The results of a behavioural experiment show some Australians will go to almost any lengths to get their hands on cold hard cash, especially when presented with the ultimate financial fantasy, a money tree.
The experiment was conducted to identify how Australians react to money they can see and touch, compared to the way they treat their actual savings, which often sit untouched in transaction accounts and low interest paying savings accounts that incredibly still have fees and charges.
Hundreds of people passed the money tree, which was ‘planted' in Fleet Park in Sydney's famous Rocks area, containing $5 notes. The experiment, sponsored by RaboDirect, the straight-talking online bank, was filmed by hidden cameras. After a slow start where bystanders ignored the cash or simply took pictures of it, the tree was stripped bare in less than three hours as opportunistic passers-by worked together and employed various means to maximise their financial gains.
The results of the experiment are borne out of figures from RaboDirect's soon-to-be-released National Savings Survey, which reveals Australians are missing out on a massive $4.7 billion in lost interest each year*. That's the equivalent of over 1.5 thousand private islands – a private island in Gippsland Lakes in the Fraser Island region of Queensland sold for $2.8 million in February this year**.
So, what happened? Watch the ‘Money Tree' video and register for tips that can help you make your money grow at www.RaboDirect.com.au/moneytree.
Psychologist and financial decision-making expert, Rob Hall, closely monitored and analysed the behavioural experiment. He said: “The world of money exists in many forms that are rarely understood. Shares, savings and interest rates seem remote; cash on the other hand is the substance of dreams. The Money Tree brought dreams and reality together which for some meant making the most of the opportunity; a behaviour in stark contrast to the way in which many people treat the money in their accounts.”
RaboDirect general manager Greg McAweeney said he couldn't believe the difference between the way most participants responded to the Money Tree, compared to the way they treat the money in their accounts. “There are unbelievable opportunities for Australians to maximise their savings by switching from transaction accounts to high interest bearing accounts like RaboDirect's High Interest Savings Account which is currently paying a variable rate of 6.40% p.a.^ on new deposits. This is currently the highest on-call rate in the market and is in our view the best product available for people looking to activate and grow their money,” he said.
Rob Hall said unlike the participants in the study, many people miss out on financial opportunities as they fail to take the time to investigate what's available to them and they worry about making a decision to act. “Many of us will walk through life waiting for the next money tree or Lotto win, instead of earning our share of the $4.7 billion in interest available to us,” he said.
RaboDirect is calling on Australians to wake up their lazy savings and move their money to an account that pays a higher rate of interest.
The Experiment: An Overview of Responses
Lost Opportunity
In the early stages, almost 100 people passed the tree without noticing that anything was different. Even when a group of joggers noticed, they were too busy to stop. The first groups who eventually stopped to interact couldn't believe it. They inspected the notes and took pictures, but left empty handed.
Follow the Crowd
Only once one brave participant started taking the money, did momentum gather. Legitimised by the crowd, a wide spectrum of behaviour ensued.
Frugality
Some took just one or two notes, satisfied by their modest and unexpected gains.
Opportunist
Consumed by the fantasy, a group of braver participants made the most of the opportunity by filling their pockets.
Employing Tools and Working Together
When the low hanging $5 notes were depleted, participants employed tools such as swinging coats and umbrellas, to help them reach higher branches. Teamwork also came into play as spectators formed human pyramids to reach the notes seemingly out of reach.
Altruism
Perhaps the most comforting observation from the participants was that of altruism. Taller participants shared their earnings with shorter spectators, while one gentleman on identifying the undercover observation team, requested his money be donated to charity.
