The Top Ten Films with a Financial Lesson

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Recently we were thinking about movies with some kind of financial lesson.  The financial side of making films has always intrigued us.  Historically the Oscars have always been proof that the biggest budget doesn’t always give the best ROI.  In 2010, the lowest grossing Oscar winning film in history – The Hurt Locker – beat out the highest grossing picture in history – Avatar.

Here’s my list of the top 10 movies ever made that have a financial lesson inside of them.

1.  Boiler Room (2000) – A college dropout gets a job and enjoys fast success at a brokerage house selling phony stock.  However, the job turns out not be as legit as it sounds.  This film is mix of Wall Street and Glengarry Glen Ross thrown in.  Although there’s no character here that can compare to Michael Douglas’ Gordon Gekko.

Lesson:  Great morality lesson dealing with the desire to get rich quick, regardless of the consequences.

2.  Wall Street (1987) – “Greed, for lack of a better word, is good”.  This line by ruthless corporate raider, Gordon Gekko, summed up the business ethics of the 1980s, when greed, corruption and the predatory nature of the financial world was at its most conspicuous.  The film charts the ascent of a young, ambitious stockbroker who’s taken under Gekko’s wing and struggles with whether it’s better to have money or integrity.  Gekko is the embodiment of corporate malfeasance, but also portrayed as a business guru.  His glamor and power probably inspired a lot of young men to enter investment banking over the last two decades. As Gekko said, “It’s all about bucks, kid. The rest is conversation.”

Lesson:  Greed is good.  What’s worth doing is worth doing for money.  Lunch is for wimps.  If you need a friend, buy a dog.  So goes the wisdom of Gordon Gekko, ruthless investor, legendary financier – and the star of one of the best movies ever made about money.  This film also provides a great backdrop to the landscape that led to the financial crisis of 2008.

3.  Glengarry Glen Ross (1992) – Times are tough.  This is the ultimate real estate high pressure sales environment film where making money is the bottom line.  A desperate group of Chicago investment property real estate salesmen suffer in a down market, a sales contest is launched and anyone who fails loses his job.

Now that the property bubble has burst, some real estate offices may soon seem a little bit more “Glengarry”.  There’s no room for losers, only ‘closers’ will get the good sales leads.  Some regarded this film as a critique of the impact of Reaganomics.

Lesson:  Too much pressure to succeed can boil over into tragedy with unforeseen consequences.

With the upcoming premiere of the film “Wall Street – Money Never Sleeps” it got me thinking about movies with some kind of financial lesson.  The financial side of making filmshasalways intrigued me.  This year’s Oscars were yet again proof that the biggest budget doesn’t always give the best ROI.  In 2010, the lowest grossing Oscar winning film in history – The Hurt Locker – beat out the highest grossing picture in history – Avatar.

Here’s my list of the top 10 movies ever made that have a financial lesson inside of them.

4.  Maxed Out. Hard times. Easy Credit. The Era of Predatory Lending (2006) – This documentary shows how the modern financial industry really works.  It explores America’s love with credit and leveraged debt and tells us why the poor are getting poorer and the rich getting richer.  When Hurricane Katrina ravaged America’s coast, it revealed that America was far from the world’s wealthiest nation.  It also highlighted America’s crumbling beneath a staggering burden of individual and government debt.  Maxed Out shows how predatory lending was out of control, including credit cards pumped to college kids who had no income.  This is a great movie.  It’ll make you feel different about your money.

Lesson:  It delivers a great lesson on how to borrow and shows why you don’t want to live on credit.  Credit is the devil.  Do you know anyone who got into trouble because they didn’t borrow too much money?  Maxed Out paints a picture of a national nightmare which is all too real for most of us – out of control spending and an irrational use of credit.

5.  Enron: The Smartest Guys in the Room (2005) – Before Bernie Madoff, there were Ken Lay and Jeff Skilling who ran the Houston energy firm that was going to reinvent how energy was going to be done in America.  Enron was highly profitable, had a great amount of cash flow and earnings and the stock price soared.  Its executives cashed out options worth millions and told employees their best 401K option was Enron stock.  Thousands lost all their retirement savings because they put all their bets on one company.  Took Enron 16 yrs to from 10b assets to 65b assets, but it took them 24 days to go bankrupt.  It won the Academy Award for best documentary.

Lessons:   Have a financial plan, have a discipline.  If you have a stock that looks too good to be true and it just keeps going up, up, up, it’s probably too good to be true.  Diversify, Diversify, Diversify.  Don’t put all your eggs into one basket.

6.  Working Girl (1988) – Melanie Griffith plays Tess McGill.  Endearing 80s film.  Ultimately she takes a job as a secretary but she wants to rise in investment world.  Wants to rise to power, combines her business degree from night school w/ her street smart acumen & pulls of a mega-merger.  Total fantasy.  Prince charming happy ending w/ Harrison Ford.  “I have a head for business and a body for sex.”, says Melanie Griffith’s character.  Go back to night school, go back & get a degree.  Go get educated, you’ll get leverage.  No one can take your education away from you.

Lessons:  Your education, your smarts can’t be wiped out in a recession.  Your earning power is rooted in your skills, in your education.  Provides an entertaining reminder that if you have something to offer your co. & they don’t seem too interested, then take your skills elsewhere.  If you are a super powerful earner at one job, you can make yourself a super powerful earner anywhere.

7.  Treasure of the Sierra Madre.  1948.  Classic western cautionary tale about how not to launch a venture.  If you took everything that Howard Dobbs & Kutan did in this movie: “Get rich quickly without a credible business plan.”  “Badges, we don’t need no stinking badges.”  Don’t swing blindly, don’t come up w/ a get rich quick scheme, don’t do a pyramid scheme, don’t sell products from your house to your friends or recruit your friends.

Lesson:  In life, as in baseball, you’re gonna strike out.  You don’t want to strike out blindly while your pursuing a huge home run.  You gotta know your business, know your partners, know where you are in all of this.

8.  Mr. Blanding Builds His Dream House (1948) – Was remade into The Money Pit, starring Tom Hanks & Shelly Long.  Owning a home ain’t cheap.  It can turn into a massively expensive ordeal.  Home is really a money pit.  Owning a home comes w/ a lot of responsibility, gotta have credit, gotta have a down payment, pay your bills, maintain the home, gotta know the risks up front.  It’s expensive.  You gotta know the worse case scenarios, all the risks, the downside.

Lesson:  Shows how the American dream of owning a home can go terribly wrong.  Home ownership is not for everybody and shouldn’t be promoted as such by the government.

9.  Confessions Of A Shopaholic (2009) – About a chic who’s struggling with a debilitating obsession with shopping and has 12 maxed out credit cards.  She unintentionally lands a job as a financial journalist and falls for a wealthy entrepreneur. Don’t buy a $400 watch because it quickly depreciates to nothing.  I will buy a $4,000 Rolex – nothing less than a Rolex — because it can still be sold 10 yrs after you buy it for what you paid for it.  You use credit to buy things of value:  an education, a car to get you to work, (I prefer to buy 2-yr old used cars because it loses half its value up front when you drive it off the lot, but you can still get 50-60,000 miles out of it.)

Lesson:  Only use credit for things that have value.  Pay cash for everything else.

10.  Brewster’s Millions (1985) – The ultimate spending spree is something that most of us have daydreamt about at some time.  A minor league baseball player, Montgomery Brewster, (Richard Pryor) has to waste $30m in 30s days in order to inherit $300m; however, he’s not allowed to tell anyone about the $300m deal.

Lesson:  How corruptible too much money can be and how difficult it can be to use it responsibly.

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