In the recently-released Netflix documentary, the financial lives of four families are portrayed quite closely to depict some of the common problems they encounter that could possibly result in inadequate savings for their future.
There is an NFL player who does not know what to do with his money, a couple that has started to earn more but not trained in investments, a young woman with massive student loans and a girl who does odd jobs to make her ends meet.
Although the problems which these characters face are characteristic of the young middle class urban American households, but some of their problems are prevalent among their young Indian counterparts who stay in big cities .
There are some problems shown in the movie such as financial struggle before starting a family, mounting debt, running a family without a budget, being clueless about the required savings for a nice and timely retirement, struggles in living paycheck-to-paycheck and finding it hard to pay off the loans.
Here we cull out some of the nice, insightful and useful money-related advice and reproduced here:
1 Learn to frugal down: As one of the character says in the movie that we spend a major chunk of our earning on the big three – food, housing and transport. If we can cut down a little on each of these expenses, we can save significantly.
There is a limit to which you can frugal down but there is no limit to how much you can make with the money you save.
2. Run a side hustle: One can try and run a side business alongside to earn some extra cash.
In the movie, one of the characters Lindsey was told to make sketches of dogs and to present them to the dog owners so that she can pitch her side gig of walking the dogs.
3. Investing in index funds is rewarding Investing money in an index funds is a sure-fire way to invest for a beginner. Index funds comprise a basket of stocks from a number of sectors including finance, retail, oil & gas, healthcare, technology, airlines, among others. It is the smart way to make money the slow way.
“Put money in the S&P 500, honey, and it is gonna really build over time,” says Ross Mac of Maconomics, one of the movie’s characters.
The movie shows about Teez Tabor, a football cornerback of National Football League (NFL), whose income stream stopped because of an injury. The financial advisor told him to invest in the index funds because the fund tends to rise around 10 percent in one year.
4. Avoid splurging right after a windfall: When you get a windfall of money, you should refrain from splurging it because before you know it, you would be left with hardly anything. The movie shows that the NFL player Teez was given $1.6 million at the age of 21. After taxes and agent fee, he was left with 863K.
Soon after, he bought a house for mother and himself; travelled to Paris, Saint Lucia, Hawaii, bought jewels, and was left with only $280K. It was then he realised that he should go slow on spending to refrain from losing all of it.
5. Buying things you need not what you deserve: The movie shows Ariana, one of the characters in the movie, who was the first one in her family to graduate had $108K student loans.
Despite a whopping outstanding loan, she was regularly spending $100 on weekend brunch, buying new clothes, and renting an apartment in New York she could not afford. She was doing all this without having any savings.
Instead of using her earnings to first pay off her dues, she was using credit card to pay her bills for things she did not need.
Spending what is important and not simply because you think you deserve this. "I could not afford those things, but i used to think that i deserve this after a hard week," she said.
All in all, the movie shows that it is vital to know about savings and investments. So, some of the advice given in this documentary is quite useful, and can be used as a starting point.
But still, it is not a choice not to know about investments, and more so because nobody teaches us these things at home or school. “Savings and investments, it is the language not taught to us by our parents and grandparents,” says Tabor, and rightly so!