By Josh Katzowitz, WCI Content Director
I loved watching movies about money long before I ever became the WCI content director, and reflecting back on it, I didn’t even know what was happening half the time. When Gordon Gekko is talking about making $800,000 in Hong Kong gold, is the layperson supposed to know what that means? When Billy Ray Valentine and Louis Winthorpe III, against all odds, make a killing in the commodities market while putting their rivals into massive bankruptcy, is the casual investor supposed to have any idea what’s happening?
Now that I’m slightly more financially literate, I can rewatch my favorite money movies and get even more appreciation out of them. It’s like peeling the financial onion to reveal yet another layer of information. And lessons most certainly can be learned.
My Favorite Movies About Money
Wall Street
Really, the best part of this movie is the absolutely hideous 1980s decoration trends. Take a look at just how gaudy this apartment wall looks. It’s so bad but I love it so much.
Aside from the ostentatious home décor, let’s take a look at this clip where Lou Mannheim gives Bud Fox some words of wisdom that we occasionally discuss here at The White Coat Investor. We’re not so much into Gordon Gekko’s “Greed is good” philosophy. But when Mannheim—who one Medium.com writer calls “the conscience of Wall Street and the sole, clarion call of ethical behavior in a sea of amoral, greedy, and criminal souls”—talks about his own philosophy, it makes plenty of sense. Even if he is in charge of a bunch of stock-pickers.
As Mannheim said, “Stick to the fundamentals—that’s how IBM and Hilton were built. Good things sometimes take time . . . Remember there are no shortcuts, son. Quick-buck artists come and go with every bull market. The steady players make it through the bear markets . . . The main thing about money, Bud, is that it makes you do things you don't want to do.”
Toward the end of the latest bull market in 2021, what were the perceived shortcuts you could take? Cryptocurrency, for one. What would ol’ Lou have to say about crypto and NFTs? He’d probably be still waxing on about Roosevelt and Nixon and about how the latest financial trends have no fundamentals.
Even Gekko, the stock-picking champion of the movie, understands that active money management isn’t a great idea. As he says in this clip, “I don’t throw darts at a board. I bet on sure things . . . You wonder why fund managers can’t beat the S&P 500? Because they’re sheep, and sheep get slaughtered.” That’s right, Gordon. Index funds all the way, baby!
Boiler Room
My absolute favorite movie on this list is the one that performed the worst at the box office (accounting for inflation, Wall Street made 58% more money and Wolf of Wall Street made 67% more than Boiler Room did in the theaters).
This the story of a young man who quits his job of running an illegal casino out of his apartment and goes to work for what’s called a chop shop brokerage firm, the kind of organization that, as InvestmentNews writes, unloads “penny stocks they secretly owned on unsuspecting investors.” In the film, the FBI gets involved with the protagonist, Seth Davis, and the movie's big-name cast (Ben Affleck, Giovanni Ribisi, Vin Diesel, Scott Caan, and Nia Long).
It’s so much fun to watch. And yet there are also some good lessons here, especially for physicians who might fall for the sweet talk of a stockbroker. Just watch how they play this doctor (who clearly doesn’t subscribe to the WCI newsletters!) and take a bunch of his hard-earned money that he’ll likely never see again.
There’s also a good example of why high earners should actually save their money (and, in some cases, live like a resident while driving a cheap car). As mentor Greg Weinstein explains to Seth, some workers at the firm might make $1 million a year but still can’t get a loan for a Honda. “They may have a Porsche,” Greg says, ahem, while driving his expensive sports car, “but they don’t have $10 to put in the gas tank.”
Wolf of Wall Street
Thinking about using a stockbroker to earn you millions in retirement? Just listen to the character of Mark Hanna, played by Matthew McConaughey, and hopefully, you’ll immediately trash that idea.
As Hanna explains to Jordan Belfort just as Belfort is beginning his stockbroking career in 1987 (with all the cursing deleted):
“Name of the game? Move the money from your clients’ pocket into your pocket . . . No. 1 rule of Wall Street: Nobody, I don’t care if you’re Warren Buffett or Jimmy Buffett, nobody knows if the stock is going to up, down, sideways, or in circles, least of all stockbrokers . . . We don’t build anything. If you have a client who bought stock at 8 and now it’s at 16, he’s all happy. He wants to cash in, liquidate, and take his money and run home. You don’t let him do that. That would make it real. No, what do you do? You get another brilliant idea, a special idea. Another situation, another stock to reinvest his earnings and then some. And he will every single time, because they’re addicted. You just keep doing this, again and again and again. Meanwhile, he thinks he’s getting rich. Which he is . . . on paper. But you and me, the brokers, we’re taking home cold hard cash via commissions.”
