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Financial Advice From Six Classic Movies

Financial Advice From Six Classic Movies

What I learned about finances from The Godfather is you give The Godfather the money he wants and you get to keep your knee caps. That seems like a fair trade. Joy Mali, of The Washington Times and Dumb Little Man, shares more financial and credit advice from The Godfather and other classic movies:

There are three main reasons many of us watch movies:

  • We watch movies to be entertained.
  • We also watch movies to become aware of social and economic issues.
  • We watch movies to be informed and educated.

Films are subjective-what you like, what you don’t like,” says director Christopher Nolan. “But the thing for me that is absolutely unifying is the idea that every time I go to the cinema and pay my money and sit down and watch a film go up on-screen, I want to feel that the people who made that film think it’s the best movie in the world, that they poured everything into it and they really love it. Whether or not I agree with what they’ve done, I want that effort there-I want that sincerity. And when you don’t feel it, that’s the only time I feel like I’m wasting my time at the movies.

Movies can help educate us on how to manage our finances and credit health. Here are six movies that not only provide lessons about money, but may also give you tips to improve your credit rating:

wallstreet

    Wall Street (1987): “The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. 

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    Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.” – Gordon Gekko

    This quote by actor Michael Douglas, playing the infamous Gordon Gekko, speaks boldly about how greed drives our country. This impassioned speech gives a nod to how important it is that we want more and more, to the point of greed. Because we want to have the ability to purchase more, we open up credit accounts that allow us to buy what we want now and pay for the items later.

    These payments are tracked on our credit histories. Even the United States government goes into debt to pay for the things the country needs today and makes payments on these credit accounts.

    shawshank redemption

      Shawshank Redemption (1994): “Get busy living or get busy dying.” – Andy Dufresne

      This award-winning film about a wrongly imprisoned New England banker sends the message that viewers might want to plan for the future, especially in these current times of economic crisis.

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      Maintaining stable employment, working to pay off debts, building an emergency savings fund, and checking credit history to make sure everything is in order are four things every consumer can do to help plan for the uncertain future.

      This character understands if you are not living, then you are dying. In financial terms, we could view this statement as: if you are not saving then you are wasting.

      the god father

        The Godfather (1972): “I’m going to make him an offer he can’t refuse.” – Vito Corleone

        This timeless trilogy provides a viewpoint on money that indicates how everything has a price to be paid. Corleone is not speaking directly about monetary value when he states the above, but the statement is applicable to finances.

        Every financial action we make comes with a price. If we cannot refuse the offer to open up certain credit accounts, we must also take the responsibility for paying off the debts we incur.

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        jerry-maguire-1996-03-g

          Jerry Maguire (1996): “Show me the money!” – Rod Tidwell

          Athlete, Tidwell, makes this statement to his sports agent, Maguire, to motivate him to make more lucrative endorsement deals and contract agreements for him. Tidwell knows his worth, and he will not settle for less pay than his expertise and celebrity can command.

          To take a page from Tidwell’s book, you can ask for the salary you deserve and show confidence that you will get it.

          1083_019971.jpg

            Field of Dreams (1989): “If you build it, he will come.” – Shoeless Joe Jackson

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            When you make sound financial decisions and monitor your credit, you can build a positive financial standing that can result in creditors offering to extend you credit.

            Lenders tend to reward consumers with positive credit standings with even more credit lines. These are the consumers who can write their own loans, with favorable terms.

            boiler room

              Boiler Room (2000): “And there is no such thing as a no sale call. A sale is made on every call you make. Either you sell the client some stock or he sells you a reason he can’t. Either way a sale is made, the only question is who is gonna close? You or him? Now be relentless, that’s it, I’m done.” – Jim Young

              There are winners and losers in every aspect of life. In the world of money, the employee who enters the boss’ office with a well prepared request for a raise may come out the winner. This employee may know his or her worth and is willing to negotiate for a higher salary.

              If the employee is less prepared, or full of self doubt, the discussion could very easily turn into a declination of the raise request. Those who climb the financial ladder to increased salaries are relentless in their pursuit of higher pay.

