Five financial lessons from Squid Games

Squid Games, the mega hit survival drama is an accurate representation of how you can lose everything in the pursuit of getting rich quickly.

 

Netflix’s biggest hit show Squid Games is about 456 indebted individuals playing childrens’ games in a deadly contest to win a huge cash prize. With each episode, the show raises an alarm on taking extreme risks and subtly highlights the importance of financial discipline.


Along with all the edge of the seat drama and bloodshed, the South Korean show had several references to investment. 


Image credit: Mathieu Stern, Unsplash


Pay off debts

In the very first episode, the show’s protagonist Seong Gi-hun, who is financially dependent on his mother, steals her ATM card to withdraw money just so that he can gamble on horse racing. And when he, by pure luck finally does end up winning, he tries to run away with the money instead of paying off his debt. This leads to his money being stolen by Kang Sae-byeok, while running away from the loan sharks. 


The golden rule of managing finances is to spend it first on essentials, pay off debts and save the rest for the future. It always helps to follow accurate bookkeeping and keep a track of your liabilities and expenses.


Stay off gambling

Seong Gi-hun is addicted to gambling, and he is seen betting his money on horse racing in the early episodes. In another episode, one of the contestants, Cho Sang-Woo, talks about losing his client’s money while making risky investments.


Image credit: Jonas Augustin, Unsplash


Both these contestants wished to make money quickly, without making an earnest effort towards it. Just like the way it is represented on the show, in life too, you may end up losing money if you don’t research the stocks before investing. So, instead of relying on what is popular, read up and always ensure you have ascertained the risk attached to the investment. “Get rich quick” schemes do not work. Be patient with the process because creating wealth takes time. 


Keep up with your insurance commitments

Seong’s life is extremely anxiety-inducing, especially going by the way he spends his money. In episode 2, he cancels his ailing mother’s insurance. If he had made his monthly payments on time, he could have used the fund to treat his mother.


This shows how foolish it is to ignore insurance payments. This is all the more important during the pandemic. The episode is a stark reminder of how no one can guess the next tragedy and that it is best to stay protected by signing up for a health insurance policy.


Don’t keep all your eggs in the same basket

In episode 3, when individuals are asked to pick between four shapes - umbrella, circle, star and triangle, banker Cho Sang-Woo, who had previously lost all of his clients’ money in the market, asks his team members to choose different shapes.


He remarks that it would put them at a disadvantage if they all chose one shape. “There’s this saying in investing, try not to keep your eggs in the same basket,” he remarks. He is proved right later on, when the game’s organisers explain the task of cutting the shapes out of a honeycomb cookie. 


Cho Sang-Woo’s strategy ensured that not everyone chose the toughest shape, which in turn lowered the risk shouldered by the team. 


Spreading your risk



The parallel between investing and the show was quite obvious here, especially in the honeycomb game. The circle represents safe and low risk investments, while the triangle stands for low to medium risk. 


The star embodies equities which are generally riskier than bonds, whereas the umbrella denotes alternative streams of investments such as private equity, commodities and real estate.


Spreading your risk between different asset classes is significant. Of course, it is also recommended that you invest on a regular basis to reduce the risk caused by volatility in the market. The best approach is to invest keeping the long run in mind, even during the rocky phases since market crashes over time will only look like small bumps in the graph. 

 

The weak financial choices that the characters in Squid Games make, push them to a point of no return. Subsequently, they resort to desperate measures which in this case involved the betting of their own life to make money. Thus, this show serves as a reminder on how one should be wise with their investments instead of gambling it away or splurging it on unnecessary things. 


 

Edited by Roshni Shroff


Cover image illustration by Pratyush Thaker

 

Some resources and links to help you understand more about Squid Games: 


Squid Game on Netflix: Everything to know about the disturbing breakout hit


How the Korean Wave is making a splash in the entertainment industry