Films are a true reflection of the society. They tell us the condition, opinions and actions of people living all around us. When stories, human stories, are told by filmmakers, it compels viewers to take a hard look at themselves and guide their flow of actions. This article talks about one such important movie.
The Wolf of Wall Street is a biographical movie, inspired by a true story, based on the life of John Belfort. The screenplay was adapted from a book which goes by the name Jordon Belfort. The story is about the man, who enters Wall Street as a passionate and inspired stockbroker, and climbs his way up the ladder, eventually becoming a tycoon with his company Stratton Oakmond.
In the role of the protagonist, the movie stars the Titanic heartthrob Leonardo DiCaprio as Jordon Belfort.
It is important to analyse this movie from a financial lens, and see the lessons it teaches us about finance, market sentiment and money in general.
So, here are 8 financial lessons from The Wolf of Wallstreet:
This is an extremely vital lesson to be learnt, when it comes to investing. In the movie, Jordon Belfort tells all his salesmen, that to sell stocks they must quit being sentimental or empathetic towards the buyer. He says, we must look at sales as a purely transactional relationship, and not care if the buyer profit from it or not.
Similarly, when you save your money in a savings account, shares or other deposits, you shouldn’t get emotional about those finances. You should look at your money from a purely objective stance, and analyse which source will make you the most profit, or give you the higher return and invest accordingly.
This statement shows pure ambition. Jordon Belfort tells his colleagues not stop working and earning till their bank account balance looks like a phone number. He seeks to instil his sense of desire among his colleagues.
This directly correlates with the financial practice of investing your money. We should be as ambitious as Jordon, in our bid to multiply our money. There is no magic number when you should stop. Even if you are financially strong enough to fund your retirement, money should always multiply. This gives you a financial cushion to take risks, as well as creates opportunities for people around you by the trickle-down effect.
Here, Jordon Belfort tell us about his recruitment policy. He says he wants inexperienced people, who show a strong desire to learn and growand believes he can make them rich in no time.
Money and investments also work in a similar way. You need to spend enough time doing market research, see which opportunities are new, identify their lucrativeness, and invest wisely. More often than not, it’s not about investing in reliable sources, because they can’t give you exponential returns. And newer and promising investment has a higher chance of multiplying your money many times over.
Through this dialogue, Jordon Belfort shows his employees the value in sticking with a job even in tough times. He says that the 3% people who stay with a firm through thick and thin are the ones who often reach higher management positions, as compared to people who frequently shift.
This principle works really well with money. This shows us the importance of locking in our money, and reaping the benefits of the maturity period of an investment. When you lock your money in a Fixed Deposit or stocks of a company for a long time due to the power of compounding, it is more likely to grow, than if you take it out and keep investing it in multiple sources for short periods of time.
In this powerful speech, Jordon tells his employees that hard work is always more important than talent. You can be blessed with talent, but if you don’t cultivate it by working hard, it is of no use. He says talent only gives you a head start, but if you truly want to succeed, you need to work hard.
Similarly, when you make an investment portfolio, you need to diversify your investments. If you inherit or earn a lot of money, but fail to invest it into the correct channels, you are likely to exhaust it. Hence, you must always aim to expand your investment portfolio, in hopes of greater returns.
This is a very pivotal lesson from The Wolf of Wall Street. Jordon has huge successes and he also has great failures, but that never stops him or his employees from working hard and always growing.
Similarly, when you invest your money, you are sure to make both profits and losses. It is important to stay calm and not lose your head when you’re investing. If you make profits, you shouldn’t get too optimistic. Similarly, if you make losses, it is important to not get too pessimistic. The key is in consistency, when it comes to investing.
In his impressive monologue, Belfort says that money is all noble, and that there is no point in romanticizing poverty in way. He promotes a life where you live your life in luxury.
You should always
identify and know what your motivations are. Unless you know where you want to
spend your money, it wouldn’t give you a whole lot of motivation to invest it
and earn it.
This may be a bit harsh, but this is the extent to which Jordon Belfort idolizes money in The Wolf of Wallstreet. He says money is everything in life, and we understand that things for him are always extreme and they never take a middle road.
While, it is important to know when to hit high, and when to take the middle road. Therefore, while investing your money, it is important to develop the right sensibilities and know what will work when.
In conclusion, it is safe to say that The Wolf of Wall Street taught a whole generation about money and its importance. While the movie is surely extreme in its messaging, it is important to learn what the makers want us to learn, as seen from the final seen, when Jordon becomes a public speaker and advices people on how to use invest and use money legally and judiciously.
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