Would you rather spend 90 minutes devising a rigorous financial plan -- one that ensures you will achieve your retirement goals when you're ready to quit working...
...or would you rather spend it watching a classic romantic comedy?
These seemingly distinct activities can in some cases be completed at the same time! Lest my fitness as a financial planner — a professional who should be confidently guiding clients into a better future — be called into question, I would argue that that there is a lot to be learned from old movies that can help us all in the challenges we will face this year and beyond.
While there have been no big screen financial planning dramas or thrillers to provide us with explicit guidance, some of our favorite movies often do tackle important financial issues, even if the opportunity for delivering sound financial advice gets overshadowed by other turns of the plot.
Take for example Christmas Vacation, with Chevy Chase as the lovable Clark Griswold. If ever there was a chance to drive home the folly of spending money you don’t have, it’s when Clark contracts for a family pool before he discovers that his Christmas bonus is not four figures, but a subscription to the Jelly of the Month club.
Rather than emphasize the importance of living within your means, however, the movie demonstrates the benefit of having a thug for a brother-in-law, who thinks nothing of kidnapping Clark’s boss and intimidating him until he relents with a nice, fat bonus check. At today’s unemployment rates, such strategies would be especially unwise.
Or think back to the 1981 drama Body Heat, starring William Hurt as Ned, the sleazy lawyer, and Kathleen Turner as Matty, the unhappy wife of a wealthy businessman. As the two begin a sultry affair and conspire to arrange the husband’s estate so everything passes directly to Matty, there are all sorts of possibilities for helpful information on estate planning.
But the director decided instead to carry the movie’s title through so many torrid love scenes and burning buildings that the lesson on the appropriate method for proving a will – namely, make sure you have at least two witnesses — is lost in the ashes.
I’ve found, in fact, that movies with no real financial content whatsoever nevertheless can deliver a powerful punch in terms of good money advice. And so I offer what I consider the must-be-seen-again classics to get you financially prepared:
When Harry Met Sally
Few could forget the scene when Meg Ryan shows Billy Crystal over a café lunch that any woman can get a man to believe she’s been satisfied, even when she hasn’t. So persuasive is Sally’s performance that the lady sitting at the next table points to Sally and tells the waitress: “I’ll have whatever she is having!”
In today’s volatile security markets, rattled investors often decide that they want what someone else is having without necessarily knowing what that is or whether it is good for them. People buy stocks because other people are buying, and the same is true for selling. Annuities and hedge funds are often sold to individuals as the greatest thing since sliced bread, but few non-experts really understand them.
Talk to a financial professional about what makes sense for you, given your circumstances and goals. Stick to the menu of sound strategies and don’t let others’ reactions influence your choices.
Gone with the Wind
For many American families, making ends meet requires finding room in their discretionary expenses (e.g., home decoration) to cover essential needs (e.g. health insurance). Whatever you think of Scarlett O’Hara, you have to admire her resourcefulness and pluck, especially when the going gets tough. Any woman willing to sacrifice her “window treatments” to make a dress she can wear to meet with a prospective lender – the dashing and wealthy Rhett — really understands the difference between wants and needs.
Debt is not the answer, as Scarlett discovers when Rhett sends her away empty-handed. She then does what many people today need to do: learn new skills and look for a better paying job. Even a Southern belle can remake herself into a sawmill owner.
My Cousin Vinny
According to research conducted by the CFP Board, consumers are most likely to seek out the help of a financial professional when they face a crisis. Further, they are apt to choose a professional based on a recommendation from a friend or family member, rather than doing the necessary due diligence to ensure that the professional is a qualified, ethical professional.
But, as the two young college students in My Cousin Vinny find out, choosing a professional when you are backed into a tight corner is not always a good strategy. Nor is using whatever professional your mother recommends because “he is part of the family.” To be fair to Vinny, a personal injury lawyer with no trial experience, he learns a lot on-the-job and no doubt will be a better defense attorney for the next accused felons.
However, in the case of a consumer needing financial counsel, it’s best if the professional is certified and has demonstrated experience and competence in the financial issues of concern rather than still building his resume.
The next time you finish watching a beloved classic from your film library, consider building a relationship with a financial advisor before you actually need one. By all means, ask your mom for her recommendation but also do some objective research on your own. Additionally, you can go to www.letsmakeaplan.com to find a CFP® professional who is qualified by experience, education and ethical standards to help you with your specific needs.