If you’ve listened to our podcast, you’ll know that this stacker LOVES movies. I enjoy a good flick nearly as much as I like a day at a baseball game.
…Villains….these people MAKE the summer blockbuster fun, don’t they? Some psychopath that you can actively vote against is exactly what the doctor ordered. Start with a superhero, maybe a love interest and throw in a little humor and you’re halfway there. Then insert a dude who blows stuff up because his mom wasn’t nice to him and I’m in the front row.
Villains aren’t only at the theater. They’re in your financial plan. Like villains in the blockbusters, there are sneaky bad guys and flamboyant evil women. Let’s line up some of the “best” villains of all time with their financial counterparts.
The Joker – Batman – Poor Risk Management
What frightened me most about the Joker (especially Heath Ledger’s version) was his ability to surprise you with his next move. The Joker wasn’t just evil….he delighted in surprising you. The famous pencil through the nose scene? I jumped because I didn’t see it coming.
Risk management is the same. I can’t tell you the number of times I’ve heard someone say, “If I’d have known….” The fact is, you won’t ever know. There’s no chance you’ll beat the Joker head-to-head. That’s why I don’t skimp on life insurance and disability coverage, and it’s also the reason I have a cash reserve.
Lex Luthor – Superman – Fees
Lex Luthor was that guy who took an evil plan and made it evil-er. He took secret weapons, put them in the hands of henchmen and if it weren’t for Superman, would have on countless occasions either ended the world or owned it.
Fees in most financial instruments are as sneaky as Luthor. If it weren’t for sites like Morningstar and financial disclosure documents such as the dsprospectus, many investors would never know what they’re paying for investments….and suffer significant destruction in their portfolio.
Norman Bates – Psycho – Bad Financial Advice
Norman Bates seems fairly normal at the beginning of Psycho. He’s a good looking guy who’s running the motel. Sure, he mentions mom a little more than the normal dude, but is it a crime to be a momma’s boy? Only later do you find out that nothing is normal.
I’ve met some financial advisors who give Bates a run for his money on weirdness. They can smile and tell you everything is going just fine…but you don’t know you’re the next victim. That’s why working from a referral is so important, and checking the FINRA BrokerCheck website is paramount, unless you want to be surprised later (and hopefully not while you’re in the shower!).
The Wicked Witch of the West – Wizard of Oz – Uncertain Markets
Dorothy had no idea what she was getting into with the Wicked Witch. Sure, she’d been warned, and there were those flying monkeys….but still, with a strong focus on Emerald City and a few friends she met on the road, it was easy to forget just how evil this woman could be. Dorothy almost got hers, but luckily had a good defense….some water.
Defensive measures in a portfolio are actually as easy as water, but people ignore them because their eye is on the prize. People say they’ll diversify later, or they’ll asset allocate later, or they’ll take a little more risk that’ll help them eek out a little more retirement. In many of these cases when 2000 hits, or 2008, or 1986, or ANY year the market drops, it’s these people who get caught in the Wicked Witch of Down Market’s grasp.
Freddy Kreuger – Nightmare On Elm Street – Taxes
Is Freddy awesome or what? How about this guy. He attacks when you sleep. If you sleep, you die. No pressure there, huh? I remember watching Nightmare on Elm Street and being scared silly….and I was too old to be afraid of things that go bump in the night.
The effect of taxes on a portfolio are very Freddy Kreuger-like. I’ve read reports that show that using the incorrect tax shelter can ruin portfolio results more than a poorly mixed grouping of assets. Taxes wear down a portfolio, but you only see the effects when it’s too late—by the time you receive your tax documents, there’s nothing you can do about it but figure out how to pay the bill.
Darth Vader – Star Wars – Inflation
Let’s face it: half the reason Darth Vader was so evil was because he had to instill fear in a ton of little guys in a sprawling empire. If Darth Vader wasn’t evil, how would things operate? To the Emperor, Darth Vader played the part of the “bad cop.” He was a necessary evil in the move toward progress.
