game enthusiasts, Monopoly is often scorned, because it takes too long to play and gets boring once a runaway winner begins emerging.)

The way you win is to be the first to build five luxury properties on your property. Each of these costs $1 million or $2 million, so your time in the game is spent accumulating as much wealth as you can, as quickly as you can. Your rags turn into riches as you buy and sell shares of stock in the five securities available: Biff's Burgers, Marvelous Motors, Terabyte Technologies, Glamour Goldmines, and "Penny Stock."

Stock prices are determined by rolls of dice, and call and put options are available, to apply leverage and to buy or sell at guaranteed good prices. Players can also raise cash by selling bonds, though they'll have to pony up twice what they borrowed by the time they make two more laps around the board.

The game is designed for two to four players, ages 8 and up.

Some drawbacks
As someone who's interested in games as well as financial matters, not to mention the teaching of financial concepts, I've spent some time thinking about how games might effectively teach people lessons about money. I have yet to come up with a brilliant way to do so. Just about every approach I consider has some drawbacks. "Rags to Riches" suffers the same fate. Here are a few of my concerns about it:

  • It promotes a short-term perspective, as you're rushing to accumulate as much cash as possible, as quickly as possible. There's generally little reward for hanging onto shares of stock for a long time -- though some shares do pay a sizable dividend and an effective strategy might be to grab as many of those shares as you can, and hang on.

  • It's somewhat misleading to financial newbies in some regards. For example, if you borrow money, you have to pay 100% interest within a short period of time. I hope that's not the kind of interest most of us borrowers will ever have to pay.

  • The game has a Monopoly-like feel and pace to it. This will be a drawback to some, but a plus to others. It involves rolling dice, moving around and around a board, and trying to make money. It can drag on a bit, like Monopoly, though if you're doing well, time may fly. (The game's makers estimate that a game will take two hours.)

  • The stock prices are set randomly, via dice rolls. This fosters a view of investing as something close to gambling, which is not ideal. It's true that there are folks out there who gamble on stocks -- such as speculators who make guesses about short-term movements and ill-informed "investors" who just don't understand what they're doing. But I've yet to see stock gamblers getting rich with any consistency. All the great examples of successful investing I've seen require patience, information, discipline, and prudence.

Of course, patience, information, discipline, and prudence don't sound like the makings of a fun game, do they? If this (or any) game were 100% realistic and 100% Foolish, players might end up having to play for 30 years. Yikes.

Why it's good
There is some good news, though. Here's what I liked about the game:

  • It's a bit more realistic and comprehensive than some financial games. It incorporates things like call and put options and bonds along with stock trading. It permits trading of stocks between players, which is pretty much what our stock market does, too.

  • It conveys a few subtle lessons in the prices and payoffs for certain stocks shares. Stocks in the less-exciting industries of food and cars sport a relatively narrow price spread, with the top price being four times the bottom price. (However, the generic "Penny Stock" shares also have a four-fold price difference, which seems unrealistic since penny stocks tend to be more volatile than blue chips.) But the high-tech and gold-mine stocks have top prices that are fully 12 times greater than their lowest prices.

  • Dividends have also been thought through well. The penny stock shares pay no dividends at all, while the stocks in the more volatile industries pay paltry dividends and the stocks in established industries pay generous dividends.

  • The game permits different playing styles. You can take a conservative approach, trying not to spend more than you have and waiting for dividend income, or you can play more aggressively, borrowing heavily via bonds and hoping the dice don't roll the wrong way.

So the game does have its merits, and it might be effective in helping youngsters (or adults) learn some elements of the stock market and business world. The best way for anyone to learn via a game like this, though, might be to have a more seasoned investor playing along, pointing out what's realistic and what isn't.

Playing with the likes of Marvelous Motors and Biff's Burgers, new investors might imagine one day filling their portfolios with shares of Wal-Mart (NYSE: WMT  ) , Home Depot (NYSE: HD  ) , Johnson & Johnson (NYSE: JNJ  ) , Microsoft (Nasdaq: MSFT  ) , and Starbucks (Nasdaq: SBUX  ) . If a game like this gets someone you know more interested in investing, then it's likely well worth the time and money invested in it.

More fish in the sea
Permit me to mention some other games, because there are a lot of nifty new games out there -- don't think that game inventions happen only every 50 years. I went into much more detail on modern games in general and certain games in particular in this previous article, but since then some new financially oriented games have come out, such as Moderne Zeiten, Wheedle, Industria, The Kids of Catan and I'm the Boss! Also, I should note that Union Pacific, an excellent, out-of-print stock-investing game with a railroad theme, is currently on sale at Funagain.com, a terrific game retailer. (Other retailers that have served me well are GameSurplus.com and BoulderGames.)

Note that many of these new kinds of games can teach a lot about investing without seeming to at all. In other words, they're all about fun, not about teaching and learning. They may help you hone your resource-management skills, for example, which might help you think through allocating your money more effectively. Or they can just reinforce mathematical thinking, which always comes in handy in the financial world.

Get many more opinions about games on our Card and Board Games discussion board. On that board, I've posted a FAQ (frequently asked questions, with answers) that lists scores of resources on all kinds of games -- such as rules, top-rated games, where to play games online, and more.

On a related note, a contest!
Finally, if you'd like to get your teenagers more interested in investing, point them to our rich Teens and Their Money area, where, among other things, they can learn how they might win $1,000 from us in a contest that ends soon.

Selena Maranjian is a bit embarrassed by how many games she owns. She also owns shares of Johnson & Johnson and Microsoft.For more about Selena, view her bio and her profile. You might also be interested in these books she has written or co-written:The Motley Fool Money GuideandThe Motley Fool Investment Guide for Teens. The Motley Fool is Fools writing for Fools.


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