fbpx

GRFTFS at the Movies – Bridesmaids

Financial Lessons From Bridesmaids

Originally aired 8/18/2021

Watch

Are you ready to “paaarrrtyyyy?” We are, because the Get Ready For The Future Show is headed to the movies, and the GenWealth Dream Team is bringing you financial advice from Bridesmaids!
 
You’ll learn:
  • The worst mistakes to make when giving a toast (and working toward financial independence)
  • Why bridesmaids dresses are like investments
  • And MORE!
Downloadable Content:

10 Ways to Shift Your Perspective of Financial Planning

Links:

15 Minute Retirement Checkup

Listen

SHOW NOTES

Cake Baby

  • We’re going to the chapel, because we’ve got financial lessons from the movie Bridesmaids!
  • Did you know – it can cost up to about $1,500 to be a bridesmaid! (Source: David’s Bridal)
    • Dress: <$100 - $300
    • Engagement party / bridal shower: $25 – $150
    • Bachelorette party: up to $750
    • Gifts: $75 – $300

#1 – Know how to deal with timing (sequence) risk

  • Annie, the main character, opened her cupcake shop – Cake Baby – during a recession, and we find out early in the movie it didn’t work out, and she had to shut it down.
    • You can have a great idea, but if you execute it at the wrong time, it could put you in a bad spot.
  • It’s a scary thought, but the same is true for your retirement.
    • Sequence risk is one of the three biggest risks to your retirement.
    • Let’s talk about James and Joe. These fictional characters will help us to illustrate a very important point about the possibility of retiring at the wrong time.  James and Joe shared a lot in common.
      • They both worked for the same company, and coincidentally they arrived at their respective retirement dates with exactly the same amount of money in their 401k plans, which happened to be $500,000.
      • They both withdrew 5 percent of their balance at retirement from each of their accounts to create an income for each of their families to live on.
    • In fact, the only difference between James and Joe was the year in which they retired.
      • See, James is 10 years older than Joe. That means James retired in 1966 and Joe followed along 10 years later and retired in 1976.
    • Now, with everything other than their retirement dates in common, do you think James and Joe had similar outcomes to their retirement?
      • James And Joe both invested in a mix of stocks and bonds, represented in this illustration by the S&P 500 and 10-Year Treasuries.
      • By the way, both men increased their income according to the inflation rates each year to keep up with the rising cost of living.
    • James started with $500,000 in 1966 – 18 years later in 1982, James was completely out of money.
    • Joe started with $500,000 in 1976- and because of the returns he encountered during his retirement, Joe had actually grown his money to over 1.2 million dollars 18 year later in 1992.
    • DISCLOSURE: This is a hypothetical example and is not representative of any specific situation. your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing. Indices are unmanaged and cannot be invested into directly. Past performance is no guarantee of future results.
  • You can’t predict what the market will do. So, the question remains, how do you address this risk?

Gracias Para Vivar en La Casa

  • #2 – Know what you don’t know
  • At Lilian’s (very expensive) engagement party, Annie and Helen get into a back-and-forth battle of who will have the last speech of the night.
    • After a few times taking the mic from each other, Annie gets desperate and says:
    • “Speaking of Consuelo, Lillian and I took Spanish together in school. And so I want to say to you and to everyone here…gracias para vivar en la casa. En la escuelas and el azul marcada. Tienes con vivir en las…forstuatsa, and gracias.”
      • Direct translation: “Thank you for to live in the house. In the schools and the blue market. You have to live in the… forstuatsa, and thank you.”
      • What she said made no sense, and one of the words she said wasn’t even a word!
    • She tries to save herself by singing a very off-key rendition of “That’s what Friends are For.”
  • While you may be thinking “I’d never get myself in that situation,” you could be experiencing something similar in your financial life.
    • You learn something on the internet and learn just enough to be dangerous (but you don’t actually know what you’re saying).
    • You try to come back and save it but you end up making things worse (or singing “That’s What Friends are For”).
    • Let us give you a piece of advice: just because you read it online doesn’t mean it’s right for you.
      • Furthermore, just because it’s right for a friend doesn’t mean it’s right for you.
    • The benefit to having a personalized plan is that it’s put together with your goals in mind.
      • And, it’s not set in stone. If you hear about something you’d like to invest in or have questions about, you can bring it to your advisor to discuss what it would look like for you individually!
        • Your plan grows and evolves with you.
      • Feeling secure about your future starts with how you see your future.

