ROUND FIFTEEN

The Thimble escaped from Jail with a roll of 5,5 and landed safely
on Free Parking, having leapt over the rent nightmare posed by the
Oranges; the Battleship shook his head in disbelief. But now it was
the Racecar’s turn and he had no such luck. His roll of 8 plus Mr. M
landed him first on North Carolina, and then on Pennsylvania
Avenue. His combined rent due was greater than his assets of $774
after selling back to the bank his remaining four houses. He went
bankrupt to the Thimble.
Would you have managed your cash any differently? Where do
you think the Racecar went astray?
The Thimble gained a new lease on life. His assets consisted of
more than $400 in cash and $2500 in properties and buildings.
The Battleship rolled a 7 and landed on Chance, where he
incurred a nasty $200 penalty.
The Iron came to rest on his own property—Kentucky—and he
decided to remortgage Waterworks in order to add another house on
Illinois. It was a calculated gamble, because ahead of him loomed
the Thimble’s dangerous Greens.
 ROUND SIXTEEN
The Thimble mortgaged two of the Purples gained from the
Racecar’s bankruptcy and used the proceeds to help finance two
more houses on the Greens. He rolled and moved to the Short Line,
where he paid $100 to the Iron (who used the cash to help buy yet
another house on Kentucky). The Battleship rolled 3,4 plus the Bus
and elected to move to Free Parking and temporary safety.
 The Iron’s housing gambit did not pay off, because he rolled 5
plus Mr. M. He landed first on Atlantic (mortgaged) and then on
Pacific, where a $390 rent awaited him. He had to mortgage two of
his rails (B&O and Short Line) to pay the bill. But he did avoid the
need to tear down houses.
The Iron still had the highest net worth, but do you think his
investments had enough immediate rent power to offset his low-cash
position?
The Thimble decided to mortgage the last operating Railroad, the
Reading. Thus all the trains lay dormant, their rent power gone for
the moment.
 ROUNDS SEVENTEEN TO NINETEEN
At this moment, the game was in flux; it could tilt in favor of any of
its three remaining players. These three rounds were played quickly,
and with impact.
The Thimble collected $200 for passing GO, paid a rent of $200
on St. James to the Battleship (who lamented not having a third
house on its Orange band), drew a Get Out of Jail Free card (to the
delight of the audience), passed GO again (+$200), and paid another
$70 rent on St. James.
The Battleship landed on New York (his own property), but on
the next round Mr. Monopoly took him to Pacific and a $390 rent.
He gritted his teeth and was forced to sell three houses from his
precious Oranges and watch helplessly as the Thimble added a house
on Pacific with the money he handed over. On his next turn he
passed GO and collected $200.
The Iron began by passing GO (+$200), added a house on Illinois,
and unmortgaged the B&O. On the next round, a double 4s plus 3 on
the Speed Die landed him on mortgaged St. Charles. A roll of 4 took
him to St. James, where the Battleship once more collected $70. The
Iron reluctantly mortgaged B&O once again. On his next turn he
rolled 4 once more and came to rest on Free Parking.
 ROUND TWENTY
The Thimble rolled 4,5 plus the Bus and moved to (mortgaged)
B&O. He calmly purchased two more houses on his Greens and
awaited his opponents’ next moves.
The Battleship rolled 7 plus Mr. M. This took him first to the
Pennsylvania Railroad (mortgaged), then to Kentucky, where he had
to pay a $700 rent to the Iron. With minimal cash on hand, he had to
sell all five remaining houses from his Oranges and mortgage both
St. James and Tennessee.
The Iron rolled an 11 and landed on Pacific, where a $900 rent
claimed his cash, along with two houses on his Reds.

ROUND TWENTY-ONE
The Thimble began by unmortgaging St. Charles and States for
$154. He rolled 8, landed on Community Chest, and received $10 for
services rendered.
The Battleship, who was one fortunate throw from taking control
of the game, instead found himself destitute. His unlucky roll of 10
plus Mr. M landed him on both Pacific and North Carolina. He
couldn’t even cover the debt on Pacific and was forced to go
bankrupt to the Thimble, transferring his $124 in cash and $945 in
properties. The Thimble, after paying the interest on the mortgaged
properties he gained, mortgaged New York and bought another
house on Pacific.
The Iron rolled a 6, easily skirting danger, and landed on
mortgaged Park Place. He was momentarily safe, but faced a
formidable road ahead. He desperately needed the Thimble to incur a
big rent on one of his Reds in order to restore a semblance of parity,
before the Greens could decimate his finances.
 ROUND TWENTY-TWO
The Thimble rolled a 9, landed on Community Chest, collected $200
for passing GO, and collected another $100 from the bank thanks to
the card drawn.
The Iron’s hope ended quickly when he rolled an 8 plus Mr. M,
which carried him to Pacific and North Carolina, revisiting the
Battleship’s prior road to ruin. He graciously conceded the game and
went bankrupt to the Thimble. And so the dilemma of
overdiversification resolved itself unfavorably for the Iron.
Rick Marinaccio, who possessed a handsome $7610 in net worth
at game’s end, defeated Tim Vandenberg and became the 2009
United States Monopoly champion.

