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10 Unforgettable Financial Lessons From The Most Entertaining Wall-Street Movies

10 Unforgettable Financial Lessons From The Most Entertaining Wall-Street Movies

Stories of America’s financial hub never fail to captivate audiences. The New York Stock Exchange is crammed into four rooms, and Wall Street itself is less than a mile long. However, this hive is the center of the world’s financial activity, resulting in an average of 5.7 billion shares traded each day, according to recent numbers published by the Wall Street Journal. Margin Call, Arbitrage, and the recent Wolf of Wall Street thoroughly examine the fast paced decisions, complexities, and even savagery of life in this iconic financial hub. Business leaders have to consider how they’ll react under immense pressure to keep their organizations afloat and customers happy. The protagonists in the following movies must face high-risk decisions and ethical issues on a constant basis. Decisions that can significantly impact their personal and professional lives. Here are 10 takeaway lessons we can gain from these films.

1

    Lesson #1: Be Prepared to Face Significant Risks

    The film Margin Call highlights some of the extremely sobering potential risks faced by traders working for Wall Street firms. In this sink or swim drama, the decision makers at the firm discover that they have to sell off extremely toxic securities, or their organization will sink. However, offloading these securities will only push the crisis onto their partners and clients, severing trusting relationships that the firm has been developing for years. It is a harrowing study of what traders will do when faced with situations of immense risk. Employees watch as their peers are laid off left and right, as the surviving firm representatives accumulate mass amounts of wealth, as the crisis affects everyone around them. Margin Call serves as a strong reminder that large gains are often made at the severe expense of others.

    “I want you to hit every bit you can find. Dealers, brokers, clients, your mother, if she’s buying….The ground is shifting below our feet, and apparently, there’s no other way out.” – Sam Rogers, Margin Call

    2

      Lesson #2: Don’t Cook the Books

      Arbitrage attracted critical attention and acclaim in 2012 with its list of stars, including Richard Gere, Susan Sarandon, and Tim Roth. Gere’s character, Robert Miller, is an unsavory magnate whose history of fraud remains unknown to his family. He’s altered his company’s financial data to keep his criminal acts concealed. Miller is involved in a car accident that results in a fatality, and tries to minimize his involvement. The ensuing investigation brings several questions to the surface for his family members, who catch onto the fraudulent activity. While Miller never has to legally answer for his crimes, his relationships with his family members have been irrevocably damaged. Arbitrage serves as a stark reminder that unethical business practices can come back to bite you. They can negatively impact your personal life and relationships as well.

      “Nothing is beyond money for you, Robert. We both know that.” – Jimmy Grant, Arbitrage

      3

        Lesson #3: Don’t Let Success Get To Your Head

        The Wolf of Wall Street is the epitome of a financial cautionary tale, demonstrating the new lows people can sink to when they amass their own fortunes quickly on Wall Street. Stockbroker Jordan Belfort can’t handle the quick success, and he spirals out of control with drug use, sex, insane purchases, and scams. This film teaches us that the fast accumulation of wealth doesn’t work out for everyone – in fact, it can lead people down paths of destruction. This adaptation is based on the real life experiences of Jordan Belfort, detailed in his 2007 memoir.

        “On a daily basis I consume enough drugs to sedate Manhattan.” – Jordan Belfort, The Wolf of Wall Street

        4

          Lesson #4: Those Who Rise the Highest Might Fall the Furthest

          The 1993 TV movie, Barbarians at The Gate, tells the story of F. Ross Johnson, a prestigious CEO who has risen to wealth and fame after working as a paperboy. This rags to riches tale initially seems like the perfect capitalist success story. However, things become sour as Johnson strives to save a company from doom by purchasing it. The ensuing drama demonstrates that millions of dollars are at stake. Quite often, CEOs betting on Wall Street are putting their fortunes on the line.

          “It’s not the company. It’s the credibility. My credibility. I can’t just sit on the bench and let other people play the game. Not my game. Not with their rules.” – Henry Kravis, Barbarians at the Gate

          If you’re looking for a completely different type of film that emphasizes this point, check out Assault on Wall Street. This over-the-top Hollywood action shootout shows what one murderous and vengeful broker will do during an economic recession.

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          “They should all know that I am out there, a soldier of the people.” – Jim Baxford, Assault on Wall Street

          5

            Lesson #5: Don’t Let Brokers Gamble with Institutional Funds

            Rogue Trader is a fictional adaptation of a real-life story, which illustrates one of the most catastrophic cautionary tales for banking institutions. Nick Leeson, portrayed by Ewan McGregor, gambles with illegal trades as a bank employee. His employers never think to monitor these trades, and the situation quickly derails.

            “I, Nick Leeson, have lost 50 million quid in one day!” – Nick Leeson, Rogue Trader

            6

              Lesson #6: Stop Trying to Impress Others

              Seth Davis (played by Giovanni Ribisi) is the hapless protagonist of Boiler Room, which also stars Vin Diesel. Seth drops out of college and seeks to regain the approval of his father, who is a really strict federal judge. To impress his dad, he begins to explore the world of stock brokerage. However, his quest to win over his father unwinds when Seth is confronted with extremely unethical business dilemmas.

