[Estimated time to read: 4 minutes]
Warning: This post is dark and full of twists
After months of agonizing, Game of Thrones is back…
Fans are gathering to their screens.
But who says we can only learn about politics, skilful scheming and emotional manipulation from Game of Thrones?
The HBO series, adapted from the book series A Song of Ice and Fire, also sends a compelling financial message.
In this blog, we outline the financial lessons you can learn from Game of Thrones and how they relate to your financial planning.
1. Think with your head – not your heart
Everything in Game of Thrones is driven by a desire for power or revenge.
Almost every character makes emotional decisions.
To succeed, you have to keep your head in the game.
Investor behaviour is one of the greatest factors in determining returns (in normal markets it is the most substantial but offshore it is sometimes matched by costs).
If you buy when things are good, investments are doing well and you end up paying more.
If you sell when things are bad (on sale), investments are cheaper so you get less money than what you originally invested.
The key is to be disciplined – don’t react to the markets as this is irrational investing behaviour.
Make a plan and stick to it.
2. “I’ve seen it in the fire” – says your market guru
If you’ve seen the first episode of Season 6, you already know what has become of Stannis Baratheon who believed in Melisandre’s prophecies made from ashes and smoke.
And you see where that landed him…
In the marketplace, many people are pretending to be experts at reading signs and market movements. Should you believe them?
Every single day, global investment markets provide researchers with billions of data points for understanding how people make choices when resources are at stake and the outcome is unknown.
There really is no way to know.
Accept that markets are generally efficient and that sound financial planning means regularly saving money for a rainy day in high quality, low cost funds without contractual lock in periods.
3. Winter is coming
Every Game of Throne fan knows the House Stark motto by heart, and the message is pretty clear.
With winter comes the White Walkers and their army of the living dead, and preparation is necessary to survive.
In the realm of finance, we call this preparation your ‘emergency fund’. Winter is always looming.
It can be a financial crisis, a natural disaster, unemployment, a disability or even untimely death.
When they come, make sure you are prepared.
4. A Lannister always pays his debts
And so should you.
Being debt-free can provide financial freedom, and naturally, having a lot of debt can leave your finances in disarray.
Don’t live beyond your means as this makes it hard to achieve your goals.
Although the Lannisters always pay their debts, the same might not be said after the death of Lord Tywin, the Lannister patriarch.
In consequence, don’t be surprised to see if the Lannisters lose their grip on the Iron Throne sooner rather than later.
5. The fall of Winterfell: protect your assets
Winterfell fell into the hands of the Ironborn, led by former Stark ward Theon Greyjoy.
Although misplaced trust is key here, we can say the King in the North, Robb Stark, didn’t protect his assets and family well enough.
Marching south and winning every battle, he failed to build a strong fence around some of his most prized possessions.
So make sure you build on the right foundations when it comes to your finances. Get insurance for you and your family, your home or your business; ensure your assets are well-diversified; and if you are an expatriate ALWAYS put your assets in an offshore account.
6. When you play the Game of Thrones, you win or you die
Risk is inevitable when it comes to investing.
The key is to make the right choices and assess your tolerance to risk.
Before you invest, make sure you know how much risk you can take, and understand how these risks can affect your gains.
Doing nothing erodes your capital because of inflation so the soon you begin the better.
7. Never put your trust in the wrong people
Remember Robb Stark’s atrocious murder?
Or Jon Snow’s ambiguous death (we’re still keeping our fingers crossed that Jon Snow lives!)?
Trusting in the wrong people can cost you your life.
And trusting in the wrong financial planner can cost you your whole life’s savings. Although it is quite difficult to assess who you should trust in Westeros as characters always plot betrayal after betrayal, this is relatively easier in the realm of finance. Or is it?
Choose a regulated financial planner and check their credentials and track record.
They might just be offshore financial salesmen disguised as regulated financial advisers, scheming a betrayal once you’ve taken the bait.
The world of international financial advice can be as murky as the realm of Game of Thrones, so put your trust in the right place.