The Chivas Regal of board games?

Major in economics in college, and you'll likely hear the story about Chivas Regal, a brand that was struggling back in the seventies and hired a consultant to diagnose its ills. The consultants came back with two recommendations: change the label, and raise the price of a bottle of whiskey by 20%. The logic was that consumers would take the higher price as a signal of higher quality, and demonstrate a willingness to pay. Sure enough, the strategy worked. I bring this up because Mary Umberger has a front-page story in the Chicago Tribune about a new board game that makes the Chivas Regal price change look miniscule: "OK, everybody, grab a rat," announced an organizer who had brought a dozen aspiring property magnates together. The group, crowded around tables in a Naperville sandwich shop on a recent Saturday morning, reached for their game markers--little plastic rats--to play Cashflow 101, a board game some devotees credit with changing their lives. The brainchild of investment guru Robert Kiyosaki, author of the extraordinarily popular "Rich Dad, Poor Dad" books, Cashflow 101 has spawned clubs around the world. Members play regularly, learning the accounting principles Kiyosaki insists are key to shrewd investing, while honing their get-rich-quick fantasies.... "I thought it was the stupidest thing I had ever heard of until I sat down to play it," said Paul Strauss of Naperville, a full-time real estate investor and a founder of the Windy City club, which isn't affiliated with Kiyosaki but whose Web site links to Kiyosaki's. "But the game teaches you how to get out of the rat race, and I did." The prospect of learning the secret to wealth has unlimited appeal in a culture that has embraced real estate investing as sort of a fiscal sport. Some economists tied novice speculators to as many as one-fourth of real estate transactions in 2004. This has led to boom times for pitchmen of books, videos, seminars, DVDs and trade shows. Among those at the top of that big heap is Kiyosaki, who preaches that schools fail to teach financial literacy. His solution was to create Cashflow 101. Though it has dice, markers and a colorful board, it's not a typical game--it's more Monopoly on steroids. For one thing, it costs $195, as opposed to the industry average of $15 to $39. Kiyosaki said that when he was developing the game, a consultant told him it was too complex for the public. "He said, `Raise your price. Make it ridiculous,'" Kiyosaki recalled. "`That would make people perceive it as a value.'" So, is the game worth the coin? I haven't played it, so I can't say for sure. Snippets from the Tribune story make me skeptical, however: Cashflow also departs from routine games through the detailed accounting each player must do. The object of the game, like Monopoly, is to make money through investments. But players must keep meticulous financial statements, updating them constantly as they flip apartment buildings, negotiate complicated partnerships and juggle debt.... Financial planners complain that he scorns 401(k) plans, mutual funds and other traditional forms of saving in favor of more risky real estate and franchise endeavors. Critics say his books are long on platitudes and short on specific investment strategies, beyond developing passive income from real estate and stocks.... Julie Canoura, a Naperville real estate agent, is a believer in the game. She said she's using her individual retirement account to invest in property in Belize and has learned investment strategies from other players. (emphasis added) For the past five years -- the period of Kiyosaki's fame -- real estate investment was a pretty shrewd move. However, anyone who banks their retirement income on property in Belize is much more comfortable with risk than I am. To be fair, if you root arounf Kiyosaki's web site, he's quite aware of the real estate bubble. However, this letter suggests to me that his financial success seems based on the Chivas Regal argument: Presently, although Kim and I are still buying real estate, we are also selling our "junk" real estate. Eight months ago, Kim put on the market a small apartment house valued at $1 million, for $1.4 million. People complained and no one bought it. So four weeks ago, she raised the price to $2.0 million and it sold in one day for full price. Hmmmm.... maybe my belief in the power of incentives is misplaced, but I just don't buy this. I can accept that the Chivas Regal effect works for... Chivas Regal. Maybe I can accept the idea that it works for an overpriced board game. But the idea that someone was able to sell a piece of real estate only after jacking the price up by $600,000 doesn't pass my smell test. For anyone curious about Kiyosaki's current investment strategy: I am getting rid of my U.S. dollars. As you may know, the U.S. dollar has lost nearly 40% of its value against other currencies in the last four years. That means if you have $10,000 in savings in the year 2000, it is worth about $6,000 in purchasing power. Rather than holding cash in the bank, Kim and I have been holding our excess cash in gold and silver bars. Why? Because you will know that the dollar is falling because the price of gold and especially silver will begin to rise. When silver goes higher than $8.50 an ounce and gold reaches $500 an ounce, you will know the end is near. When the crash comes, the currency of many countries will go down in purchasing power as the price of these two precious metals rise in value.