I’m Ready to Paaaarrrrty

  • #3 – There are consequences to your actions
  • Before they go off for dress fittings, Annie takes Lillian and her bridesmaids to a place called Churra-Chi for some Brazilian food.
    • This restaurant is in a not-so-great part of town and appears to be in an old, run down steak place. The waiters walk around with different types of meat skewered on swords, and there are very few other customers there.
      • This should have been a heads up that they should have left.
    • After Lillian and all the bridesmaids (except Helen, who seems to know better) put away a decent amount of Brazilian food, they go off to their fitting, and end up in an emergency situation of sorts in the dressing room.
  • Eating questionable Brazilian food can lead you down a bad road.
    • Making questionable investments, participating in “get rich quick” schemes, or banking your entire future on a specific investment can do the same.
    • Signs you should leave your financial advisor’s office:
      • One size fits all investment
      • Don’t talk about a plan
      • Don’t answer your question
  • #4 – Fear makes you do crazy things
    • On their way to Vegas for Lillian’s bachelorette party, Annie’s fear of flying caused her to get in a little trouble.
      • She started taking some measures to calm herself down, but an announcement that turbulence was imminent was all she needed for a full-on freak-out.
        • Helen gave her options that she had tolerance for, but Annie didn’t – be sure you’re taking advice from someone who understands your situation
      • While the plane may have hit a little turbulence, the flight would have been just fine if she had sat where she was supposed to and ridden it out.
      • Her fear caused chaos and a higher likelihood of something actually going wrong.
        • This really was a case of a self-fulfilling prophecy
      • Fear also doesn’t mix well with your finances.
      • Four fears that cost you money:
        • Fear of missing out (FOMO)
          • FOMO can lead you to spend money in all kinds of ways you normally wouldn’t. In a 2018 survey by Credit Karma, nearly 40% of Millennials admitted to spending money they didn’t have to keep up with their friends.
        • Fear of falling behind
          • Fear of falling behind can lead to lifestyle inflation, otherwise known as “keeping up with the Joneses.”
          • Though you probably haven’t built a mansion to keep up with your neighbors or friends, their habits could be influencing you to overspend in other ways. For instance, you might decide to build a deck on your house, even if you don’t expect to use it, just to avoid being the only house on the block without one. You could buy designer clothes for your kids because all your friends do, or throw them fancy birthday parties because you don’t want your celebration to seem shabby compared to theirs.
        • Fear of failure
          • Suppose you’re thinking of starting a small business. However, you’ve seen data from the Bureau of Labor Statistics showing that roughly half of all new businesses fail within their first six years. Faced with that fact, it just seems too risky to trade in a steady job, even a job you hate, for a business venture you can’t be sure of. What you overlook in this situation is that you’re certain to fail if you never try.
          • Fear of failure could also keep you from changing careers because you’re afraid no one will hire you in a field where you have no experience. Or it could keep you slogging away in graduate school because you’re convinced you won’t be able to get a job without that advanced degree.
          • Mihaela Jekic of Money for Meaning estimates that her decision to keep working toward her Ph.D. for fear that employers would reject her if she “settled for a Master’s” cost her over $300,000 in lost wages and investment returns.
        • Fear of losing money
          • If you’re so scared of losing money that you refuse to invest in anything but the lowest-risk investments, such as CDs and Treasury bonds, you’ll be stuck earning much lower returns than you would if you put a portion of your money into stocks.
          • The best yearly interest rate you can earn on a savings account right now is around 2%, according to Bankrate.
          • Worse still, this figure doesn’t account for the way inflation eats into your overall returns. If inflation over the next 10 years averages 2.5% – a pretty typical level – then a bank account paying 2% won’t even earn enough to keep pace with it. That means the real purchasing power of your money will actually decline.

Hold On For One More Day

  • #5 – Know your goal and pursue it
  • Sometimes you need to take extraordinary measures toward your goal:
    • Annie wanted the cop to talk to her, so she pulled a bunch of crazy stunts until he had no choice but to speak to her.
    • Now, we’re not by any means suggesting you break laws to get to your goal like Annie did. But, we do think it’s important to know your goal and pursue it.
  • Like bridesmaids dresses, investments aren’t one size fits all
    • Each person has different needs, goals, and risk tolerance.
  • We believe the single most helpful tool to help you pursue your goal is a personalized financial plan, on paper, on purpose.
    • A plan helps you minimize the other risks we’ve talked about during this show.
      • With a plan, you’re less likely to make rash decisions out of fear because you know you have measures in place to help you still work toward your goal.
      • With a plan in place, you’re less likely to pursue a “get rich quick” scheme (because you know that playing the long game will be better for you).
      • With a plan in place, you’re less likely to take generic advice from the internet that may have nothing to do with your situation.
      • We can’t promise it’ll keep you out of an emergency situation if you eat questionable Brazilian food. That’s on you, sorry.
    • We know typically you have to have a certain amount of money or connections to work with a financial advisor – that’s never the case at GenWealth.
      • One of the biggest disservices our industry has done is to take financial planning—a powerful tool for cultivating individual wealth and security—and make it inaccessible to the people who need it most.
      • We see financial service as a public service, and anyone who wants the support should be able to get it. That means we have no minimum requirements and no high bar to entry.
      • If you want the support, we want to talk to you.
    • Whatever stage of life you’re in – whether you’re just getting started or you’re already in retirement and wondering how to spend down your assets – we’ve got a program for you.
      • We’ve got three options – Moneyworks, Moneyguide, and Ready to Retire
      • Click here to visit getreadyforthefuture.com to learn more and find out which is the right fit for you!
    • At one point toward the end of the movie, Annie was throwing herself a pity party, and she needed a friend (one of the other bridesmaids who, up until this point in the movie, had been mostly overlooked by the rest of the characters), to help her.
      • Even if you’re already a GenWealth client or are already set with a financial plan, odds are that someone in your life could benefit from a little pep talk with their finances.
        • If you know of someone who could benefit from one of our programs, connect them with us!
        • You could be what they need to get started on the road to financial independence!

FINAL THOUGHTS

Financial lessons from Bridesmaids:
      • Know how to deal with timing (sequence) risk
      • Know what you don’t know
      • Know that there are consequences to your actions
      • Know that fear makes you do crazy things
      • Know your goal and pursue it
If someone gives puppies as party favors, only take one.
      • Taking any more than that would be improper (and expensive).
Feeling secure about your future starts with how you see your future.
      • 10 ways to shift your perspective of financial planning with our free download – What’s the Plan? A Manifesto for Your Life, Your Worth, and What Happens Next
      • Click here to get your free copy.