Financial Lessons From The Squid Game

Financial Lessons From The Squid Game

Financial Lessons From The Squid Game
Financial Lessons From The Squid Game

This show from Netflix needs no introduction. Amidst the games, the show highlighted the Korea Economy. One with highly-skewed income disparity, worsening household debt and survival of the fittest amid fierce competition.

South Korea is the 12th biggest economy in the world with a GDP of $1.6T. Singapore is trailing behind at 36th with a GDP of $364.2B. Though they are larger in GDP, it seems like the struggles they have with money is the same as Singapore or even worse.

While watching the show, I keep feeling that the characters behave very badly when it comes to money (or the lack of money). Just a few days after, I can’t help but think that it is an representation of what is happening in real life. (That’s probably why the show resonates to us on some level).

To avoid going down the slippery slope, I decided to consolidate the lessons we can learn from this so that we will NEVER have a situation like this EVER.

Hope you enjoy the read.

Spoiler Alerts: Please do not read this as it contains spoilers on the show. We invite you to come back after you finish the series.

 

We Have Emotions

Financial Lessons From The Squid Game Emotion Greed Fear
Financial Lessons From The Squid Game Emotion Greed Fear (Source: Distractify)

I feel that this is something that isn’t acknowledged much in the financial world. It is often thought that most financial decision can be made logically easily. The basic assumption in most economic literature is that humans are rational in nature. However, behaviour economics proven time over time that this couldn’t be more wrong.

Starbucks Behaviour Economics Financial Lessons
Starbucks Behaviour Economics Financial Lessons (Source: S-Retech)

Consider this, you walk into Starbucks (or any other coffee places) to get your daily small dose of coffee. After looking at the prices, most people end up getting the big cup not because they wanted it but because it is a “much better price” than the medium. If you have also chosen the big cup, congratulations, you have experienced the Decoy Effect.

The Decoy Effects explains how an inclusion of an inferior 3rd choice (medium cup) will affect your consideration of between the initial 2 choices (large and small). When there is a decoy alternative, most people makes decision based less on what suits their needs and what we considered as a more beneficial alternative. This results in people spending more as a result at Starbucks.

This is just one of the many cognitive bias that we experience.

This is why it is not easy to invest in the long run, buying term and invest the rest is bad advice or why buy low and sell high is useless advice. I’m not denying that those are rational. It is logical. But we are humans. We experience fear, greed, anger, denial, lost, guilt, shame, hope, envy etc.

These makes it very tough to be rational in a body where we feel so much. Today, most people only focus on the rational side which makes it tough to have a good conversation on finances. I hope that more and more people can come to acknowledgement with their emotions in future.

You Can Win With The Right Strategy

Financial Lessons From The Squid Game Right Strategy
Financial Lessons From The Squid Game Right Strategy

In this very epic game of tug of war, strength is very important. In the team of 10 people, the protagonist team have 3 ladies, 1 weak elderly and 6 men. They faces off a stronger team consisting of all men.

While it feels like the protagonists team have a clear disadvantage in this game, the weak elderly share his wisdom and experience on how to strategize and win against teams that are bigger and stronger than them.

The protagonists team barely escape death by execute the strategy and winning against a team far stronger than them.

In the financial world, you can consider the 10 people the resources that we have. Some of my peers have rich parents, some are left properties under their names, some have good networks and have parents financially independent. But, they may not be financially as well off.

I also have friends who have siblings who depend on them, a study loan, parents who believes that children is the ultimate retirement plan. In spite of this, some of them do succeed in their financial goals by having a right strategy and executing it well.

Having a strong 10 people/resource is important. It is as important as having the right strategy and executing it well.

Learn From Others Mistakes

Financial Lessons From The Squid Game Learning From Mistakes
Financial Lessons From The Squid Game Learning From Mistakes

In another nerve wreaking game called the glass stepping game, participants are made to cross a glass bridge. Participants are presented 2 choices. Stepping on the right choice would mean safety, stepping on the wrong one would meant death. In any event the participant chooses the wrong one and dies, the one after him/her can choose the right one and proceed with the game.

In this game, it is awful being the first one.