Let’s go back to your real-world holdings. It is a good idea to spread

your investments across a variety of asset classes with low
correlation to each other. This is because different types of
investments tend to move up and down at different rates and at
different times. Diversified holdings usually do not march in unison.
Mixing things up in your portfolio cushions against sudden drops.
(Haven’t we experienced more than our fair share in the last few
years?) Your total net return should be better as a result. It may not
be the best, but it won’t be the worst and, more important, will likely
be positive. However, if you keep buying stocks or assets similar to
what you already own (another bank, another energy fund, another
REIT, another precious metals ETF), you won’t be helping yourself
to cushion a potential blow. This is because by so investing, you will
mimic the ups and downs of your current holdings. I suggest you do
yourself a favor and keep it simple. After diversifying sensibly,
continue to add to what you have, according to principles we’ve
discussed previously.
 10

THE CARDS
EXPECTING THE EXPECTED

They believed Daimler was a fortune hunter, but when he picked “Bank Error in Your
Favor—Collect Two Hundred Dollars,” he used the capital to start an Internet company,
for which he was offered six billion dollars, although he refused to sell unless the buyer
threw in at least one “Get Out of Jail Free” card.
—WOODY ALLEN, COMEDIAN AND AUTHOR, NEW YORKER, JANUARY 24, 2011

While the likely outcome of each roll of the dice is a probability,

there is also a category of random game events that provide certainty,
much like the inevitability of death and taxes. I’m referring, of
course, to the card decks and their messages. There are 16 such cards
in the Chance deck and the same number in the Community Chest
deck. All 32 of them will enter play if the Chance and Community
Chest spaces are landed on often enough. And since the decks are not
shuffled, the sequence will repeat thereafter.
It’s been said that one who claims never to have had a chance
never took a chance. Well, it’s pretty certain you’ll get your share of
Chance (and Community Chest) while playing Monopoly. They are
to be expected.
 “Expecting the expected” is the philosophy applicable to
contending with these cards in the game and, more important,
preparing for the inevitable in real life. The likelihood of a particular
certain event in life increases with each passing day. Likewise, the
odds of a particular card being drawn increases the longer it remains
in the deck. Just ask Dana Terman (see the sidebar in this chapter),
who knew he had won the game even before his opponent moved to
Chance from Jail.
Preparing for the expected events in your personal life requires
both thought and anticipation. Each phase of your adult life brings
about new certainties and potential uncertainty. For example, once
you have children you’ll need more space, will incur added monthly
expenses, and will confront the need to establish an educational fund.
When the kids grow up and leave the nest, you may need less space
and be able to divert more of your income into investments,
accelerating progress toward your retirement goal (retirement being
another inevitable for most of us).
In addition to major life passages and interim goals, any number
of certainties occur throughout our lives. The Chance and
Community Chest decks actually offer pithy reminders of these. Let’s
take a closer look at these cards and their parallels.
 If you take a moment and think about it, you can likely make a list
of the expected events that lie ahead in your life, including those far
ahead. It’s a worthy exercise. Your list comprises your own “card
deck.” Once you envision the cards that remain to be drawn, you’ll
become more confident of handling their impact when they do
appear. In this regard, there’s a related Monopoly game secret:

SECRET 34:Memorize all the possible results on the game’s 32

cards. Keep track of which have entered play. Know which
loom in your future, and when the deck will recycle.
Think through the annual events affecting your finances that
you need to anticipate. For example, do you have a big insurance
premium due in June? Have you set money aside to cover it? For
homeowners, how about your quarterly property tax bill? Do you
need to do routine maintenance (painting or roof repair) in order
 to avoid a bigger bill due to neglect next year? Are you likely to
earn an annual bonus? If so, have you figured out how much you
can and will invest, and where? Perhaps you’ll finish paying off
an installment debt, such as a car payment. If so, how much of
this amount will be freed up to invest?
Returning to Monopoly, here’s a convenient summary of all the
cards in the game, to help you memorize them (any monetary
influence is shown first).

Here’s a reminder of two easy-to-remember facts:

A Chance card will likely send you to another space.
A Community Chest card will most likely gain you money.
We’ve all been there in the game—Jail. You’re suddenly on the
sidelines. What if you need to be moving on the board to stay
competitive? Either you’re lucky enough to have a Get Out of Jail
Free card, or you hope to roll a double during the next three turns, or
else you must part with $50. You know Jail is a place you’ll visit at
least a few times during the game.
But are you equally prepared for a visit by a setback in real life?
Sadly, lots of people deal with a sudden financial setback by hoping
for the real-life equivalent of a Get Out of Jail Free card (and one is
rarely forthcoming). The lesson from Monopoly is straightforward: