“Get Smart with Money” is a new documentary on Netflix that focuses on personal finance. It features 3 individuals and a couple with different financial backgrounds trying to reach their goals with the help of financial coaches.
Spoilers ahead.
Their Goals
Early Retirement
Couple John and Kim who are trying to reach Early Retirement. John is a stay at home Dad, while Kim runs her own business. She is currently making $150k, projecting to make $300k in the following year or depending how hard she hustle. They have a monthly expense $13k.
They are being coached by Mr Money Moustache (Mr MM). Mr MM retired at the age of 30. He managed to do so by being frugal and investing the rest of his money in index funds.
Key Takeaways:
- If you are a high income earner, you just need to focus on cutting down your spending and investing the surplus to reach FIRE earlier.
Start Investing
Next up, you have a NFL player. He landed his first paycheck of $1.6m at age 21. He purchased a couple of houses, some jewelries, went on some vacations, and that $1.6m became $280k in no time. He was released from the team, and was earning no income for a while due to an injury.
His coach is Ross Mac, a financial educator. He gave up his six-figure wall street job to give back and educate his community.
Key Takeaways:
- Anyone new to investing can get started right away by investing in an index fund. This means that you will be investing into a basket of stocks instead of having to pick individual stocks to invest.
- Your money will eventually go to $0 if you don’t know how to manage your money, no matter how big the pay check.
Pay Off Debt
Arianna is an emotional spender. Basically she spends money that she don’t have, and racked up $65k of credit card debts.
Her coach is Tiffany Aliche. She’s quite an inspiring coach. So she herself racked up $300k of debt in her early years, and manages to pull herself out of the debt. I love her quote, “Money is just a tool, you can use money to build yourself up financially, but money can also be used to destroy yourself financially.”
Key Takeaways:
- Split/automate your paycheck into categories before you even get to see it. In her case, its House Bills, Arianna Bills, Spending Account, Emergency Savings, Dream savings
- Spend only on things that you need and love (I personally resonate with this a lot. I wrote a post which goes into detail about Conscious Spending)
- Spend from a debit card
- Pay off high interest debts first
Earn More
Lastly, we have Lindsey, the artist who is working two service jobs and living paycheck to paycheck. No savings, and hasn’t been able to fully pay her bills in the last 14 months. She is putting in the hours, but there is only so much she do.
Her coach is Paula Pant, founder of affordanything.com. She’s a newspaper reporter turned Entrepreneur.
Personally, I like this candidate the best. So much potential in her artistic hustle.
Key Takeaways:
- There is only so much you can frugal down and there is no limit to how much income you can make (Detailed post on Increase income vs reduce expenses)
- Build side hustles to replace income, in her case, she had to quit one of her dead end job, so she has time to focus on her side hustles
- Learn to multiply income without multiplying the effort
Summary
If you are starting out with personal finance, definitely check out this documentary. I liked that it showcased candidates with vastly different financial backgrounds. You can probably identify with one out of the four.
I blogged a lot about investing in index funds, stocks and crypto. But that doesn’t mean it is for everyone.
Everyone’s financial situation is different.
If you have a lot of debt, then paying high interest debt is your priority, not investing.
If you are a high earner with high expenses, then reducing your expenses is the way to go.
But if you are earning barely enough to cover the essential cost of living, then you should be thinking on how to increase your income, not reduce your expense. Because there is only so much you can cut back on.
Always remember that different people have different financial situations and goals. And different situation calls for different approaches to solving the problem or reaching the goal.