It’s a Friday night after a long week of work. Instead of grabbing drinks to blow off steam, many millennials find themselves deeply entrenched in a game of Settlers of Catan. The niche game turned mainstream success has helped trigger a broad revival in the board game industry, which struggled to keep pace with the internet and video games.
Part of the recent appeal—like other popular games Ticket to Ride and Pandemic—is that it places greater emphasis on strategy and cooperation than some of the iconic games of the past. That crucial development whereby every player wins or loses as a team fulfills our desire for social interaction and a sense of community.
As it turns out, Settlers of Catan also teaches us many valuable finance and economics lessons, too. Here are five important takeaways.
Economics isn’t a Zero-Sum Game
When it comes to a game like Monopoly, the goal is to corner the real estate market by acquiring new properties and bankrupting your opponents. Each roll of the dice benefits you and you alone. Winning means everybody else loses.
Not so in Settlers. You can roll a number that produces resources for every player in the game, the same way free markets and capitalism enrich multiple economies. And when more resources are in play in the game or real-life, overall wealth tends to increase.
Love Thy Neighbor
Settlers effectively strikes a balance between competition and cooperation fundamental in international relations. Players are constrained by the number of resources they can produce and must use trade to move forward in the game. For example, you may look to use a comparative advantage in ore to acquire more brick to build a road
Here both parties benefit by exchanging their surplus of resources without having to deal with the bank. This echoes the virtues of free trade and globalization. Open market policies have long been hailed as a driver of high-quality products at lower costs, increased innovation and a better standard of living. Perhaps our politicians should play a game of Settlers before perpetuating a trade war with China and the rest of the world.
Patience is a Virtue
Whether we’re prepping for our post-work lives or next year’s vacation, delaying gratification is key. Same goes for Settlers. Instead of making hasty trades or exhausting your resources each turn, you should look at the long-term path to victory. Sometimes that means building the largest road for an additional 2 points or acquiring the most knight cards for the largest army, just as you might avoid chasing performance to reach a long-term goal.
Don’t put all your eggs in one basket
One of the most basic and important investing lessons to learn is diversification; Holding a mix of stocks and bonds boosts returns and more importantly protects you when some investments are down.
And just as you wouldn’t want to hold all technology stocks heading into the Dotcom Bubble, you don’t look for a monopoly on any single resource card. The goal is to build roads, settlements, and cities through different resource producing regions. That way a drought in wheat, for instance, can be offset by an inflow of a different resource and my game plan isn’t ruined.
Save today for a better tomorrow
The robber can foil a game of Catan at any moment. One way to protect against the robber is by saving your resources and planning ahead. That means taking a strategic approach to expanding while saving some of the most in-demand resources. A similar tactic goes just as far in the real world; those that balance spending today with saving for retirement maintain a stronger financial health. It’s not just retirement either. Creating an emergency fund can get you through difficult situations like unexpectedly losing a job.
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