Get Rich!

Stock Card

The stock card represents ownership in companies. While stocks carry the most short-term risk, they tend to have the least long-term risk. For example, if you invest in a diversified portfolio of stocks over twenty years, you’re likely to have more wealth than if you had invested in bonds or cash over the same period. This is why the stock card has the highest positive multiplier in the game. Holding the stock card at the end signifies that it has increased the most.

In real life, you need a diversified stock portfolio to achieve the stock market's average returns. However, this idea is condensed into a single stock card for simplicity in gameplay. Remember, this game isn’t designed to teach specific stock strategies but to convey that more wealth is typically created with stocks than with bonds or cash over long periods.

Bond Card

The bond card represents an investment in the debt of governments or companies. When investors buy bonds, they lend money to these entities, which borrow funds to support growth. Unlike stocks, bonds do not offer equity or ownership in a company’s profits or losses. Instead, the government or company that issued the bond pays interest and eventually repays the principal to the investor.

Bonds are generally less risky than stocks in the short term because their interest payments are more predictable and secure. However, over the long term, bonds can be riskier. Their average returns are typically lower than those of stocks, and they often struggle to keep pace with inflation.

Cash Card

Cash is government-issued fiat currency used to facilitate transactions for goods and services. One of the key advantages of cash is that it is fungible, meaning it is easily interchangeable and can be used universally. Without fungibility, you'd have to trade exactly what the seller wanted every time you made a purchase (e.g., food or clothing). For instance, if you wanted to buy a gallon of milk, and the seller preferred a pound of rice, but all you had was a pound of corn, no transaction would occur. Fortunately, cash simplifies this process. You can pay for the milk with cash, and the seller can then use that cash to buy their pound of rice.

While cash is an excellent tool for facilitating transactions, it isn't a great store of value due to inflation. Inflation erodes purchasing power, meaning that a dollar a year from now will buy less than it does today. Although cash can earn interest, this rate is typically lower than what bonds offer. Over the long term, cash generally fails to outpace inflation, making it a poor long-term investment.

However, in real life, it’s always wise to maintain a cash emergency fund—large enough to cover three to six months of expenses—in case of unemployment or unexpected financial setbacks.

Credit Card

The credit card represents purchasing goods and services on credit with money you don’t have. Credit card interest rates are among the highest for borrowing, typically ranging from 15% to 30% per year. Many people struggle to pay off their credit card debt each month, causing the debt to grow larger over time. As a result, credit cards carry the highest negative multiplier in the game. Holding the credit card at the end signifies that the debt has grown more than any other debt card.

In real life, it's best to avoid using credit cards unless you can pay them off in full at the end of each month. If you can’t afford something, saving up the money before making the purchase is wiser. Credit card debt can be financially destructive.

Additionally, when you use credit cards to buy consumables, you often have little to show for it. For instance, if you buy food on credit, it’s consumed, leaving you with no lasting value. Similarly, clothes bought on credit eventually wear out and are discarded, leaving you with nothing but debt.

Car Card

New cars are expensive! Many people who choose to buy a new car don’t have enough money to pay for it in cash, so they take out a loan (debt). This allows them to use the car immediately, but they must make monthly payments for three to six years until the debt is fully repaid. In addition to paying back the cost of the vehicle, they are charged interest—an extra cost that the bank charges for lending the money.

One downside of buying a new car is that it can lose up to 60% of its original value within the first three years. For example, a new car purchased for $30,000 may only be worth $12,000 after three years. If you financed the entire purchase at 6% over six years, you would still owe $16,343 after those three years. When the asset’s value is less than what you owe, this is called being “upside down” or “underwater” on the loan—definitely not a “wealthy” place to be.

However, compared to credit card debt, at least a new car has some value behind the debt. The "wealthy" decision is to buy a used car at a lower cost and pay for it with the cash you've saved.