Also, if your stockbroker or financial advisor starts doing this while tooting a little coke during their lunch hour, maybe think about running the other way.
Trading Places
I’ve seen this movie dozens of times. It’s great and funny and a fantastic time capsule for 1983. But I’m still not quite sure how Billy Ray and Louis got the best of Randolph and Mortimer. The whole commodity/frozen orange juice futures storyline still confuses me.
First, a quick explanation on how commodity brokers make money no matter what happens with the market.
Notice how Randolph and Mortimer are in total agreement with Mark Hanna from Wolf of Wall Street. Anyway, I’ve always had a hard time figuring out exactly what happens in the climactic scene. Which is actually a good lesson. Don’t invest in things you don’t understand. You can make plenty of money by keeping it simple (if you do want to understand what happens at the end of Trading Places, here’s a good YouTube video for that).
Money Song of the Week
One of the first times I heard Nina Simone was at the end of an episode of Entourage when “Sinnerman” began playing during the credits. It moved something within me. It was her voice, her piano, and the increasing intensity of the drumming. Simone is one of those artists who I really should listen to more often, because, besides being a fantastic vocalist, she has something important to say. Even when she’s using someone else’s words.
Take, for instance, “Rich Girl” off Simone’s 1979 album, Baltimore. You probably know “Rich Girl” from Hall & Oates. The original version is more poppy and upbeat (which might be why it was to No. 1 on the Billboard chart when it was released in 1977). But Simone has a different take on the song, which you can hear in her live version below.
When Simone sings Daryl Hall’s lyrics, she’s grittier. While Hall sings with an almost sigh of inevitability, Simone actually sounds angry and exasperated about the entire scenario. It sounds like she’s scolding you when she sings,
“Don't you know, don't you know/That it's wrong to take what is given you?/So far gone, on your own/You can get along if you try to be strong/But you'll never be strong 'cause
You're a rich girl, and you've gone too far/'Cause you know it don't matter anyway/You can rely on the old man's money/You can rely on the old man's money.”
Perhaps one reason Simone shows her disgust is because the original subject of the song for Hall was not actually a woman. It was a man.
As Stereogum explains, “‘Rich Girl’ isn’t about a girl—or, at least, it wasn’t at first. Hall wrote the song about Victor Walker, his girlfriend’s ex. Walker’s father had owned the Walker Bros. Original Pancake House, a diner chain in Chicago, as well as a bunch of KFC franchises. One night, Walker came to Hall’s apartment to hang out, and Hall thought that he was a spoiled weirdo who’d never face any consequences for his actions because he was rich. Hall originally wrote the song as ‘Rich Guy,’ but he decided that ‘Rich Girl’ worked better. Maybe he figured that America would have an easier time with a class-based [trash]-talk song if the target was a woman. If that’s the case, he was right.”
Simone, though, could be singing about a rich man, and if that’s the case, her version works even better. It certainly impressed Hall.
“Wow, it took me by surprise when she did it,” Hall told the Baltimore Sun in 2018. “I liked it. I always like it when people do things with our songs, especially somebody I respect as much as Nina Simone. It was an interesting rendition.”
Tweet of the Week
Sometimes a good financial decision makes you feel like royalty.
People that locked in a 30-year fixed mortgage at 2.7% in 2021 pic.twitter.com/sWvlWIGKX9
— StockMKTNewz – Evan (@StockMKTNewz) January 29, 2023
What are your favorite money movies? What kinds of lessons have you taken from them? Comment below!
[Editor's Note: For comments, complaints, suggestions, or plaudits, email Josh Katzowitz at [email protected].]
Yes, I agree. Some great movies there…one comment though…Gordo’s quote “You wonder why fund managers can’t beat the S&P 500? Because they’re sheep, and sheep get slaughtered” is anything but a call for index investing. Gordo is saying that the sheep don’t beat the S&P 500 because they are not aggressive! If that was a call for index investing then the movie would have been ALOT more boring! 🙂
Sad to see Brewster’s Millions didn’t make the list. One of my favorites. I showed it to my kids when I realized they were going to have significant inheritances.
Great movie. I watched it as a kid many times.
Interesting idea to show it to the kids. I’m not sure whether it would accomplish anything. I don’t think my attitude to money was impacted by it – definitely didn’t make me thing that excessive money would be bad!
The moral of the story is that at the beginning he thought spending a bunch of money would be fun but at the end it lost its excitement and became work. And he was then prepared to get his real inheritance.
classic! Richard Pryor! brings back memories!
even more classic, I have to say It’s A Wonderful Life as a classic money movie though many would not really think of it as a money movie.
Also the Pursuit of Happyness. If there was any stockbroker deserving of investor’s money, it was that dude.