              “I have a very strong work ethic. The problem was my ethics in work.” – Seth Davis, Boiler Room

              7

                Lesson #7: The Press Will Dig Up Your Dirt

                Investor Sherman McCoy, played by Tom Hanks, learned this the hard way in The Bonfire of the Vanities. He becomes the center of a media scandal as journalists and politicians warp a criminal investigation to suit their needs. McCoy’s life is completely picked apart by lawyers and journalists, who publicly reveal his infidelity, along with other dirty secrets.

                “You see, Sherman, who started with so much, lost everything. But he gained his soul. Whereas I, you see, who started with so little, gained everything.” – Peter Fallow, The Bonfire of the Vanities

                8

                  Lesson #8: It’s All a Big Gamble

                  Michael Moore’s eye-opening Capitalism: A Love Story documentary shows just how ill-informed Wall Street influencers are when it comes to where American funds are going. When Moore grills Elizabeth Warren about the location and status of federal bailout money, he was met with an “I don’t know” response. Moore spends the remainder of the film being met with red tape and closed doors as he tries to chase down answers on Wall Street.

                  “Don’t make any more movies.” – A Wall Street Businessman, Capitalism: A Love Story

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                  9

                    Lesson #9: Put Your Eggs in More than One Basket

                    The HBO film, Too Big To Fail, illustrates the false confidence and extremely risky deals made by American financial institutions in 2008, which lead to the financial crisis and recession. Unfortunately, a pattern of mergers led to a very small group of institutions accountable for massive amounts of U.S. wealth. With few accountability measures in place, these banking giants were slid downhill along with the country’s funds.

                    “AIG can’t pay. AIG goes under. Every bank they insure books massive losses on the same day. And then they all go under. It all comes down.” – Neel Kashkari, Too Big to Fail

                    10

                      Lesson #10: The Stress Can Be Really Bad for Your Health

                      American Psycho is an extremely memorable film adaptation of the Bret Easton Ellis novel. Institutions aren’t just at risk of meltdowns – the human psyche can suffer a breakdown due to the immense stress of life on Wall Street. Christian Bale horrifies us with his portrayal of serial killer Patrick Bateman, who has become completely warped by the kill-or-be-killed mentality of the New York investment world.

                      “I think my mask of sanity is about to slip.” – Patrick Bateman, American Psycho

                      Institutions rise and fall because of the decisions made on Wall Street. This very crucial location is the setting for countless real life and fictional drama that unfold as quickly as stock prices fluctuate. It’s no surprise that there have been dozens of films capturing the culture and figure of influence on Wall Street. Check out a few of these cinematic gems and see what financial lessons you walk away with.

                      Featured photo credit: Hernan Seoane via flickr.com

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                      Larry Alton

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                      Last Updated on January 2, 2019

                      How Personal Finance Software Helps You Get More Out of Your Money

                      How Personal Finance Software Helps You Get More Out of Your Money

                      Do you know what mental health experts point to as the biggest cause of stress in the United States today? If you said “money,” then ding, ding, we have a winner!

                      Three out of four adults today report feeling stressed out about money at least part of the time. People are either worried about not having enough money or whether they’re putting the money they do have to use in the best possible way.

                      Your money is either in charge of you or you’re in charge of it, there’s no middle ground. Using some type of personal finance software can help alleviate some of that money stress and better allow you to manage your money effectively. Without it, you may just be setting yourself up for constant financial worry. Life is already tough enough and there’s no need to make it more difficult by simply hoping your money issues will all work out in your favor. Hint: they won’t.

                      This guide will help you to understand how personal finance software can better assist with both accomplishing long term financial goals and managing day-to-day aspects of life.

                      Whether it’s tracking the savings plan for your child’s college fund or making sure you won’t be in the red with the month’s grocery budget, personal finance software keeps all this information in one convenient place.

                      What Exactly is Personal Finance Software?

                      Think of it like the dashboard in your car. You have a speedometer to tell you how fast you’re going, an odometer to tell you how far you’ve traveled, and then other gauges to tell you things like how much gas is in the tank and your engine temperature. Personal finance software is essentially the same thing for your money.

                      When you install this software on your computer, tablet, or smartphone, it helps to track your money — how much is going in, how much is going out, and its growth. Most personal finance software programs will display your budget, spending, investments, bills, savings accounts, and even retirement plans, levels of debt, and credit score.

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                      How It Leads to Financial Improvement

                      It shouldn’t come as a surprise, but people who regularly monitor their finances end up wealthier than those who don’t. When you were a kid, keeping track of all of your money in a porcelain piggy bank was pretty easy. As we get older, though, our money becomes spread out across things like car payments, mortgages, retirement funds, taxes, and other investments and debts. All of these things make keeping track of our money a lot more complicated.

                      Some types of personal finance software can help make things a little less complicated, setting you up to meet financial goals and taking away some of the stress associated with money.

                      Even if you already have a Certified Financial Planner (CFP) some type of personal finance software can be of great benefit. Whereas CFPs focus on the big picture of your money, they don’t handle the day-to-day aspects that determine your overall financial health.

