Independence Day (1996 Film):
Financial and Life Lessons

 

Today is July 4th, and all across America, families will be celebrating our nation’s independence. Hopefully, you have the day off from work and can enjoy some nice weather, good food, and a cold drink of your choice.

 

When you think of the 4th of July, you normally think of children waving sparklers, barbecues, and fireworks. Besides the aforementioned Americana, you may also think of the movie Independence Day, where we celebrate Will Smith and Jeff Goldbloom fighting; not just for the nation’s, but the world’s independence.

 

Never one to pass up an opportunity to combine finance and science fiction, I reached out to my favorite money bloggers and asked them if they wanted to team up.  The responses I received were fun and interesting.

 

ESI Money has been tremendously supportive of the blog and he was the first person I turned to. He chooses to focus on a particular quote in the movie and I think he did a great job.

 

 

ESI Money

 

“If you feel compelled to leave these cities, please do so, in an orderly fashion.” – President Thomas J. Whitmore:

 

Anyone living in a high cost of living city should feel compelled to leave because where you live has a big impact on your net worth. It’s tough enough for most people to save a large percentage of their income. When you live in a high-cost area, you are putting yourself at a huge disadvantage. Move to a low-cost area, live in a reasonably-sized house, and get to financial independence much sooner.

 

If you feel compelled to leave these cities, please do so, in an orderly fashion. - President Thomas J. Whitmore, Independence Day. Happy Fourth of July! Click To Tweet

 

Scott at Making Momentum is one of the hardest working bloggers I know. He helped me kick off my Best Of The Web series as the first guest host and he did an amazing job. I knew to reach out to him that he would do an amazing job. Rather than focus on a quote, he used the memorable scene of Will Smith’s character punching an alien in the face as an analogy.

 

 Scott from Making Momentum 

 

Sometimes You’ve Just Gotta Punch Debt In The Face

 

 

 

Will Smith crashed into the desert after a tantalizing battle in the sky with one of the alien ships. Fed up, clearly stressed and angered from the situation at hand, Will Smith busts open the cockpit and smack the alien in the jaw, proudly proclaiming “Welcome to Earth”.

 

When you’re in the battle for financial betterment, sometimes there is only one option left: punch debt in the face. You’ve said enough is enough and you’re fighting for your financial life. Your mindset is now set on conquering that debt. “Welcome to Debtfreevile”.

 

It might be a long, drawn-out fight. Gradually, that principal owing will decrease.

 

Grinding and pressing forward, like Will Smith dragging the unconscious alien through the scorching desert, you might have moments of frustration along the way, comparable to Will Smith flipping out during the long desert trek. But you’re committed and the only option is a victory.

 

With the proper mindset, you can overcome the great alien evil that is consumer debt. To win the war, you’ll need a battle plan through a commitment to beating debt and a repayment strategy to do so. Plus, you can use reinforcements in the way of additional funds to throw against that debt via side hustles and cost-savings in other areas of your budget.

 

Eventually, you blow up that invading mothership and defeat the threat that was your debt.

 

The first step that got you there was punching that debt in the face.

 

I appreciate ESI Money and Scott for contributing; I hope you check out their blogs.

Aaron at Personal Finance for Beginners

 

President Thomas J. Whitmore: Where do you get funding for something like this?

Julius Levinson: You don’t actually think they spent $20,000 on a hammer, $30,000 on a toilet seat, do you?

 

A budget is one of your most valuable personal finance tools.

 

With a budget in place, every dollar you earn has a specific purpose to help you reach your financial goals. A budget is key to progressing past the point of living from paycheck to paycheck.

 

Without a budget, you might wonder how a large chunk of your money was vaporized by an atomic alien laser beam of unidentified expenses. One morning, you wake up to a notification that your paycheck had been deposited into your checking account. By the end of the same day, it’s gone.

 

Budgets give you a specific financial plan. This works because, most of the time, your income and expenses will be fairly consistent from month to month.

 

But what should you do when that isn’t the case?

 

In the example of the Independence Dayscene quoted above, we see that it can be helpful to fudge the numbers in your budget a little bit – provided that you’re doing so in a way that plays to your financial advantage.

 

Sure, you might not be able to list a $20,000 hammer as a line item on your personal budget, but there are ways you can help cushion your budget to make sure you’re prepared for a personal financial crisis or ready to respond an invasion of unplanned expenses:

 

  • Pay yourself first. Part of every dollar you earn should go toward your financial future. Even if you don’t see an immediate need to save money, you can be positive the day will come that you wish you’d started saving earlier. Whether it be for a down payment, wedding, or car repairs… One day you’ll wake up and need it.

 

  • Underestimate your expenses. When building your budget, err on the side of caution. Estimate the amount of money that you spend on gasoline during the summertime when prices are high. Give yourself enough money to cover your utility bills during the hottest and coldest months of the year. Round your expenses up to the the nearest $5-10.

 

  • Include “discretionary income. ”While you might find it satisfying to have a detailed, perfectly adhered-to budget, it’s just not realistic for most people. When creating a budget, don’t feel the need to assign every single dollar you earn to a specific category. Instead, set aside 5-10% of your income as “discretionary income,” and be okay knowing that its purpose might change from month to month.

 

When it comes to your budget, yes, precision is important (if you’re spending all of your money on food, you’ll want need to know this).

 

However, if you are going to fudge the numbers, make sure you do so strategically and always in your favor. You never know when an alien expense or UFO (“unidentified financial opportunity?”) will come knocking at your door.

 

My own contribution 

 

When I launched the idea for this post, I reached out to a few blog network groups and asked if people wanted to contribute.  What surprised me was how many of them had not seen the movie. I understand not everyone is into science fiction, but it wasn’t about the genre, it was the age of the viewer.

 

One blogger told me they were five when the movie came out, and they would have to watch the movie on Netflix. I’m sure that somewhere in my basement I have the movie on VHS, and at one point I probably rented it at Blockbuster. I recall seeing Independence Day in the movie theater.

 

I had assumed that most of these bloggers were closer in age to me and that they had the same experiences. It’s an easy enough mistake to make but is a mistake nonetheless. Experiences matter; it is one thing to experience a phenomenon and live through it and then read about it. Movies like Independence Day or Jurassic Park were huge blockbusters and technological marvels in an era where cell phones were a novelty for the rich and AOL was the new hotness. Looking back, the movies may not seem as impressive in a high def., 4k-resolution world.

 

These young bloggers didn’t just miss out on pop culture, they missed out on the market hysteria. I remember in the 90s overhearing the sergeants in my army unit talking about how much money they were making in their mutual funds. The market was on fire, and everyone was cashing in. That is, of course, until early 2000’s when the market tanked.

 

I was just starting my career in financial services at the peak of the stock bubble. As the bubble burst, I remember the panic. I remember the tears. Potential clients who worked with other firms were calling us for help; they had lost money in stock mutual funds and owed money in capital gains taxes. (If that sounds like a typo, it proves my point about experience.) You personally can lose money in mutual funds, and the fund can still pay out a taxable capital gain.

 

Just like how most younger bloggers may not be able to relate to the hype around popular movies like Independence Day, they may not be able to relate to why older investors have an aversion to risk.  When you live through and experience two major market downturns, that experience has a lasting effect.  Sure, it all worked out in the end, but it didn’t feel like it was going to work out when it was going on.  It’s like that awful summer when the movie Titanic was a hit and every other song on the radio was the Céline Dion theme song. I just don’t want to live through it again.

 

All the same, we would not be able to celebrate all of these memories without our independence.
So, Happy Independence Day to you and your family on this fourth of July.

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