What is your client's money story?

May 30, 2023

Let me start by sharing a real-life experience and the reaction on social media.

The story begins with an individual ordering a sandwich on Swiggy. Let’s call him Kiran.

Kiran was telling me how one has to budget for a higher amount when opting for the convenience of an online delivery. And yes, convenience comes at a steep cost. This is what Kiran showed me on his Swiggy account:

  • Sandwich: Rs 138.09
  • Packing: Rs 25
  • Delivery Partner Fee: Rs 51
  • Taxes: Rs 6.90
  • Tip: Rs 70

I posted this on Twitter with just one statement: A 138 sandwich is now Rs 291!

Well, the comments were brutal. Not surprising, as people love to outrage on social media. People questioned as to why the individual could not make a sandwich at home. Labelled the person as lazy. They wondered who would order a sandwich that costs so much. And I was even accused of spreading “fake news” and maligning Swiggy.

While I was flummoxed at the judgement received, I want to focus only on one aspect – the money angle. Majority had a huge problem with the Rs 70 tip. There were sarcastic remarks about it as well as Kiran being called stupid (for being so generous).

This incident reiterated how personal people get when the subject is money.

Money is a touchy subject filled with value judgements.

Now let me give you the other side of the story by telling you something about Kiran.

Kiran is a well-to-do senior citizen whose children reside elsewhere. Could not step out due to a sprained ankle and was in a fair bit of pain. He does not have a car or a driver who he could direct to go pick it up. The house help who comes during the day was ill. The cook only comes thrice a week and that was her day off.

Kiran really felt the urge to have a veg grilled sandwich and decided to order for it. I guess that demolishes the lazy accusation. But the bone of contention was about Kiran paying Rs 70 as a tip for a sandwich that costs Rs 138.

I know Kiran and I do know that he firmly believes in using money as a means to give back to society. Kiran is of the opinion that if he does not help the individuals who make his life more easy, he is being selfish and self-centred.

I have seen Kiran tip the Urban Clap staff lavishly. He is always sending food for the watchman. When the municipal workers were doing up the road, he ordered samosas for all of them. He pays the househelp well, and whatever is cooked for him, he often shares with them.

The default tip that is set on the Swiggy app is at Rs 70. The logic being, whether the dish costs Rs 1,000 or Rs 100, the individual had to make the same effort to go and pick it up and drive in the hot sun and traffic to come deliver it at your doorstep. He believes that they deserve at least Rs 70 as the tip.

In Kiran’s case, there was something else that I noticed. “I think about these young men who deliver the food to my house, and they can’t afford to eat such food or even buy it for their children. How bad they must feel.”

When he told me that, I could see what a sensitive human being he is, but I also picked up something else. I believe there is some amount of guilt at his privilege that motivated the lavish spending on those lower down the economic ladder.

It is not just about spending, it is also about investing. Why are investment decisions are justified by emotion, and not logic? Innumerable times I have seen individuals invest because they “have a good feel” about the stock. Or the next big theme has caught their attention and they get carried away by the frenzied narrative. Or, they sell in haste because they are afraid that they will lose all their money. Or, they stay away from stocks cause they saw their parents lose money there.

So what does this tell you about your clients?

  • All have a money story that gets manifested in various ways.
  • Their relationship with money is deeply personal. Because it is personal, it is emotional. Because it is emotional, there are many layers and facets to it.
  • Every money decision brings out an intricate web of motives, interests, passions, desires, needs and compassion.

If you are curious about your client's relationship with money, have this conversation.

  • Ask them: Why do you work so hard to accumulate money? What is it that you want from your money?

Money is a tool – like a hammer, like a chisel, like a scissors, like Zoom. It is there to serve a purpose. Money is a transaction tool. Its purpose is to get you what you desire. It could be status, security, lifestyle, experiences, convenience, a home, a car, a holiday, an iPhone, mental peace… you get the gist. Money is never an end in itself. If money is an end in itself, then you will never have enough. You will never be satisfied. The purpose of money is to support well-being and empower you.

  • Ask them: How do you feel when you spend money?

The way money is spent and managed is individualistic. Shaped by experiences, upbringing, emotions, view on society, and religious beliefs. They may feel absolutely no guilt at buying a bag that sets them back by many thousands but will cringe at the cost of replacing the old upholstery at home. They may enjoy a lavish meal at a restaurant and run up a gigantic bill, but will not pay more than 10% as a tip, however great the service.

  • Ask them: Where do they get the most satisfaction?

Some get joy when using their money to help others. Others may find fulfilment is spending on numerous outings and vacations in a year. A few may prefer just spending it on wining and dining.

Knowing their emotional drivers will help you get to the root of the issue and improve their relationship with money. And will help you obtain a better comprehension of the money dynamics in their behaviour patterns.

More on Behavioural Finance

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Larissa Fernand is an Investment Specialist and Senior Editor at Morningstar India. You can follow her on Twitter

Add a Comment
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Sandeep Gandhi
Jun 13 2023 09:29 PM
Very well articulated article. I fully agree that money is a medium of exchange and every individual has a right to use it the way they feel most comfortable to their ideology!
Keep it up Larissa!!
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