Financial Blog

There are heroes in films, but when it comes to real life, you can’t wait around for a hero to come save the day, especially where finances are involved.

But you can turn yourself into a financial whiz if you sit up and pay attention to these four films that offer solid lessons in finance that you can apply to investing.

Here’s our list of those movies and what we’ve learned:

“Let me tell you something. There’s no nobility in poverty. I’ve been a poor man, and I’ve been a rich man. And I choose rich every f***** time.”

The Oscar-nominated film “The Wolf of Wall Street” follows the adventures of Jordan Belfort (Leonardo DiCaprio) — a cutthroat stockbroker in the 90’s who founded the infamous brokerage firm Stratton Oakmont. Belfort realizes early on that he can make huge sums of money without considering his clients’ welfare. Belfort de-frauds investors with ‘pump-and-dump,’ in which he sells cheaply purchased stock at a higher price.

At its core, “The Wolf of Wall Street” demonstrates the lengths people go to to amass wealth. In the end, greed gets the better of Belfort and he self-destructs. He’s forced to help the Federal Bureau of Investigation take down his firm along with his friends in exchange for a lighter sentence.

Lesson: Belfort’s rapid rise to wealth was his own downfall because he ignored the rules and the wisdom offered to him. His goal was to make more money in the fastest possible time. When investing, don’t be tempted by the lure of instant gratification. Don’t be fooled by investments whose promises are too good to be true. Stop, think, do your research, get the proper advice. Turn to experts for insight instead of resorting to hearsay or shady dealings just to get ahead.

With Unit Investment Trust Funds (UITFs), you can get your feet wet in the world of financial instruments by investing in a fund that is managed by experts to ensure quality returns. It’s perfect for those that don’t have enough financial know-how to make big investing decisions.

“What would you do if you were stuck in one place and every day was exactly the same, and nothing that you did mattered?”

This cult classic tells the story of Phil Connors (Bill Murray), a TV weather reporter, who is doomed to repeat each day of his life as Groundhog Day. At first, Phil uses his knowledge of what happens as the day repeats itself for selfish ends: he steals money from a bank and tricks a woman into sleeping with him.

But soon he realizes that he can’t escape Groundhog Day. Even if he kills himself, he’s alive the next day. The chain is broken when he gives up his ego, accepts his fate and becomes a better person.

Lesson: Have you ever found yourself stuck in a financial rut? Making the same mistakes in investing is the fastest way to run your funds dry. Sometimes, we allow our egos to trick us into thinking that we have control over the market in the short term, which gives a false sense of security, especially if everyone else is doing it: Buying when the market is high; selling when the market is low, for instance. But it’s not that simple.

Manage your risk. Going with the herd and not weighing your risk when uncertainty hits the market is essentially gambling your money away. Like Phil, you need to take a step back to reevaluate and look at the big picture.

The best way to minimize risk is to spread your investments across various asset baskets. In other words: Diversify.

With UITFs, your investment is, by default, diversified into stocks, bonds and other similar funds. When you invest with Security Bank UITFs, you get to choose from investment options for every risk appetite — from conservative, moderate, to aggressive. If you’d like to be doubly sure of your risk profile and what to invest in, you can try out their easy-to-use investment calculator.

“I feel lethal, on the verge of frenzy. I think my mask of sanity is about to slip.”

In this creepy thriller, Christian Bale plays the role of Patrick Bateman, a wealthy investment banker living in Manhattan. Together with his fiancée, he leads the high life — one that can make anyone jealous. But as the film unfolds, it’s revealed that the vain and obsessive Bateman has an alter ego: that of a delusional mass murderer.

Lesson: While Bateman does not display any real financial acumen in the film, the real lesson here for investors is not to turn psycho, especially when it comes to tracking your investment. Investing requires patience, common sense and, most importantly, sanity. A calm and composed investor will be more successful than an emotional and impulsive one.

Investors should reduce stress in their lives to maintain level-headedness. Investing can be quite a heavy task with the amount of research and monitoring involved but there’s a way around it.

With UITFs, you can save yourself from the heavy lifting involved because the fund managers will do that for you. If you’d like to see how the managers and your UITF are faring, you can always check the NAVPU (net asset value per unit) — a value that represents a fund’s per share of market value — which is updated daily.

“Hermione! When have any of our plans ever actually worked? We plan, we get there, all hell breaks loose!”

In Harry’s last big screen adventure, he and his friends venture into Gringotts Wizarding Bank to retrieve an item that is vital to defeating his arch nemesis, Voldemort. The object is stashed within the vaults but getting in and out of the bank run by goblins is a challenge. Their initial plan fails, mainly because their ‘inside man’ turned out to untrustworthy. With plan B, they manage to wiggle their way out of a very sticky situation.

Lesson: Always have an escape clause and understand exactly how it works. A big part of being an informed investor is understanding the costs and benefits of various investments. While some investments may yield larger rewards, they tend to be less liquid, which may pose a problem if you need the money right away.

A UITF is liquid type of investment, which means you can redeem your investment in the fund on any banking day. With a low minimum investment of just ₱10,000, you’ll hardly be pressed for cash. That’s not to say that UITF investing is risk-free. As with all investment instruments out there, income is not fully guaranteed. But if you’re looking for a low maintenance, long-term financial investment, UITFs may be the best way to go.

If you’re ready for other types of investment, there are mutual funds, fixed income securities and insurance plans, among others. Check out Security Bank’s other investment options here.

Want to learn more about investing and UITFs? Visit www.securitybank.com/uitf or email [email protected]

This article was originally published on CNN Philippines, November 16, 2016