Spoiler: These flicks will teach you how NOT to handle your money.
We often turn to movies for an escape, but many can teach us some valuable life lessons – especially when it to comes to managing money. From the disastrous effects of greed and corruption to the dangers of instant gratification, there are lots of movies with powerful financial lessons.
Whether you're planning a movie marathon this weekend or just want to tune in to a movie that will give you a fresh perspective, take your pick of any of these five films that deal with money matters.
1. “The Money Pit”
This popular '80s movie is the perfect example of homebuyers making an emotional decision versus a more rational one. The stars of the movie, Tom Hanks and Shelley Long, rush into purchasing their dream home because they are enamored by the seller. In truth, they should have done more research about the property. Being unprepared for all the house repairs needed left them throwing away their hard-earned dollars into a money pit.
Lessons learned: If you're thinking about buying a new home or are a first-time homebuyer, make sure you do your homework about the property and the homebuying process. Don't make emotional decisions at any stage of the buying process, and create a realistic budget to negotiate based on what you can truly afford.
2. “Wall Street”
In the 1987 film “Wall Street,” young stockbroker Bud Fox, played by Charlie Sheen, falls in love with the flashy lifestyle of the rich and powerful. Fox spends money he doesn't have on an overpriced apartment and expensive art just to keep up with the Joneses. Fox’s entry-level stockbroker job can't sustain his spending spree, and he's forced to use insider trading to help pay his bills. This movie shows how much Wall Street traders might risk in order to keep up the appearance of success.
Lessons learned: Making an honest dollar will serve you well in the long run. Managing those dollars well with a budget and mindful spending – learning to live within your means – can prevent you from falling into the greed trap and even considering illegal activities to fund a lavish lifestyle.
3. “The Untouchables”
This movie starring Robert De Niro might just make you think twice about neglecting to file your income taxes. In this 1987 film about mob boss Al Capone, the FBI tries everything they can think of to put Al Capone behind bars. But despite the FBI's best efforts to put Capone away on serious charges like murder or racketeering, the government ultimately catches Capone on the simple charge of tax evasion. Al Capone is finally brought down, not by gun-toting FBI agents, but by accountants wielding ledger books.
Lessons learned: While you might not be a criminal kingpin, failing to file your income taxes can lead to a determination of tax evasion by the IRS – whether it was intentional or not – and will hurt your credit. You may also face fines, serve prison time and end up with a criminal record. File and pay your taxes on time to avoid penalties or an audit. Remember, you can always request an extension to file before tax day if you need some extra time.
4. “The Social Network”
The 2010 film “The Social Network” suggests that Mark Zuckerberg, the founder of Facebook, may have stolen the idea of Facebook from two brothers (the Winklevoss twins) who hired him to build a social network similar to Facebook. As depicted by the film, Zuckerberg (played by Jesse Eisenberg) and the Winklevoss twins did not have a formal employment contract that clearly specified any terms regarding intellectual property ownership or noncompetition. As a result, the Winklevosses and Zuckerberg battle it out in a series publicly humiliating lawsuits that eventually end in a costly settlement in favor of the Winklevoss twins.
Lessons learned: Take the time to learn about the legal side of running your business, and factor in costs for a lawyer or legal advice. Don't miss out on long-term entrepreneurial opportunities by mismanaging financial resources early in the game. Identify authentic friends and allies so you don't put your future business at risk. If you have a great entrepreneurial idea, make sure you take steps to safeguard intellectual property with the right legal contracts and documentation. Any type of invention, trade secrets and materials you have created could be stolen or misused by people who don't have your best interests in mind.
5. “The Wolf of Wall Street”
The 2013 film “The Wolf of Wall Street” follows the adventures of Jordan Belfort – a stockbroker who can sell anything to anyone. Belfort, played by Leonardo DiCaprio, learns early in his career that it doesn't matter whether his clients make money. His goal is to earn a big commission check without any regard to his client’s welfare. As a result, Belfort lures his clients into buying terrible stocks by promising them unrealistic profit margins and appealing to their greed. While his clients lose millions, Belfort becomes one of the richest men on Wall Street.
Lessons learned: Don't let the lure of instant gratification undermine your ability to make sound financial decisions. Whether you're investing in stocks or making big money decisions, turn to trusted experts and sources for insight so you don't have to make money through manipulation or scandals. If your financial advisor is paid by commission, think about how that may affect his or her investing recommendations.
By Sabah Karimi
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss.
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