Cashflow App & staying in rat race on purpose

Played a round of Cashflow 101 the other day and then the person I played with found the app available for $2.99. Less expensive than the physical board game! Could be a good decision for the company though since the market for apps is likely growing much more than the physical games!

Overall, the reviews for the app are pretty good. And after playing it, it’s fairly similar to the board game. They had the game online at one point and available as a computer game, and I kind of liked it. But I also prefer not to click with a mouse all that often since I work on the computer a bit. On a phone or tablet you can touch the screen which I like better.

A few differences between the app and board game:

1. ROI not stated explicitly on deals

2. Bots can play

3. Can be single player

The app is only Cashflow 101, not 102.

One somewhat common complaint is that the text moves too quickly for bots. A little hard to keep up with it. But if you have played the game a few times, you can see the important information fairly quickly.

An issue that you sometimes have in the game is to leave the rat race too early when your income really isn’t quite high enough to be able to buy things easily on the fast track.

For the app, at first I wasn’t sure how to solve that issue. But then realized that you can take out loans before you would leave the rat race. Enough that you stay in the rat race. Sometimes that will make sense, especially if your expenses are low.

As a mechanic, I had pretty low expenses.

Could have left the rat race with a passive income of around $2,000. But if you multiply that by the 100 for outside of the rat race, you might not have as much funds as would be easier to deal with. Can be better to increase your passive income before leaving the rat race.

So I got some big deals without loans first and later took out some loans which also helped get some more big deals.

A passive income of around $4,000 should be sufficient to leave the rat race. You can leave earlier. But one time I lost a game because I left the rat race too early.

Usually you want to leave the rat race as soon as possible, but sometimes it can be better to wait strategically by taking out loans.

Cashflow 202 Round 1

Yesterday I played Cashflow 202 with my friend.

It’s basically an expansion to 101, so it requires some of the same pieces and the board from 101.

The cards are completely different.

The stock market becomes more complicated and volatile- companies can go bankrupt, you can sell short, and use put and call options.

Because of these changes, you have a new playing sheet just for your stocks.

In addition to your job, you start off with an initial portfolio.

Instead of big deals and small deals, you have capital gains deals and cashflow deals.

You pick one of these deals whenever you land on an opportunity space OR a market space.  And after you act upon the deal, you draw a market card.

The market cards work a little bit differently too, you shuffle them and place 25 on the board, leaving the rest to the side.  After you go through all 25 then you reshuffle them with the rest of the cards and deal out another 25.

There’s a home business component which has different levels too.

My profession was truck driver, I had fairly low expenses.

My investment portfolio started me off with 3000 in cash and a 4-plex.

The deal that really got me some capital was shortselling 5000 shares of an overpriced stock.

Then I could afford better deals.

You can also negotiate more with other players throughout the game.  I ended up giving 12k to my friend for one deal that gave him some cash and me some good cashflow.

After I got a lot of cash from the one very successful stock deal, I paid off all my liabilities, even though paying off the home mortgage is not a high ROI.  (I had paid off retail debt much earlier)

To get out of the ratrace in 202 you need to have your passive income be twice your expenses.

And to win you need to buy your dream or two other dreams as well as getting 50k in passive income on the fast track.

On the fast track you can also franchise businesses you already own and buy businesses of other places (for twice the cost).

Cashflow Small Deals & Big Deals

In the game, small deals are $5000 and below and big deals are $6000 and up.

That means a big deal could cost $200,000 maybe even more.  But that is pretty high.

Towards the beginning of the game you want to stick with the small deals.

Stocks are small deals and can make you some money.

Later, when you have a lot of money to spend though, big deals are better for you.  Even if their ROI’s aren’t as high.

It’s like how Warren Buffets buys whole companies instead of stocks.  He didn’t do that before since he was getting a better ROI through the smaller deals.  But smaller deals don’t change his bottomline anymore since they’re such a small percentage of his cash reserves.

Cashflow 101 Round 5! Debt & ROI

I played Cashflow 101 with my brother and his friend the other day.

Neither of them had played before.

My profession was Airline Pilot.

I had no school loans and a pretty high salary, my expenses were also high.

The first game I played, I had basically ignored liabilities and their interest rates.

After that I thought more about them.

They are different, some are worth paying, others aren’t.

In the game, you can buy a house or other investment and get a certain ROI on it.

The liabilities also have an “ROI” but it’s money that reduces your expensive.  Essentially it does the same thing.

For a $1000 retail debt, you pay $50 each month.

So if you pay it off, you’re saving $50 each month.

Some of the houses in the game return $100/month.  And the downpayment will be about $4000.  Sometimes more, sometimes less.

(100*12)/4000= 30% ROI.  That’s an all right ROI.

Other investments have much higher ROI’s.

Paying the retail debt will save you $600 in a year for a cost of $1000 to pay it off.

$600/$1000= 60% ROI.

60% ROI is pretty decent.  Not the highest ROI in the game, but not too shabby.

The credit card debt that I had in this game was 22k and I was paying $660/month

So paying that off was a 36% ROI.

The car loan was 300/month.

Paying it off was a 24% ROI.

So the retail debt had a higher ROI than the credit cards which was higher than the car loans which are probably higher than school loans.  But I didn’t have any school loans as an airline pilot.

The liabilities are also things you can pay off without drawing an opportunity card, so I would say the retail debt is probably a good thing to pay off early on.

You can compare it to the deals you’re getting.  So if a house with a 120% ROI came up, that would be a better use of your money.