In the financial world, money was first originated some where as early as 5000 B.C., in which tons of literature has already been written. One of the classics of financial books is The Richest Man in Babylon. Many important clues have been record and it is up to us to follow that roadmap presented to us.

Another way is to learn from the people around us. If our parents have achieve a certain level of financial freedom, we can learn from it. If our parents have not achieve any, we can also learn from that too.

In whichever case, there is always something to learn.

People Can Behave Badly When It Comes To Money

Financial Lessons From The Squid Game Bad Behaviour
Financial Lessons From The Squid Game Bad Behaviour

In the final game of the series, Squid game, the 2 protagonists face off in a brutal, savage and barbaric fight. As their lives and the prize money was on the line, they really had a lot to fight for.

I was reminded of estate planning stories and divorce stories that were shared during my recent IBF Certification for Private Banking. Most of the stories were very unfortunate. In almost all cases, humans behaves very badly when it comes to money issues.

A old example happened in 2013 when a Singapore based couple committed “financial suicide”. Both have spend SGD$1.7 million on legal costs – just to decide where the divorce should be heard as well as litigation costs linked to the child. You can find the article from multimedia stations from NLB Libraries. It is written in The Straits Times dated Friday, 2 Aug 2013 by Senior Law Correspondent K.C. Vijayan.

Divorce Case Financial Suicide
Divorce Case Financial Suicide

In a more recent example, siblings are suing their elder brother over 2 properties worth SGD$3.1 million. As the estate planning was not poorly set up, it has resulted in a messy inheritance battle of which relationship will be ruined. Though it is not known what the legal costs are, I believe their relationship will never be the same again.

The Financial Journey

Financial Lessons From The Squid Game The Journey
Financial Lessons From The Squid Game The Journey

In the most iconic game called Green Light, Red Light, participants win by making their way towards the end of the line in a given time limit. They can only move when it is Green Light (when the doll is not facing them) and they have to stop any movement during Red Light (when the doll is facing them).

At the start, the participants don’t really understand what to do. 2 brave souls started the journey but ended up dead. This causes panic to everyone and people scrambled towards the “exit”. Unfortunately, they were all shot dead.

The cooler headed participants began their journey again. Unfortunately, some tripped either because they were moving too fast or just unlucky to bump into themselves. They died in their attempt to reach the end.

As some participants crossed the line and won the game, there were others that couldn’t cross the line and died as well.

In this game, it closely symbolizes our journey with money. In a given period of time (working years), we want to reach the end (retirement). Some people panic when they see others lost money in the investment and ran towards the exit (panic selling). Some people overleverage (move too fast), some people suffers from critical illness (bump into themselves), some people start too late (couldn’t reach the end). In all these cases, it resulted in people having a less than ideal lifestyle.

Final Thoughts

Overall, this show was a dark, ghastful and yet awfully realistic in showcasing the behaviour of humans put in those desperate situations.

I recommend watching a comedy after the show.

What other financial lessons have you learn from this show? Let me know in the comments below.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

5 Ways Tony Hsieh Changed The World Quote

5 Ways Tony Hsieh Changed The World

This post is dedicated to Tony Hsieh. He died on 27 Nov in a house fire. He is well known to be the CEO of Zappos which was later sold to Amazon for USD$1.2Billion. In his years, he made many impact to the world and these are the some I’m personally thankful for.

This is a non personal finance post. However, I believe we can learn from the actions and the values that he had. Here are 5 ways Tony Hsieh changed the world.

5 Ways Tony Hsieh Changed The World Quote
5 Ways Tony Hsieh Changed The World Quote

 

The Fore-Runner For E-Commerce

People would have agreed that Alibaba, Lazada, Shopee or even Amazon to be the success icon for e-commerce. To put things into perspective, Amazon started in 1994, Alibaba started in 1999 but only found success years later. Zappos started in 1999 and found resounding success by doing something that people thought was crazy then.

They sold shoes online and offered free 60-day shipping AND returns policy. In 2003, Zappos decided to give customers 365 days to return the shoes, as long as they were in “like new” condition and in the original box.

In 1999, this was a crazy idea. It was a time people bought shoes from stores because people could actually try them to see if it fits. Mind you, there was barely any online shopping and a lot of distrust buying things online. Many people also thought that the return policy would kill their financials as it was expensive then.

