What investors can learn from "Squid Game"

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Today’s article is a little different as I take a look at the rise of Squid Game and what this means for investors, from two very different angles.

Stock Owners

Netflix $NFLX hit a new all time high of $646.84 on Thursday of this week with investors optimistic that the company can still produce hits capable of growing its subscriber base.

The main champion here is of course Squid Game, the viral hit that has planted itself at #1 on the service in more than 80 countries, including many English speaking countries, despite being a Korean-language drama. Squid Game ranked number one in the United States just four days after its release which is faster than any other non-English series.

Earlier this year, Netflix launched a plan worth $700 million into building its Korean content and it appears that the investment is already paying off. It’s been so popular that an internet provider in South Korea is even suing Netflix for usage fees due to the internet traffic that has resulted from streaming of the series.

Netflix shareholders weren't the only shareholders to benefit from the rise of Squid Game as Roblox $RBLX game creators have rushed to create numerous gaming experiences mimicking Squid Game. 

It is notable that a Roblox game creator can create an experience and take advantage of notable events in a very short space of time. It is also clear that there is a significant overlap between Netflix users and gamers which makes it no surprise that Netflix recently bought video game creator Night School Studio. As Netflix builds its intellectual property (IP) from its movies and tv shows, gaming will offer an additional avenue to monetise much like Disney $DIS and it’s theme parks.

Retail Investors

Here is how to avoid becoming a potential candidate for a second series of the show (may contain spoilers)

As we saw throughout the show, the mismanagement of personal capital can have vast repercussions not only on personal health, but also on that of the people who are all around us.

1. Only spend what you earn

Here are some tips to prevent spending from exceeding your income:

  • Reduce unnecessary expenses or even services that are not necessary or used very little eg Netflix 👀

  • Make a budget. A simple model for you to manage your own personal capital is to use the 50-30-20 rule. The idea is to allocate 20% to an investment or savings; 50% to basic needs (food) and 30% to personal wants (nights out).

  • Have an emergency fund. This can be taken from the money that is destined for savings. The general rule is between 3 and 6 months worth of living expenses depending on your own risk tolerance. As with several characters in the show, when faced with illnesses or special cases, they cannot finance a service.

I expand on these points in How to Start Investing if you are interested in reading further.

2. Get out of debt

A number of the characters in the show receive constant calls and are harassed to pay off their debts. If you start to accumulate interest or even fall into an overdue debt, this is not something you can solve overnight. However, with planning and discipline you can return to a positive balance.

  • Analyze how much you have to pay. The main character of the series constantly asks for loans without first considering whether he will be able to pay them back. 

  • Find an extra income. Remote working and the rise of the gig economy means that it is possible to earn an extra income from anywhere in the world provided you have an internet connection. Companies like Fiverr $FVRR can empower individuals in this regard.

  • Do not fall into the trap of taking on debt to pay debt. Most of the people who do not get out of their debts have the habit of accepting loans while paying some others, so it only increases their debts and lengthens the period of their payments. Instead of taking out an initial loan, could the protagonists have availed from the rise of “Buy Now, Pay Later” options from the likes of Affirm $AFRM or After Pay $SQ? 🤔

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Happy investing

Wolf of Harcourt Street

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Disclaimer: I am not a financial adviser and I am not here to give specific financial advice. The opinions expressed are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. The information is based on personal opinion and experience, it should not be considered professional financial investment advice. There is no substitute for doing your own due diligence and building your own conviction when it comes to investing.