                      It’s also not nearly as complicated as you might think and can take out a lot of the tedium that comes with doing everything on an Excel spreadsheet or with a pad and pencil.

                      Types of Personal Finance Software

                      When it comes to personal finance software, it generally fits into two categories: tax preparation and money management.

                      Tax preparation software such as Turbo Tax and H&R Block’s software can help with everything from filing income taxes to IRS rules and regulations and even estate plans. Plus, there’s the benefit of filing online and getting your refund check a lot faster than if you were to mail off your forms after waiting in line at the post office.

                      For the purpose of this article, however, will be focusing more on the personal finance software that aids with money management.

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                      Money management personal finance software will help you to see the health of your cash flow, pay down debt, forecast for expenses and savings, track investments, pay bills, and do a host of other things that 30 years ago would have practically required a team of accountants.

                      When to Use Personal Finance Software

                      So far we’ve gone over what exactly personal finance software is and how it can be a benefit to your money. The next logical step in this whole equation is determining when it should be used and how is the best way to go about getting started using it.

                      Below are four of the most common and practical ways to use personal finance software. If all or any of these apply to you and your money, then downloading some type of personal finance software is going to be a smart move.

                      1. You Have Multiple Accounts

                      There’s a good chance that when it comes to your money, it’s in more than one place. Sure, you probably have a checking account, but you may also have a savings account, money market account, and retirement accounts such as an IRA or 401k.

                      If you’re like the average American, you probably have two to three credit cards as well. Fifty percent of Americans also don’t have loyalty to just one bank and spread their money across multiple banks.

                      Rather than spending hours typing in every detail of every account you have into a spreadsheet, many programs allow you to easily import your account information. This will help to eliminate any mistakes and give you a bird’s eye view of everything at once.

                      2. You Want to Automate Some or All of Your Payments

                      Please don’t say that you’re still writing out paper checks and dropping each bill in the mailbox. While it’s noble that you’re doing your part to keep postal workers employed, we’re 18 years into the 21st century and you can literally pay every bill online now.

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                      There’s no need to log into every account you have and type in your routing number either.

                      With personal finance software you can schedule automatic payments and transfers between all of your imported accounts. Automatic transfers will help to make sure you have the necessary funds in the right account to ensure all bills are paid on the appropriate date. Late fees are annoying and do nothing but cost you money. It’s time that you said goodbye to them once and for all.

                      3. You Need to Streamline Your Budget

                      Perhaps the best feature of personal finance software is that it allows you track everything going in and out of your virtual wallet.

                      Nearly every brand of personal finance software out there has easy-to-read graphs and charts that allow you track every cent you spend or earn, should you choose. You might be pretty amazed when you see just how much you spent on eating out last month or if you splurged a little more than you should have on Christmas gifts last year.

                      Every successful business on the planet has a budget and using personal finance software can help you trim the fat on your spending in ways that affect your everyday life.

                      4. You Have Specific Goals to Meet

                      Maybe it’s paying off debt or saving for up something like a European vacation. Whatever your financial goal is, whether it’s long-term or short-term, personal finance software programs are one of the savviest ways to go about reaching those goals.

                      You can do everything from set spending alerts to notify you when you’re over budget to automating what percentage of your paycheck goes to things like retirement investments. The personal finance software that you choose should show you exactly how close you are to hitting those goals at any given time.

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                      How to Get Started

                      From AceMoney to Mint and Quicken, there ’s no shortage of personal finance software apps out there. Many of these programs are free to download and will allow you to pay bills, invest, monitor your net worth and credit profile, and even get a loan with the swipe of a finger.

                      Other programs may only offer you limited services and will require a one-time fee or subscription to unlock all that they offer. These fees can often vary from as little as two dollars to 50 bucks a month.

                      It’s best to start off with the free version and then gauge whether you’re able to accomplish everything you’d like or if it’s worth exploring one of the paid options. Often times the subscription programs come with assistance from financial planning and investment experts — so that can be a real benefit.

                      When deciding which personal finance software program to use, it’s also important to look at how many accounts you wish to monitor. Certain programs limit the number of accounts you can add. Be sure that if you have checking, credit card, and investment accounts to monitor, that you choose a service that can monitor them all.

                      Finally, when looking around for the right personal finance software that meets your needs, make sure that you’re comfortable with the program’s interface. It shouldn’t be expected that you recognize every single feature instantly, but if the features don’t seem readable and manageable to you, then you’re not as likely to use it and get the full benefits.

                      Final Thoughts

                      Personal finance software can go a long way in helping you to take control of your money and meeting your financial goals. It’s important to note, however, that some focus more on budgeting and expense tracking while others prioritize investing portfolios and income taxes. Explore several different programs and read reviews to find the one that’s right for you.

                      In this day and age, managing one’s personal finances in a secure manner that allows the user to have a real-time visual representation of their money is easier than ever before. With the numerous applications that are out there — both free and subscription-based — there’s no reason that every person can’t take control of their money and ensure they’re making smart money moves.

                      Featured photo credit: rawpixel via unsplash.com

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