Inflation is also a necessary evil. If people receive raises, if businesses are going to increase prices, if anyone is going to get ahead in life, inflation is going to come along for the ride. Unfortunately, we don’t realize that while all of those things are good, inflation itself will kill your portfolio if you don’t realize it’s there. If you place money in an investment earning 1% and inflation is 3%, guess what’s going to happen to your money?
There are some of my favorites. I’m sure you have more! Let’s see them in the comments.
Ahhhh…..you’re starting my day off with nightmares!
I think these are good comparisons! Especially Freddy Krueger…I used to LOVE those movies when I was a kid. I don’t think I could even watch them now.
Freddy was the worst. Can’t sleep? How terrifying.
DC @ Young Adult Money
Awesome analogies! While I think these are all good things to keep in mind, I think inflation is something that most people do not factor in enough when making decisions. Yes, it can jump higher or lower in the short-term but what we know is that long-term we will have to deal with inflation. If my great-grandfather had buried $10,000 sixty years ago and we found it today, I wouldn’t complain but at the same time it will have lost a lot of it’s value over those sixty years.
I just did a quick rule of 72 comparison in my head….if he’d forgotten and left it in a fund instead earning 8% it would have been worth around a million dollars!
Grayson @ Debt Roundup
Great comparisons Joe. I really like how you did it and I could relate to all of them.
Done by Forty
I thought I understood the risks to my portfolio, but I was WRONG!!!
Thanks for the all the video clips and fun comparisons. They’re a great way to start the day.
Ha! Anything I can do, DbF. I’m entertaining myself with these and bringing you along for the ride.
John S @ Frugal Rules
Great analogies Joe! I felt the same way about Ledger’s performance, it was so classic. That’s seriously one of my favorite movies.
I was resistant to it, but when I finally saw the film….WOW. Gritty and intense, and a great portrait of a caped crusader who’s clearly conflicted. (how ’bout that alliteration, huh?)
Matt @ momanddadmoney
Haha, love this. The Joker was the probably my favorite movie villain of all time. Unless you count Kaiser Soze. Not sure what pitfall he would represent. Maybe getting caught in a bubble and the shock that results? Eh, I’ll leave it to you.
Kaiser Soze! Sadly, I’d had a well meaning friend tell me the ending of that story, and I didn’t enjoy it nearly as much as I would have, had I not known….
Your Daily Finance
Wicked Witch and Freddy Krueger are killing me Joe! But those to are the one are hunting me the most. Speaking of scary movies though isn’t it funny how now when you go back and watch them you can laugh. Like really I was terrified of this!!
Funny you say that. I was watching the Freddy Krueger vid as I was compiling the list and said to myself, “I was afraid of THAT? Big hair and bad acting?” It was SO frightening at the time…..
Common Cents Wealth
You bring up some awesome points (and I like the metaphor!). I’m pretty new to the whole financial plan thing, so I’m sure I have quite a few villains that I’ll need to get rid of. Hopefully I find and dispose of them sooner rather than later.
Nick @ ayoungpro.com
I’ve been played by the Joker a few times recently. It definitely has me wanting to build up a better emergency fund!
…who knows where the Joker lurks, Nick!
Budget & the Beach
ha I love this….Freddy Kruger and taxes? For sure!!! And this: “Sure, he mentions mom a little more than the normal dude, but is it a crime to be a momma’s boy?” I’d say yes! Mama’s boys scare me away.
It sounds like there’s a MUCH bigger story there…..
I think I’m going to nominate the Shark from Jaws as surprise expenses. Always waiting to sneak up and devour you!
Dude! We have a winner! Nice job, Nick. Just in the ….well….Nick of time……
I love movie bad guys, and they do totally relate to finance. I especially like the Norman Bates one. Poor Norman. I actually kind of felt sorry for him.
Daisy @ Prairie Eco Thrifter
This is awesome! I have the ones that everyone else has – taxes, fees, inflation, uncertain markets etc. I have eliminated banking fees almost completely. My retirement savings are invested, and unfortunately markets are never 100% certain.