House Card

Houses are expensive and require ongoing upkeep, which also costs money. Most people don’t have enough cash to buy a house outright, so they take out a mortgage (debt). This allows them to live in the house now, but they must make monthly payments for 15 to 30 years until the debt is paid off. In addition to repaying the cost of the house, they also pay interest—an extra charge from the bank for borrowing the money.

Unlike car loans, home values can appreciate over time, though this isn’t guaranteed. Historically, homes have tended to increase in value. Mortgage interest rates are usually lower than those for car loans or credit card debt, which makes home debt more manageable. However, being debt-free is always the best financial position.

Many people make the mistake of buying more house than they can afford, taking on a larger mortgage than is wise. This means they spend too much of their monthly income on house payments—a “poor” financial choice. Remember that the more expensive the house, the higher the costs for upkeep, property taxes, and insurance.

It’s also important not to view your home as an investment. You’ll always need a place to live, and even if you sell your house at a profit, you’ll likely need to purchase another home of similar value.

Passive Income Card

The passive income card represents money you receive regularly from your real estate, business, or a portfolio of stocks and bonds. This income is considered “passive” because you don’t work for it on an hourly basis. However, that doesn’t mean it requires no effort—it often takes significant upfront work or investment and occasional management. If you manage your passive income sources effectively, they should continue generating cash for you regularly.

The passive income card is special in the game because it represents income generated by an asset you own. At the end of the game, the face value of the card is multiplied by ten, symbolizing the asset’s value in producing income. While there are various ways to value assets, the capitalization rate method is the simplest for real estate.

To calculate a property's value, you divide the net operating income (NOI)—which is the total rent earned minus operating expenses (excluding financing and depreciation)—by the capitalization rate, which represents the required rate of return. The lower the rate, the less risky the property is. For example, if a property has an annual NOI (or passive income) of $4,000 and your required return (cap rate) is 10%, the property would be valued at $40,000.

To simplify the game, we use a fixed 10% required rate of return. So, by multiplying the card's $4,000 face value by 10, we get the same $40,000 value. We chose ten for simplicity, though capitalization rates typically range from 5% to 20%, depending on the asset's risk.

Active Income Card

The active income card represents the monthly income or money you receive from your job through hourly wages or a salary. It reflects the income earned daily by dentists, doctors, lawyers, teachers, plumbers, social workers, managers, etc. Whether you’re an employee or self-employed, active income requires you to be engaged in work to earn it. Most people rely entirely on active income for their livelihood, and while it provides the money needed to live, it comes with limitations.

One of the most important financial decisions you’ll make is how to earn active income. However, in this game, the focus is on accumulating assets and avoiding debts, so active income is not rewarded like passive income because no asset backs it. Think of it this way: if you lose your job or your ability to earn active income, you receive nothing—zero, zilch! Active income doesn’t have an asset supporting it like passive income does. The key takeaway here is that throughout your career, you should aim to transform as much of your active income as possible into passive income by acquiring assets and avoiding debt.

Expense Card

The expense card represents your living expenses. In real life, you have an income statement that starts with your income and subtracts all your expenses. Your discretionary income remains—the money you can save, invest, or spend. The fewer expenses you have, the more discretionary income you’ll have, which gives you greater financial flexibility.

You're in trouble if your monthly expenses match or exceed your monthly income. This means you're not earning enough to sustain your current lifestyle. You must reduce your monthly expenses to stay below your income in that situation. Remember, before spending on your wants, you must cover your basic needs: food, clothing, and shelter.

Boom & Crash Cards

There is always a degree of uncertainty in life, and the Boom and Crash card introduces that uncertainty into the game. The Boom card represents a bull stock market and a corresponding economic expansion. On average, during a bull market, stock prices rise. Conversely, the Crash card represents a bear market and an economic contraction. In a bear market, stocks typically decrease in price.

While the timing and magnitude of bull and bear markets are unpredictable, they will continually occur. Understanding their inevitability and how they impact your wealth is crucial. In real life, bull and bear markets affect everyone, and your decisions during these periods will influence your wealth accumulation. The key principle to remember is to buy low and sell high.