Note on bank loans: Bank loans cost 10% of each $1000 increment.  So in a year you have to pay $1200 for a $1000 loan.  They’re only worth it if you come across a really good deal and then probably only if you have a good chunk of the money already and just need some more.

I was more agrressive with my investments and had a group of houses, 8plexes, a software company, and some other things.

Ended getting out of the ratrace first with a buyout of 780k or so.

He stayed in the ratrace a little longer since his buyout was going to be pretty low.  I had an issue with that before when I got out really early but couldn’t afford my ‘dream’ when I landed on it.

My brother got out right before I won the game.

And I had bought his dream just for kicks when I landed on it.

Cashflow for Kids

So I happened to play Cashflow for Kids the other day.

Similar in some ways to Cashflow 101.

The system of money is using little plastic squares and triangles makes it a lot easier to visually see what’s happening.

And for kids, they can just count and compare numbers of things.

It’s a bit harder to keep track of all the pieces once you’re done playing though.

Overall, it’s not a very punishing game, you can make a bad decision and it doesn’t really matter, you can always start over again, there is no ‘losing’

And most of the deals seem to be a good idea since you tend to have enough cash to buy everything.

Definitely easier to play, but for adults, not as educational.

Cashflow 101 (e game) Round 4!

A friend of mine got the egame after participating (and winning) the third game that I played.

There were four of us playing this time and we had it on a big screen and shared a mouse.  You type some numbers in with a keyboard too.

I was a doctor and there was also a custodian, a police officer and an army soldier.

At first I thought being a doctor would be great, and it was good in some respects since I had some cash.

However, I had a ton of school debt and a big house payment.

I was making around 2,000 in passive income later in the game, but I had about 9,000 in expenses, even after paying off retail and credit card debt.

The other players only needed a bit more than 1,000 in passive to get out.

I stuck with small deals, until I had about 40,000.

My good payout was when I sold two houses.

But I still didn’t get great business deals.  It seemed like the ROI’s were usually about 50% for me, which wasn’t bad.

Brian, who won, got a deal that had a 75% ROI, I think it was a big deal, right before he got out of the ratrace.

Another player bought a bunch of $1 stocks and made bank later on.

You have to click a lot when you’re playing the egame.  But you also drag and drop costs, cashflow, liabilities, etc.  And you have to do it right.

Another element is Kiyosaki and a turtle both making commentary.  And they’ll talk to each other too.  Basically you want Kiyosaki to like your decisions.

Cashflow 101 Round 3!

Played round three tonight and finished it in about 3 hours with six people.

Another interesting game!

My profession was ‘Janitor’ and there were a range of other professions.

Basically my costs were very low, but it was slow being able to make investments in the beginning.

The turn of events for me was getting and selling a house.

One of the players made a ton of money early on with the stock market.  Her profession was doctor.  So she had more debt.  Basically she wasn’t very aggressive even when she had a lot of cash.

She did buy an opportunity with the cash she had and outbid me on something that would have gotten me out of the rat race.

My friend could have gotten out first, but chose to stay in for a little bit.  He got downsized, which kept him in longer too.

I got out as soon as I could- but my cashflow was pretty low.  My expenses were low too.  Only had about $1000 in passive income and that was higher than my expenses.  I had paid off all my debt at that point.

In retrospect, I should have gotten a bit more passive income and maybe not worried about the debt as much.  Part of that debt was good to pay off, but probably the house mortgage didn’t give a good ROI.

I did land on my dream after two rolls of the dice, but I didn’t have enough cash to buy it……

My friend Chris was making a lot of money and had close to the 50k on the fast track, but Brian won by buying his dream pretty shortly after exiting the rat race.

Cashflow 101 Round 2!

Played round two last night and finished it in about 1.5 hours (vs. 2.5 hours the first time).

There were some interesting turns of events!

My profession was ‘Lawyer’ and Enrique was ‘Airliine Pilot’ (I had been airline pilot the first round that I played).

This lawyer wasn’t great with money in some ways and had $78,000 in school loans and a decent sized house payment.

Luckily he didn’t have a huge car loan.

A little while into the game, once I had about 70,000, I ended up paying off 18,000 in debt.  Something I hadn’t tried before.  That reduced my expenses by about 450.

It was a decent return on investment- I suppose about 30% ROI.

The main advantage was it gave me that “ROI” in addition to being able to invest in big deals and small deals.

Another lesson I learned was that you don’t want to get into big deals before you’re able to, since they can be expensive and may not have a good return on investment.

I had a collection of various businesses and real estate by the time I got out of the rat race.

At the end when I got out of the ratrace I ended up rolling onto my ‘dream’ the first roll and bought it and won.

Just got Cashflow Board Game!

It took 2.5 hours from starting the game to finish it.

My profession card was ‘airline pilot’.

One of the lessons from the game is that your income doesn’t matter as much as your passive income that you get from your investments and businesses.

Rich Dad Cashflow 101

I got three kids while I was playing too (the max number)!  They are an expense, but really not that much once you start to own more assets.

At first I didn’t really understand how the debt works and how paying off the debt could help you in the game.

Then I figured out that the different debts you have also have different interest rates.  The highest interest seems to be on the retail debt, second most on the credit card debt, and the least on the mortgage of your house.

To pay off a debt, you need to pay the entire liability amount.

So it’s probably not a bad idea to pay off the retail debt fairly early in the game and then the credit card and mortgage a bit later.