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Monopoly-Inspired Advice Worth Banking, Author Says

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Applying the lessons of Monopoly to your everyday finances can actually pay off. NY1's Tara Lynn Wagner filed the following "Money Matters" report.

Sure, it may feel like fun and games, but there are a lot of lessons to be learned while making your way around the Monopoly board. So says author Philip Orbanes, who recently published a book called "Monopoly: Money and You".

Each player is given $1,500 to start, but Orbanes says you won't last long if you hold on to it too tightly.

"The same is true in real life. If you just put your money into a bank and earn a paltry return, you are never going to get rich. You have to take a risk. And taking the risk means you have to calculate the return on investment of what you are investing in and the risk that you might lose money on it," says Orbanes.

Not every investment is going to pay dividends, which is why he says it's important to diversify, both in Monopoly and in real life.

"If you put all of your money behind the hottest trend and it goes south, you lose. Monopoly says you want a color group to build on, you want a couple of railroads to give you a good cash inflow to build up your group, and just as importantly, it helps to have a few single properties that block your opponents from building against you," says Orbanes.

Monopoly was created in 1935 but while the prices of things have changed over the decades, a lot of what you'll find on the board still applies.

There are utilities to be paid, and taxes, hospital bills and school fees. Owning property can generate income but also requires maintenance. Every now and then, there may be an unexpected windfall, but in a world full of question marks, there's always the chance something can go wrong.

"If you do not have an emergency fund to pay for them, you will be going into debt, which is always a bad thing," says Orbanes. "Whether it is weather-related or storm-damaged to your home or whatnot or seasonal, the need to have different clothing. If you don't anticipate and plan for the expected, you have a financial crisis on your hands, and the same is true in Monopoly."

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