Fast forward 20 years later, you can buy almost anything online and return policies are a norm. They were certainly way ahead of their time. Do you have an idea that people thing is crazy?

 

The Focus on Customer Service

In an era in which we demand cheaper and better products, Tony focused on customer service. Many businesses become so focused on the product or service that they end up forgetting the most important factor that ensure their business prosper: their customer. Tony did not.

In 2004, Zappos’ customer loyalty team embarked their 24 hours a day, seven days a week, 365 days a year shift. In a world where customer service is a cost center, Zappos employed 25% of their staffs (2004) as customer services. There are no scripts and no time limits on phone calls. It was just a full time job making sure their customers were happy.

Fast forward 20 years later, your business’s reviews online can make or break your reputation. Just look at how Lemonade is focusing on customer satisfaction now. Have you gave a good review to someone recently? Maybe you can do so for me =)

 

Quirky Corporate Culture

After Amazon bought Zappos over, the employees in Zappos was afraid that the corporate culture in Zappos would change. Amazon was known to have an intense corporate structure as compared to Zappos experimental, fun and quirky culture.

Tony maintained the culture and Amazon has been keeping a hand-off approach for Zappos.

In the famous CEO statement, Tony titled his speech “Zappos And Amazon Sitting In A Tree” and assured the culture will remain the same or better. It is one of the best CEO statement I have ever read. In it, he reassured that his employees will still have a job and the leaders will continue running the company. Please have a read.

Personally, I related to this strongly. I’m working in the Financial Services Industry where our performance are measured with sales. It is not a secret that the company I work for is profit driven (just like most companies). However, I’m blessed to be in a District (aka sales team) where we measure success differently. As a result, the culture of the district is one that focuses on delivering the best value to our clients in terms of strategic planning and also claim experiences. I’m very thankful as I don’t think it will be easy to find a company that is accepting of a culture like ours. It is much easier to focus on my client needs in such a very supportive culture. Does your company have a supporting culture?

 

Relationships

When asked what was his greatest achievement, he mentioned:

“The relationships and friendships. We focus a lot on company culture, so these are not just co-worker relationships but true friendships, where people choose to hang out with each other after work or go on trips together. [That also applies to] the relationships with our vendors and other business partners.”

In an age where we are more connected digitally but disconnected physically and emotionally, his focus on relationship struck a chord in my heart. I have friends (whom I don’t hang out much anymore) who were constantly on their phones, checking their emails/Facebook notification/ Instagram notification during the time we were having lunch/dinner. Connecting with them was a struggle as they will be distracted every 3 seconds looking at their phone. The relationship that we have now are conveyed through a “like” on Facebook and it disturbs me greatly. I do treasure the Facetime I have with people now.

Tony’s focus on relationship (you can have the same with wealth) inspires me and I hope that it will be my greatest achievement in my life too. When was the last time you sat down with someone and look into him/her in the eye and talk?

 

Happiness

5 Ways Tony Hsieh Changed The World Delivering Happiness
5 Ways Tony Hsieh Changed The World Delivering Happiness

One buzzword for the younger generation would be “Happiness”. Although his book is on business lessons, it is applicable to many life lessons. One of my favourite is “Go with your heart”. This statement is easy to say but not easy to practice. Sometimes, it would mean breaking expectations that has been subconsciously imposed on us.

In the world’s culture asking us to do more, earn more, it is not easy to go with your heart. I dare say that most parents want their children to be an engineer, doctor or a managerial job that is “stable”. It took me great courage to go with my heart by venturing into the financial services industry and also the investment industry. There were many heartaches, my parents felt it was a waste for a University Graduate to be an insurance agent, , many times they asked me to find a “real” job, many times I felt like giving up. Nevertheless, in every leg of the journey where I followed my heart, I learnt more about myself. It wasn’t easy but then again life never was.

Are you following your heart? What is your heart saying?

 

Final Thoughts By Wealthdojo

Things are never really the end. It is the start. Because of Tony, I believe many people have believed things are possible and we are living in their version of the world that they have dreamt up.

What’s your vision of the world? Are you participating in your vision or are you letting people fill it up for you? Are you the educated poor? If today is the last day you are living, what would you be doing?

Look forward to see your comments.

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.