Its a Wonderful Life is a classic that never gets old.
Dude, this movie has everything you need to know about personal finance if you just pay attention. Trust me, it’s true. Let me explain.
First of all, the main character, George Bailey, was always putting others first and sacrificing his own dreams for the sake of his family and community. While that’s admirable, it’s also a recipe for financial disaster. You have to take care of yourself first before you can take care of others.
As George’s financial troubles escalate, he learns that he can’t do it all alone. He turns to his friends and family for help, which is another essential lesson in personal finance. No one can do it all alone, and asking for help when you need it is a sign of strength, not weakness.
But the most important lesson comes at the end of the movie when George is on the brink of financial ruin. Clarence, his guardian ankle, reminds him of the true value of money when he says, “No man is a failure who has friends.” That quote hit me hard because it’s so true. In the end, it’s not about the money you have, but the people you surround yourself with. Charity is important too. It needs to be true charity, not jerk moves like donor-advised funds.
The movie to me is really a parable about the importance of having a financial plan and setting priorities. George’s financial troubles could have been avoided if he had a plan and stuck to it. Instead, he made impulsive decisions that led to his downfall. So, it’s crucial to have a budget, save for emergencies, and prioritize your financial goals to avoid any financial setbacks. Overall, the movie may seem like a feel-good holiday flick, but it’s full of valuable lessons that we can apply to our financial lives
I still can’t forgive Uncle Billy for misplacing the money.
Yes, this is fantastic! Haven’t thought about Brewster’s millions since I was a kid! Thanks for the trip down memory lane! It’s a great lesson and I see why you showed your kids. Richard Pryor and John Candy were incredible.
Trading Places:
https://www.npr.org/sections/money/2013/07/19/201430727/what-actually-happens-at-the-end-of-trading-places
I hate debt, and was close to paying off the mortgage on our primary house.
Ended up doing a cash out refinance in 2021 to free up money to buy a small vacation home in the mountains where we ski every weekend every winter. It has an extra unit we rent out year round that covers all routine expenses (utilities, taxes, and some extra towards upkeep).
New rate of 2.375%, but for 15years. But now wishing I would have gotten a 30yr mortgage on it given how low rates were. Oh well can’t complain too much. It turns out to have been relatively inexpensive and nearing neutral for a consumption item (We would have done seasonal rental if we didn’t buy).
While it’s not exactly the kind of investing that individual doctors are likely to do, I’d include the every scene from The Big Short. You wouldn’t think a movie about mortgage backed securities and collateralized debt obligations and credit default swaps would be that interesting. But it is. And the way that they explained it with lots of celebrity cameos makes it even better.
Here are some of my favorite movies that teach great lessons about money,
So, first up is “Pretty Woman.” I mean, who doesn’t love a good rags-to-riches story, right? Julia Roberts’ character, Vivian, says it best when she declares, “I want the fairy tale.” But as we all know, financial security is also a crucial part of that fairy tale. Richard Gere’s character, Edward, reminds Vivian of this when he tells her, “You’re missing a very important part. Edward has money. Lots and lots of money.” Plus, the film teaches us about negotiation and standing up for ourselves.
Next, let’s talk about “Crazy Rich Asians.” Now, this movie is all about the lavish lifestyle of a wealthy family in Singapore, but it also shows us the dangers of keeping up appearances. As Peik Lin, played by Awkwafina, reminds us, “You know, everybody thinks they have good taste, but most people just have the same taste.” So, just because something is expensive, it doesn’t mean it’s worth the money. And the movie also teaches us the importance of choosing love over money.
Last but not least, I have to mention “The Wedding Singer.” This movie subtly has plot points that reinforce what I learned from Chapter 4 of White Coat Investor: A Doctor’s Guide to Personal Finance and Investing (“Medical School and Your Wealth”). White CAs Adam Sandler’s character, Robbie, tells us, “I don’t know much about this crazy, crazy world, but I do know that if you don’t let us [musicians] play, then you can take your Wop-bop-a-loo-bop and shove it up your ass.” It’s a great lesson in the importance of standing up for what you’re worth, even if it means risking your income.
Some great movies that not only entertain us but also teach us a thing or two about $$$$.
I never would have thought about The Wedding Singer. Great call.
Can we include “Fun with Dick and Jane” in there? Especially the credits at the end with “Special Thanks” to Enron, Tyco, and Worldcom lol
My favorite is the Big Lebowski. The dude mentions taking a check would bump him up into a hire tax bracket which over the years struck me as less of a joke. He has a small place in Venice which is expensive but he doesn’t work. The other Lebowski calls him a bum but he’s actually really frugal. He’s financially independent! Am I wrong???