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What Squid Game can teach us about money

Squid Game is a South Korean TV series that has become an overnight sensation and Netflix’s most successful show to date. 456 people are entered into a series of childhood games, with the winners of all the games becoming very rich, while losing a game at any stage is deadly.

The stakes are high, and the contestants are selected because they are in debt and desperate. They have run out of options and are therefore willing to risk their lives to get money, even if the odds are stacked against them.

 Money affects your whole life

When it comes to money, this is the most important lesson from Squid Game. The relationship you have with money and what you do with it can affect every aspect of your life. The contestants are extreme examples, but emotion has overridden their judgement. The more indebted they get, the more they feel out of control and the more they make worse decisions.

While it may be true that money can’t buy you happiness, having a disciplined relationship with money is important. Staying in control of your finances, paying off any debts, and living within your means may give you some choices at least.

Don’t put all your eggs in one basket

The game in the third episode asks the contestants to choose one of four shapes – Circle, Triangle, Star and Umbrella. Without knowing what the game is, each contestant must choose a shape. The leader of a small group, Cho Sang-Woo, suggests splitting up. This, he says, is to reduce the risk of them all choosing a wrong option and is a classic example of not putting all your eggs in one basket. Reducing risks where possible is fundamental to long-term investment success.

Don’t take what you hear at face value

There is another subtle lesson within the programme. One contestant is not who they seem. They aren’t poor or desperate, but powerful and wealthy. While it makes for an interesting plot twist it reminds me of investor behaviours I have seen time and again. People like to brag about their successes and shy away from admitting their own failures – publicly at least. It’s a behavioural trait that if we are honest, most of us will recognise in ourselves, either when it comes to investing or in other aspects of our lives.

It is important not to get caught up in other people’s success stories and take everything at face value. This is even more important with the rise of meme stocks and trading platforms that use social media to discuss investments. It’s good to have open debate, but a quick scan of such forums reveals the high level of speculation among traders. It’s important to remember that you know very little about an individual commentator’s personal situation, attitude to risk and financial position (what Elon Musk and Kanye West invest is chicken feed). It’s better to focus on your own goals and only invest in a way that is right for you.

Simple investing rules

The rules of successful investing are often common sense and pragmatic.  In a later episode, contestants must choose a glass floor to jump on. One is reinforced and the other is thin and breaks under the weight of a person, sending contestants falling to their doom. One of the contestants happens to be an expert glass maker and uses his expertise to choose the right pane of glass. By taking his time and using the skills and information he has, he correctly picks which pane of glass to jump on. Today, investors have access to a wealth of information, but also the ability to analyse an investment and make an informed decision before making an investment. Play to your strengths and do your research before making any decisions.

Ultimately, all the contestants in Squid Game are gambling and the stakes, although exaggerated for the programme, reflect the nature of gambling — an all-or-nothing approach. Investors don’t have to make such extreme ‘bets’. You can reduce the risks of your decisions through a few simple behaviours — by setting out your goals, diversifying your portfolio through an asset model, carrying out research and sticking to your plan — you can significantly reduce the impact of any investment going wrong.

You can use the calculators and guides on comparetheplatform to compare fees and select a platform that suits you best and make well-informed decisions about investing.


Image from Canva

2021-11-30T15:19:51+00:0011/11/2021|

About the Author:

Adrian has over 20 years of experience helping and advising clients on investments and portfolio construction. He is a Chartered member of the Chartered Institute for Securities & Investments and is a regular commentator in the national press including the Financial Times, BBC and the Telegraph. Adrian was voted the unbiased.co.uk Investment IFA of the Year 2012 and was highly commended in headlinemoney’s Expert of the year in 2018. Adrian was most recently he was Head of Personal Investing at Willis Owen, where he was chair of the investment committee and responsible for selecting Focus 50 funds and running the model portfolios. Prior to that he was Investment Director for Architas the multi-Asset fund manager. He has also held Senior roles at Hargreaves Lansdown and Tilney Bestinvest. Adrian started his career as an investment adviser at Natwest Stockbrokers.

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