              Joy Mali is a staff writer on The Washington Times and Examiner. Her work is also published on Lifehack, Yahoo and other mainstream sites. She likes to share interesting tips to help people manage their personal finances & credit.

              Greed Is Good! How Financial Advice From Gordon Gekko and Vito Corleone Can Teach You About Credit Management | Dumb Little Man

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              Last Updated on August 20, 2019

              How to Set Financial Goals and Actually Meet Them

              How to Set Financial Goals and Actually Meet Them

              Finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. And that’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

              In this article, we will explore ways on how to set financial goals and then actually meet them with ease.

              5 Steps to Set Financial Goals

              Though setting financial goals might seem to be a daunting task but if one has the will and clarity of thought, it is rather easy. Try using these steps:

              1. Be Clear About the Objectives

              Any goal (let alone financial) without a clear objective is nothing more than a pipe dream. And this couldn’t be more true for financial matters.

              It is often said that savings is nothing but deferred consumption. Therefore if you are saving today, then you should be crystal clear about what it is for. It could be anything like kid’s education, retirement, marriage, that dream vacation, fancy car etc.

              Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives, however small they may be, that you foresee in the future and put a value to it.

              2. Keep Them Realistic

              It’s good to be an optimistic person but being a pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going out of the line will definitely hurt your chances of achieving them.

              It’s important that you keep your goals realistic in nature for it will help you stay the course and keep you motivated throughout the journey.

              3. Account for Inflation

              Ronald Reagan once said – “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman”. And this quote sums up the best what inflation could do your financial goals.

              Therefore account for inflation whenever you are putting a monetary value to a financial objective that is far away in the future.

              For example, if one of your financial goal is your son’s college education, which is 15 years hence, then inflation would increase the monetary burden by more than 50% if inflation is mere 3%. So always account for inflation.

              4. Short Term vs Long Term

              Just like every calorie is not the same, the approach towards achieving every financial goal will not be the same. It is important to bifurcate goals in short term and long term.

              As a rule of thumb, any financial goal, which is due in next 3 years should be termed as short term goal. Any longer duration goals are to be classified as long term goals. This bifurcation of goals into short term vs long term will help in choosing the right investment instrument to achieve them.

              More on this later when we talk about how to achieve financial goals.

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              5. To Each to His Own

              The journey of setting financial goals is an individualistic affair i.e. your goals are your own goals and are determined by your want to achieve them. A lot of times we get on the bandwagon of goal setting only to realize later on that it was not meant for us.

              It is important that your goals are actually your goals and not inspired by someone else. Take a hard look at this step at all the goals you’ve set for after this step, you will be on the way to achieve them.

              By now, you would be ready with your financial goals, now it’s time to go all out and achieve them.

              11 Ways to Achieve Your Financial Goals

              Whenever we talk about chasing any financial goal, it is usually a 2 step process –

              • Ensuring healthy savings
              • Making smart investments

              You will need to save enough; and invest those savings wisely so that they grow over a period of time to help you achieve goals. So let’s get down to ensuring healthy savings.

              Ensuring Healthy Savings

              Self realization is the best form of realisation and unless you decide what your current financial position is, you aren’t heading anywhere.

              This is the focal point from where you start your journey of achieving financial goals.

              1. Track Expenses

              The first and the foremost thing to be done is to track your monthly expenses. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you would be surprised to see how small expenses add up to a sizeable amount.

              Also categorize those expenses into different bucket so that you know which bucket is eating the most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pump up your savings rate.

              2. Pay Yourself First

              Generally, savings come after all the expenses have been taken care of. This is a classical mistake which almost everyone of us do. We pay ourselves last!

              Ideally, this should be planned upside down. We should be paying ourselves first and then to the world i.e. we should be taking out the planned saving amount first and then manage all the expenses from the rest.

              The best way to actually implement is to put the savings on automatic mode i.e. money flowing automatically into different financial instruments (for example – mutual funds, retirement corpus etc) every month.

