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.