Wallet Share – You Don’t Know This Trap!

Am I carrying an invisible burden?

Yes. You are!

Many people buy their own house because paying rent every month is a burden. Rent is a visible burden on our eyes. There are some other monthly charges like house rent. But we bear those charges without even thinking that it is a burden. For example, OTT charges like Netflix, WIFI connection charges, mobile recharge, credit card EMI, car EMI, and some other unnecessary expenses are a form of burden that we overlook.

We feel burdened when paying house rent. But why the above costs do not seem heavy to our eyes?

Because the business world has created a mystical image of these costs to such an extent that they don’t seem like a huge burden.

Today let us understand how companies try to exploit you for their Wallet Shares!

Table of Contents

1. What is Wallet Share or Share of Wallet?
2. Is Wallet Share a Conspiracy?
3. Wallet Share Vs Investment Share
I. Need Vs Desire
II. Non-essential expenses
III. Cola drinks
IV. OTT Service Subscriptions
4. Warren Buffett’s Advice
5. Conclusion

1. What is Wallet Share or Share of Wallet?

It is your own Wallet. But corporate companies and famous brands discuss in their boardroom to take a share from your wallet without you objecting to it.

It is your own money but corporates plan and execute to extract a share without any objection from you.

2. Is Wallet Share a Conspiracy?

An individual incurs many expenses from his monthly income. Those costs come as income for many businesses. Every business entity wants to milk the maximum from an individual’s monthly income for their company. Do you know how much a company thinks to make you spend more and increase your wallet share?

For example, have you ever noticed that the mouth in the toothpaste tube that you buy has a large opening in it? Will you believe me if I say that it is done on purpose to make you spend too much toothpaste? Yes! This plan is designed to get you to buy toothpaste more often.

The mobile recharge plan is for 28 days instead of for a month It costs only 12 recharges per month. ’28 ‘Day Plan’ can make you spend 13 recharges. This is how companies make us spend more without us knowing it.

‘Wallet Share’ is when we set aside a share from our income for a particular brand without even realizing it. Every company wants to get more wallet shares. Instead of gaining the trust of customers by giving more utility for the money spent, they hide your eyes and make you spend more and more from your Wallet for them. There is no doubt that this plan is a magic net to trap you!

3. Wallet Share Vs Investment Share

Let’s see how to maximize investment share for the future by saving money and not falling into the Wallet Share Trap of corporates.

I.) Need Vs Desire

A state of alertness that we have while spending for our essential needs is absent when we spend for discretionary expenses.

Once the Netflix company made a tweet. They mentioned that their biggest enemy was sleep. That means Netflix has succeeded in getting a large portion of people’s waking hours into watching shows on Netflix. If they want to expand their business more, the sleep of their customers should be reduced.

Similarly, the Coke company said that its first competitor was ‘water’. This is a plan to push people into drinking Coke as a substitute for water. As a result, today we can see that many restaurants offer coke with the food ordered in a ‘combo offer’. This is how we succumb to the Wallet Share trap laid by giant brands!

II.) Non-essential expenses

If we take a little look at our monthly expenses, it is easy to make efforts to avoid expenses that are unnecessary in day-to-day life.

We all can agree that Smoking is an unnecessary expense. The money spent on this can be saved for other important financial goals. Right?

Now let’s see how much smoking drains our money.

cost of a pack of cigarettes	₹ 300
purchase packets per month	₹ 15
The monthly cost of cigarettes	₹ 4500
Annual cigarette expenditure	₹ 54,000
annual cigarette price increase	12%
Total expenditure on cigarettes in 30 years	₹ 1.30 Crore

Let’s Invest the cost of cigarettes in the above list in an equity fund and we can see how much money we can gain.

monthly SIP amount	₹ 4500
Annual Step-Up SIP	12%
Investment tenure	30 years
Final Value of Investment:
8% Annual Growth	₹ 2.89 Crores
10% Annual Growth	₹ 3.77 Crores
12% Annual Growth	₹ 5.05 Crores
15% Annual Growth	₹ 8.27 Crores

You may understand by now how a small, invisible expense like smoking can turn into an investment of value. Can other similar expenses be turned into investments?

III.) Cola drinks

Cost of 2.25-liter Cola Bottle	₹ 100
One month’s expense. (Assuming one bottle per week)	₹ 400
Investing in SIP for 30 years (assumed inflation rate of 6% per annum for stepping up SIP)	₹ 3.79 lakh.
Total amount at the end of 30 years (Assuming 12% annual interest)	₹ 23 lakh

Can you imagine that you can gain 23 lakhs by just not drinking Coca-Cola?

IV. ) OTT Service Subscriptions

Cost of Premium OTT Plan for a month	₹ 650
Amount Spend for 30 years(Assuming 8% inflation)	₹ 8.83 lakh
Same amount invested in SIP for 30 years( assuming 12% annual return)	₹ 46.03 lakhs

Like how small flowers together form a huge beautiful garland, if we pay attention to unnecessary expenses which are falling into the trap of wallet shares and divert them to our investment shares, then there is no doubt that our finances will grow to become a beautiful garland.

Have you noticed this? Always small things make a huge difference!

4. Warren Buffett’s Advice

What is Warren Buffett’s advice to us not to fall prey to the wallet share?

“Do Not Save What Is Left After Spending, Spend What Is Left After Saving”

The idea is to set aside a predetermined amount from your income for savings or investments first. After taking care of your financial future, you can spend the remaining sum on your needs and wants. This approach ensures your financial goals, like retirement or emergency funds, are on track, while still allowing you to enjoy life within your means.

We think that we get trapped in this Wallet Share because we choose to spend. But the truth is that it is not about spending but ignoring the virtue of saving! When you know how much to save then the remaining amount will be spent in a very controlled manner.

When your priority is saving, then you don’t have to force yourself to spend your money in a calculated way, rather, it becomes a very organic process.

5. Conclusion

The modern world has enough business tactics that ensure that it milks the maximum money from your pockets. Even though you cannot ignore using the services provided by these companies. But as customers, you should be aware of all the possibilities in which you are exploited.

Being self-aware is the first step to fighting these practices that are unhealthy for the environment and your finances. Wallet Share is just an idea, but to implement that idea, companies use very cheap tactics that leave a dent in customer’s pockets.

The first step in fighting against these exploitations is to become aware of the changes happening around our surroundings and in the financial market. As consumers, we are obliged to take a moral stand against brands that break the trust of their customers!