Debt relief specialist says hit show highlights need to educate and that financial planners can play a key role
Squid Game is terrifying on so many levels, but one debt expert believes the hit show provides core money lessons advisors can utilise with clients.
Based on a debt-ridden South Korea, the drama’s premise is of people in desperate financial trouble being given the chance to play games with millions of won at stake. Through these games, humans’ dog-eat-dog nature emerges and contestants start fighting and killing each other. In one game, the losers are shot dead; it’s that brutal.
However, if you look past the gruesome – and let’s face it, questionable story lines – there are financial lessons everyone would all do well to adhere to. They are different challenges to those that high-net-worth advisors face, but for fee-based financial planners who often deal with clients in dire straits, they are fundamental.
Taz Rajan, of debt relief specialists Bromwich+Smith, watched the show and immediately thought back to when she went through bankruptcy herself. At that moment, she told Wealth Professional, you feel alone and that everybody else has got it together except you.
“There’s so much shame and stigma,” she said. “It's part of why we don't reach out for help and why we don't talk about it, because we think we're the only ones. That's an important takeaway from the show – there are hundreds [of people in debt] in Squid Game so, clearly, you are not alone. I hope that might relieve some of the shame and stigma, so we can just start talking about debt and how we get out of it.”
Rajan highlighted four lessons to take from Squid Game that planners can use with clients. The first is to pay off debt yourself, whether that’s literally on your own or by seeking professional help. The main character, feeling the pressure, resorts to stealing and gambling. Rajan added: “In Canada, it isn't this extreme. But we have collection agencies and it can feel like it’s almost life-threatening.”
The show also emphasises the importance of spending money wisely. How are clients spending their money, and when or where are they spending their cash? Tied to this, as shown by a character whose mom get sick and needs an operation, is the importance of having savings and an emergency fund. Rajan explained: “Life happens and as we’ve seen with the pandemic, nobody expected this to last as long, nobody thought their job would be on the line or that their business would suffer like this. The one thing I know about emergencies is that there is always one somewhere along the way, lurking around the corner.”
The big lesson, though, is knowing when to ask for help when in financial trouble. Squid Game’s main protagonist turns to his friend and ex-wife and gets a bloody nose for his troubles. Rajan said: “Asking for help is one of the most courageous things we can do. But is it right to turn to friends or family or to hide payday loans?”
Advisors and financial planners, as well as debt specialists, can help. Fee-based services are ideal for many people in trouble as they are not tied to any particular investment or insurance – and they can educate clients around things like budgeting and identifying where you are wasting money.
Half of all Canadians admit they don't even know how to create a budget so, in this information age, there are many things planners can do from a self-help perspective to get people looking at their finances even before seeking out an expert.
Rajan said: “Look at the past three months of bank statements and look at what your clients are spending on gas, on housing, on eating out. Work out what the past has looked like, build an actual budget and look at where you’re going, and what you’re projecting. Make that a living document where every week you check back in and, for example, see that gas prices went up so you have to spend a little less on eating out.”
She added that it’s vital an emergency fund forms part of this. “It feels in the moment like you're stealing from yourself, but you're actually helping your future self. After the budget, the emergency fund, then we can start looking at long-term things like retirement and disability.”
