Category Archives: Money

3 Games That Will Help You Manage Money

Many of us use a default money-management system that goes something like:

    Do I have money?

      If yes, then buy it (whatever “it” is)
      If no, then don’t buy it (or worse: then buy it with the credit card)

That works tolerably well in an employee’s life. Not great — it will never get you ahead, financially. But since a fixed amount of money keeps rolling in every other Friday, you can do this for years and not notice that you’re falling farther and farther behind.

It won’t work for you. If you’re going to run a business, you need to be able to spend your money intentionally to further your goals. If you’re going to be self-employed, you need to run your personal finance as a business. Either way, money management is in your future.

It’s hard to practice with your own money, though, because it’s a really complex resource-management problem. Board games often simplify problems for the sake of easy game play; this feature, in turn, allows you to practice on easy problems, then harder problems, then really hard problems, until you’re ready to tackle actual money management. I hereby provide, therefore, three games that can help you be a better businessperson.

Empire Builder

In this game, you’re acting as a rail baron in the 1800s: you have your starting capital of $50 million, and you must invest it wisely to (for example), build track to Detroit, pick up steel, then build track down to Omaha to drop it off, in order to get paid. The winner is the first to build a nationwide rail network and get $250 million in cash.

How the resources work
You don’t pay anything to operate the train — no coal, no wages, and no maintenance on tracks. And it costs you nothing to pick up a load of steel or fruit. So there’s very little cashflow management necessary — you just have to figure out which set of deliveries will make you money the fastest.

How to do that in your life
Keep enough cash on hand that you can always buy the materials you need to make your product (raw materials, products from your wholesaler, employee salarties, etc), and keep enough cash on hand that you can always pay your day-to-day expenses. To be safe, you’ll probably want to keep at least a 3- to 6-month buffer in your account: 6 times as much as you usually spend on a month.
Whenever you make a sale, first use the proceeds to refill your buffer to the desired level. Everything left over is your net profit, and may be used for whatever projects or luxuries you choose.

This is a great plan, and certainly the easiest and least stressful method of managing your money. But it requires that you have 3- to 6-months’ worth of expenses sitting around in cash, and that may not be an option at the moment. If you’re not quite that wealthy yet, read on.

Empire Builder, Mayfair Games
(If you’d rather work in a different area, you can also get EuroRails, Australian Rails, India Rails, China Rails, British Rails, Russian Rails, Lunar Rails, and Martian Rails).

Puerto Rico

In this game, you’re acting as an early European settler in Puerto Rico. Your goal is to gain honor and glory by sending good stuff back to Spain. But the good stuff can also help you expand your operation, and thus result in more good stuff.

How the resources work
Everyone starts with a certain small amount of money and land. Throughout the game, you make decisions that allow you to get more money, more land, cultivate the land you have, and then send the resulting goods either back to Spain (for victory points) or to the market (for money). To win, you must strike a balance between sending goods to Spain (which is, after all, your goal), and selling them in order to fuel further growth.

How to do that in your life
Figure out what you want from your business. Are you in it to replace the income lost when you got downsized? To provide for your retirement? To create an asset you can pass on to the kids? To learn more about business? To spread the word about a great product? To change the world?

Business management consists of deciding how to allocate limited resources towards possibly-conflicting projects. Each time you make money, check out your financial situation: how much money do you have? How much will you need to meet your basic operational needs in the next month? How much will you have left over? Should the leftover be withdrawn from the business to help support your goals? Or reinvested in the business to support growth?

Puerto Rico, Rio Grande Games

Race for the Galaxy

In this game you are a race of sentient beings that is, well, racing to populate the galaxy. You play cards from your hand to build space stations, settle planets, and to produce and trade goods from your planets. At the end of the game, the person with the most victory points wins.

How resources work
Almost all of the accounting in the game is done with the cards themselves, which is good inasmuch as you don’t have a lot of fiddly bits to keep track of. But it means that your cards have to serve a lot of different purposes: they’re the things you build (space stations and the like) and the places you settle (planets) and the way you pay for those developments, because every card you play must be “paid” for by discarding cards from your hand. So in deciding what to do, you have to determine if each card is most useful as a development, or as payment for another card.

Also, you start with 6 cards in your hand, and the average cost to play a card is 3. So you have to pay very close attention to how much things cost and how much you have available to pay, because you’re running close to the wire most of the time.

How to do this in your life
Actually, odds are pretty good that you’re already doing this in your life: you have about twice as much stuff to do as you have resources with which to do those things. And you have to figure out how best to use those resources to get maximum value, given that you can’t have it all.

