‘Get Smart with Money’ is a Netflix documentary released in 2022. The topic of this documentary is ‘Personal Finance’. I found this to be really interesting. In fact, I was happy to see that the idea of FIRE (Financial Independence, Retire Early) was highlighted. I would recommend watching it contains some useful information about personal finance. Here is my take on some of the ideas presented in the documentary.
Warning: Spoilers Ahead
Structure of the Documentary
The documentary follows the lives of four people from various walks of life.
There is Lindsey, the 28 year old waitress with no savings. Teez, an African-American footballer in his twenties. Ariana, a struggling mother. John and Kim, a couple where the man is a stay-at-home dad and the wife is a high earner.
These four people are matched with so-called ‘Personal Financial Experts’ to coach them for a year to improve their financial lives. I have used quotes to call them experts as each of the coaches are unique. They are not licensed financial advisors or planners but just popular, influencer type people with their own unique approach towards personal finance.
There is Pant, of the Afford Anything blog and podcasts. Ro$$ Mac, of the Black wealth matters and Maconomic$ movement. Tiffany Aliche, author of Get good with money. And,Peter aka, Mr.Money Mustache one of the prominent figures in the FIRE movement.
The Matching
Lindsey, the artist, is paired with Pant. Teez the African-American footballer is paired with Ro$$. Ariana, the struggling mother is paired with Tiffany and John&Kim are paired with Peter.
Lindsey the 28 year old waitress
Lindsey is working two jobs in the services industry as a waitress. However, her passion is to be an artist and wants her art to be her source of income.
Lindsey is barely able to make ends meet even with her two jobs. In addition to this she has mental health issues and her work does not provide her with insurance.
Pant, her advisor starts off by asking her to focus on the big three categories of expenses – Rent, Transport and Food.
In addition to that Pant suggests her to do more of side hustles.
Excited by these suggestions, Lindsey quits one of her jobs to focus on side-hustles. These side-hustles include dog-sitting, selling art and designing clothes.
At the end of a year, she does make some progress but nothing spectacular. The only silver lining is that she is now eligible for health-insurance through her partner’s workplace benefits.
Teez – the African-American football player
Teez has a big pay-day early in his career. About 1.6Million$s. He ends up spending most of it on vanities. He is now left with 280k $s and a couple of houses. To makes matters worse, he is now injured and is not part of any football teams.
Ro$$ the advisor matched with him asks him to focus on two things. Making his money, the remaining 280k $s work for him. And, focus on getting back into the game.
Teez gets motivated by the projections Ro$$ makes showing him that without any additional source of income his remaining 280k $ will run out in 2 years.
Teez has a sort of a happy ending as he manages to find a place in the football team which means he is going to earn about 25k$/week and he is now investing into index funds
Ariana the struggling mother
Ariana has had a bad start in her life with a massive 100k $ + student debt. She is probably into her mid to late 30s and has kids. Her biggest problem is her inability to control impulsive purchases. These purchases have led her to accumulate over 45k $ in credit card debt.
Tiffany her matched expert advises her to categorize and prioritize her spend. Also advises her to split her income into various buckets i.e. budgeting.
Ariana has a major set-back with her car breaking down but now, due to budgeting she can dig into her emergency funds and can pay for it. She is also able to make good progress in paying off her credit-card bills.
John and Kim
Peter aka Mr Money Mustache is astonished by John and Kim’s grocery bills which are at about 1200$/month for a family of 4. He takes John to Costco and is able to immediately cut the spend by 500$s.
Over several coaching sessions, John and Kim decide to downsize and also invest the surplus into the stock market through index funds.
They are influenced by Peter to pursue FIRE (learn more about FIRE here) . They are one of the more successful participants of this show with over 600k invested by the end of the year and are rapidly approaching their FIRE number(through the 4% Rule).
Were the Financial Advisors able to make any difference?
I think they were able to make a difference at two levels. The mental or emotional level and at the Financial level.
It may seem like Teez or John&Kim with their big $s were the winners out of the four. But, I think the impact of change is relative. For Ariana, just paying off her 45k $s of credit card debt made a huge difference. The number is even lower, at a few thousand dollars for Lindsey, but feels like she changed the entire course of her life.
It is all about mindset
I think the advisors were able to change the mindset of the participants and in my opinion, the bigger and longer lasting impact. Things like budgeting, expense management, investing etc, are all tools. These tools will be useless if one is not motivated and disciplined enough to utilize these tools in a productive way.
I think this is best illustrated in the example of John&Kim. Kim is a psychologist. Who is a big earner and has several clients. She is out and about in the world advising other people on how to improve their mental health. But, at home she herself suffers from impulsive purchases driven by her guilt of not being there for her children. Peter, the matched advisor is able to positively change her perspective on this in spite of not being a qualified mental health professional.
Matching made a huge difference
I think the Netflix Documentary team was thoughtful in their choice to pair the right kind of advisors with their clients. For example, Ro$$, was able to really get to Teez because of shared race and ethnicity. I think it is a very important aspect of personal finance. Which often gets overlooked.
Personal Finance is, ‘Personal’ after all. This means, a personal connection is essential to communicate the importance of making changes to lifestyle choices which is a very hard thing to do.
HappypathFIRE!