Finance Lessons from Cinema

Today we turn to the arts for inspiration. Movies can entertain, but they can also inform. You will be surprised to find the personal finance lessons hidden within some of the world’s classic films.

 

BETTER TO BE LUCKY THAN GOOD

The Movie: Barfly

This is a great movie if you’re a fan of drinking or drinking-related mayhem or Mickey Rourke. This semi-biography of poet/author Charles Bukowski can be a wild, confusing, but very entertaining ride.

The Scene:

Our protagonist Henry (played by Rourke) is attacked by his neighbor with a knife. As Henry struggles for his life, he manages to twist the knife, which then plunges into his attacker’s stomach. Henry is able to escape, but as he’s leaving, the man curses him, implying Henry is only alive because he got lucky:

Neighbor: Nothing but dumb luck, [really bad word]
Henry: Yeah, but that counts too.

If you’ve been invested in the stock market for the last ten years or so, you may be feeling great. Smart too. Your money may have doubled or trebled or more. You might be tempted to think you’re an outstanding investor.

I’m sorry to say that the lion’s share of your great run may be due not to your brilliance as an investor, but rather (among other things) to the trillions of dollars of quantitative easing we’ve seen since the Great Recession. But you know what? That counts too.

It’s really important to be aware when good fortune is the result of luck, rather than skill. But that good fortune counts and can be a really important part of reaching your financial goals.

 

AGELESS YOUTH (AND CARS)

The Movie: Dazed and Confused

Ah yes, the movie that gifted the world with Matthew McConaughey – we’ve been richer by far ever since. This is a funny movie, and some (see Tarantino, Quentin) consider it a classic. It’s worth a view, but I believe the world is already firmly divided between 1) people who have seen it many times and 2) people who have never & will never see it.

The Scene:

Wooderson (played by thespian McConaughey) is an older guy who never left high school behind. He serves as a Muse of sorts to the teenagers in the film:

Wooderson: That’s what I love about these high school girls: I get older, they stay the same age.

Well, that certainly sounds disturbing. But if you look a little deeper, it’s actually revealed as a personal finance parable.

Because my car feels this sentiment daily. Yours should too.

Every day, I pass an almost endless line of new luxury cars (Mercedes, Lexus, Tesla, Audi, and BMW among them) as I pick up my son from school. There’s almost always a few with dealer plates still on them. Six years have passed, but the other cars haven’t gotten any older. (And I fear my 2012 model may be as creepy to them as Wooderson was to high school girls…).

A car is a terrible investment, so the less you spend on it and the the longer you go between purchases, the better. You can’t stop other people from being silly, though: Your car gets older, everyone else’s stays the same age.

 

THE POINTLESS QUEST FOR PRECISION

The Movie: Napoleon Dynamite

The Scene:

Uncle Rico, voted by the staff of Asset-Based Life as one of the greatest movie characters ever, has made a video of his football throwing skills. He wants to show it to Kip and Napoleon to showcase how, if time-travel were possible, he could go back and win the high school state championship. Napoleon is not impressed:

Napoleon: This is pretty much the worst video ever made.
Kip: Napoleon, like anyone can even know that.

I am often reminded of Kip’s sage counsel in personal finance discussions. So many questions seek answers of omniscient precision. Often, that’s simply not possible, and that uncertainty should make us consider ranges and scenarios rather than chase a single perfect answer.

How much life insurance do I need for the next twenty years? Exactly how much do I need to retire? What will health care cost when I am old? Like anyone can even know that.

 

The stories of the silver screen are exciting and entertaining to watch, but they also teach us much about life. While personal finance would seem a world apart from the entertainment realm, if you squint hard enough, the lessons are everywhere 🙂

 

What are the greatest lessons (personal finance or broader life) you’ve learned from movies? Do you agree that Napoleon Dynamite was robbed by the Academy? Let me know in the comments.