              Taking the automatic route will make us lose control of our money and hence will compel us to manage in what’s left with us thereby increasing the savings rate.

              3. Make a Plan and Vow to Stick with It

              Budgeting is the best to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be made.

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              Nowadays, several money management apps and wallets can help you do this automatically. It’s easy and who knows, you may just end up doing what people fail to do.

              At first, you may not be able to stick to your plans completely but don’t let that become a reason why you stop budgeting entirely.

              Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

              You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

              4. Rise Again Even If You Fall

              Let’s be realistic. It’s not like the world will come to an end if you made one mistake. This isn’t called leniency but discipline.

              If you fail to meet your budget for a month, don’t give up the entire effort just like that. Instead, start again.

              Remember that flexible plans are the most realistic plans. So go forward and try to follow your financial goals as planned but if for some reason, the plan gets out of hand for you, do not give up on it just yet. This has a lot to do with your psychology rather than any material commitment.

              All you have to do is to stay on the road and vow to stay on it, no matter how much you fall down.

              5. Make Savings a Habit and Not a Goal

              In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

              Make Savings a habit rather than a goal. While it might seem to be counter intuitive to many but there are some deft ways of doing it. For example:

              Always eat out (if at all) during weekdays rather than weekends. Usually weekends are expensive. Make it a habit and you would in turn be saving a great deal.

              If you are travelling buff, try to travel during off season. Your outlay will be much less.

              If you go out for shopping, always look out for coupons and see where can you get the best deal.

              So the key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice which will be harder to sustain over a period of time.

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              6. Talk About It

              Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission. And it would be rather easy to lose the grip over your discipline.

              Therefore in order to stay the course, it is advisable that you keep yourself surrounded with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

              7. Maintain a Journal

              For some people, writing helps a great deal in making sure that they achieve what they plan.

              So if you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

              Use this journal to write down all essential points such as your short term, mid term and long term goals, your current sources of income, your regular expenses which you are aware of and any committed expenses which are of recurring nature.

              When you have a written commitment on paper, you are going to feel more energised to follow the plan and stick to it. Moreover, it is going to be a lot more easier for you to follow you and track your progress.

              At this point, you should be ready with your financial goals and would be doing brilliantly with savings; now it’s time to talk about the big daddy – Investments.

              Making Smart Investments

              Savings by themselves don’t take anyone too far. However savings when invested wisely can do wonders and we are at that stage where we will talk about making smart investments.

              8. Consult a Financial Advisor

              Investments doesn’t come naturally to most of us therefore rather than dabbling with it ourselves, it is wise to consult a financial advisor.

              Talk to him/her about your financial goals and savings and then seek advice for the best investment instruments to achieve your goals.

              9. Choose Your Investment Instrument Wisely

              Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about them.

              Just like “no one is born a criminal”, no investment instrument is bad or good. It is the application of that instrument that makes all the difference.

              Do you remember we talked about bifurcating financial goals in short term and long term?

              It is here where that classification will help.

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              So as a general rule, for all your short term financial goals, choose an investment instrument that has debt nature for example fixed deposits, debt mutual funds etc. The reason for going for debt instruments is that chances of capital loss is less as compared to equity instruments.

              10. Compounding Is the Eighth Wonder

              Einstein once remarked about compounding,

              Compound Interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.

              So make friends with this wonder kid. And sooner you become friends with it, quicker you will reach closer to your financial goals.

              Start investing early so that time is on your side to help you bear the fruits of compounding.

              11. Measure, Measure, Measure

              All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments; taking stock of how our investments are doing.

              If there is one single step where everything (so far) can go wrong, it is at this step – Measuring the Progress.

              If we don’t measure the progress timely, then we would be shooting in the dark. We wouldn’t know if our saving rate is appropriate or not; whether financial advisor is doing a decent job; whether we are moving closer to our target or not.

              Do measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

              The Bottom Line

              This completes the list of tips for you to set financial goals and actually achieve them with not so great difficulty.

              As you can see, all it requires is discipline. But guess that’s the most difficult part!

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              Featured photo credit: rawpixel via unsplash.com

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