I'm sure most of you have watched or at least heard of the Korean Netflix series, "Squid Game." For those who haven't watched, I won't spoil it for you but the basic premise is about class disparity and the economic struggles of those who are burdened by a debt. I thought the show also demonstrates the decisions you should NOT make to land yourself in situations like those who end up as contestants in the Squid Game. Without further ado, let's jump into 5 Money Lessons to avoid LIKE THE PLAGUE.
Money Lesson #1: Rich Quick Schemes don't Exist
We are showered with countless Rich Quick schemes on Social Media, with promises that will make you millions of dollars with just a small investment... Most often than not, such Rich Quick schemes don't actually work and you end up losing money as you would have made an investment without seeing any sort of returns, let alone millions of dollars.
Such lures are all around us, including gambling. The main character, Gi Hun in Squid Game is a gambling addict, where he would go as far as stealing his mother's money to make bets on horse racing. While he ends up winning some money, he ultimately loses it all in the end.
If you are into gambling, it's the hope that you can make it big on the slot machine or a bet on the roulette at a casino that is so addicting and enticing. One should know that each game you play at a casino has a statistical probability against you winning. There is that saying, "The House always wins," as the chance of you winning big at a casino is close to zero.
There is always the harmless hope of also winning the jackpot at a lottery. Is it really harmless? The hope (or delusion?) that you can be a multimillion by buying a $20 lotto ticket is deterimental to your mindset about money and ability to become successful. Let's say that you do happen to win the lottery (which is less likely that you being hit by lightening), there has often been cases where lotto winners actually end up losing their winnings in a couple of years because they never learned to manage their money! That being said...
Money Lesson #2: Learn to Manage your Money
There is no meaning to having millions of dollars if you spend millions and end up not having any savings whatsoever. You ultimately want to build wealth that can continue to generate money in your sleep, whether they are investments in the stock market, real estate, or your own business. However, most people are drawn into spending money on "material or superficial" things that are nice to look at but has no provide practical benefits.
This is shown by Gi-Hun's money habits in which he has no money of his own, and when he did win some money gambling, he would think of ways to spend it all instead of saving it or paying off his debt.
For more tips on managing your money, check out my post: Money Management 101 | Follow these steps to start Saving Money.
Money Lesson #3: Don't be Greedy with Money
If you get on the wrong side of Money and let it take over you, you can end up making some really bad decisions that can ultimately devastate your life. In the case of Sang Woo, he graduated from a prestigious university and was a successful investment banker. However, greed got the better of him. He ended up stealing money from his clients and lost it all in the stock market. Sang Woo lost everything he worked on up to that point, such as his career, money, and reputation.
This is not a rare case, in fact, greed shows up very often - especially in the stock market. Being blinded by a single lucky stroke in the stock market can make you believe that you can read the market. You can be convinced that investing in a single stock or option can make you rich, and your conviction can lead you to become leveraged in your positions. There has been many cases in which people lose everything they own in the stock market from such greed and unrealistic expectation to be struck rich from a single investment where they bet everything they have. That is why diversification is key because one can never predict the market accurately most of the time.
Money Lesson #4: Don't Put all your Eggs in One Basket
One of the key lessons in investing is diversification. With the uncertainty of the future, there are always unexpected turn of events that one may have never predicted. That is why investing in one stock or one industry is so risky because if an unseen variable pops out of nowhere that tanks the stock or industry - your portfolio will tank as well and ou would have no back up.
Do not take risk that you are unable to handle if you end up losing it all, because there is always that probability that it might happen. Especially, don't take on a leveraged position if you are betting everything you have or making a bet you can't afford to be wrong.
Money Lesson #5: Bad Debt can lead to Financial Pitfalls
Last but not least, taking on "bad debt" can lead to your financial demise if you go into debt buying things you can't afford (aka liabilities). People get sucked into the material things of the world, where you want the latest gadgets and a nice car. If you have the means, then go for it! Otherwise, if you are going into debt to buy "things," then think again about the potential consequences before succumbing to the momentary dopamine hit of buying high ticket items.
Ultimately, DEBT is what lead the contestants to voluntarily enter into the Squid Game competition. They were leading a life of constant stress and fear of the collectors who would harrass them to pay off their debt.
I won't say all debt is bad as there are ways to leverage debt to buy assets that generate income streams for you, such as investing in the stock market, your own business, or real estate properties. The outcome of these investments can be in the form of capital gains, dividends, profits, and rental income. However, one needs to take calculated risk in which you have done your due diligence, research, and sufficient planning of your investment, as well as consider the possibilities of your investment not doing so well. In this case, you have covered your "behind" in case shit hits the fan (excuse my French). This way, you can avoid being in situations like Squid Game.
Related Posts to keep you Money Smart:
money lessons from squid game,squid game,money lessons,money lessons i learned,money lessons you need to know,money lessons from my 20s,money mistakes,money mistakes to avoid in your 20s,financial literacy,financial lessons,financial lessons from squid game,personal finance,investing,gabrielle lee tax manager,squid game netflix,korean