The advantage of Race for the Galaxy is that (a) losses don’t go on your credit report, and (b) each game takes a lot less time than a month of real life does. So you can get a lot of practice in without hurting yourself when you screw up.

Race for the Galaxy, Rio Grande Games.

Play Games! They’re Good!

Most mammals (possibly most creatures) learn through play: puppies get good at fighting by wrestling, kittens learn balance by jumping on and off of narrow ledges, and humans get good at social interaction by fighting over playground equipment.

Games are a great way to spend quality time with friends and family, to do something interactive instead of watching TV, and … to learn new skills.

Resources for Further Reading
The Role of Finance in business

What to spend money on

It takes money to make money!  (T   F)
Answer key: Mu *

Like most controversial statements, the problem is that both sides have good points.


On the “yes” side, it’s true that almost all real money-making ventures have had money invested in the at some point. If you listen closely, you’ll find that “Spend-money-to-make-money is a total myth!” is usually followed by “Why, I started this business with no more than $9 for the domain name / $25 for inventory / $250 for parts” Or especially commonly, a business will start with no more than an idea and gumption (it takes no money to go door-to-door collecting cans to recycle), and the first money made will then get reinvested to get a bicycle or a box or some advertising.


On the “no” side, it’s quite true that it takes no money to go door-to-door collecting cans to recycle, or to get a job as a dishwasher salesman, or to start a blog at And nearly every stupid expenditure ever made in any business was made with the breezy justification, “You have to spend money to make money!”


Sadly, we have reached another one of those points where there’s no clear answer. You’ll have to think for yourself.

You’ll probably want to spend money at some point in your business development. But don’t spend anything unless you see a real possibility that you’ll get more money (or education) out of it than you put into it.

*Mu: A Chinese word meaning, approximately, “Your question includes an assumption that prevents me giving you an answer. Please examine your question and yourself to find the contradiction.” Appropriate in any situation where the answer is neither “yes” nor “no”. (Return to top)

The Role of Finance

Finance and accounting is one of the most intimidating areas of business. Even setting aside that numerical literacy sucks in US education, and so you may be a total arithmophobe, the long columns of numbers and arcane terms can be confusing even to someone who majored in applied mathematics (like me). Have you got the numbers right? (How do you tell?) If so, do you know what they mean? (Um..) Are you sure you know the difference between net revenue and earnings and profits? (I don’t).

The part of finance you have to care about

There’s a very good reason (no, really!) that Fortune 500 companies are required to do their accounting by Generally Approved Accounting Principles, by which they mean “all that complex and arcane mess you see on a standard Statement of Cash Flows.” Because Ford and Toyota are required to calculate Gross Revenue and Net Revenue and Profits and Earnings Per Share in exactly the same way, all of us can look at their financial disclosures and determine which company is actually doing better. (Want to place bets?)

But you are not a Fortune 500 company. You are not a publicly-held company. You can keep your books in any way that makes sense to your shareholders — which probably means, to you.

The purpose of finance and accounting is to answer one very basic, very important question:

Am I making money or not?!

All you have to do is enough accounting to be able to answer that questions.

The Three-fold Benefits of Finance and Accounting

Actually, the “finance department” (that’s you and your calculator) has three roles, each of which involve answering variants on that question.

Am I making money? Financial Supervision

It’s easy, especially in a business with high upfront costs, to feel like you’re making money when you actually aren’t. Say you pay $100,000 to open a new restaurant. And each month you make $10,000. Whoopee! Except…. you’re paying $2000 in rent and $5000 in raw materials and $2000 in salaries and….

How much money did I make? Financial Assesment

Unless you’re lucky enough to live in a country that doesn’t collect taxes from businesses (and I don’t think there are any), you’ll have to tell the government how much you made during the previous year. And you’ll have to convince them that you’re telling them the correct number. So your financial department should be able to produce that sort of report.

How much money would I make? Financial Projection

The third role of the finance department, often under-utilized by small businesses, is to help you with decision-making. When you’re deciding between two (or more) routes, make some guesses as to what would happen, and plug those numbers into your financial statements. What would your business look like in a year if you chose this route? What would it look like in 2 years? 5 years?

This method can help you avoid spending too much money at a time and getting yourself into trouble down the road.

Resources for Further Reading
No Frills Accounting — This is the spreadsheet I created to track the very basics of your financial situation. It’s a huge spreadsheet (there’s a lot of number-crunching going on in there), but it does what you need it to do.