Kristin and I just watched the 90’s Disney flick Blank Check last night. It was as amazing as when I was a kid; if you haven’t watched it, you should. For those who need a quick recap, here’s the general synopsis:
Preston, a 10-year old living in a middle class family, feels like his two older brothers are stealing the spot-light from him. They are starting some sort of business and take over his room, all with his parents’ blessing because his dad is also an entrepreneur. He sees that money could buy his own space. He takes some birthday money (all eleven dollars of it, for his 11th birthday) to the bank, but they’ve got a $200 minimum – disheartened, he leaves with check in hand. In the parking lot, he’s nearly hit by a guy who we were introduced earlier in the movie who bestowed a lot of money onto the bank’s manager to launder. In a frenzy, the guy starts to write a check, signs it, then bolts when the cops come around because he’s a criminal on the run.
Back at his house, Preston ponders what to do with this check. He remembers the $200 needed to open the account, and so he plans on making the check for $200 to open one. Not happy with that number, writes in 10,000. Then he thinks…this guy just gave him a blank check. What’s the worst that could happen? So, he writes it for a million dollars, made out to cash, and off to the bank he goes.
Not knowing who to expect should be picking up the money bestowed to the bank manager, Mr Manager obliges with cashing the fraudulent check and off runs Preston with a cool mil in his backpack. He proceeds to buy a house and spend lavishly on games, a race track, and high tech (for the day) electronics. He’s living large under the guise of some mysterious Mr. Macintosh (aptly named from the brand of computer he used to write the check), but ultimately finds himself spending too much, without any real friends, and reality kicks in. Soon, he’s broke and everything is over. It was a wild ride, though, that’s for sure.
There’s more to it than that, but that’s the movie in a nut-shell. It got me thinking: yeah, this is a totally entertaining movie – completely off the wall and not plausible by any definition of the word – but there are some actual things one can glean from our boy Preston.
Preston, in an effort to conceal his fraudulently-obtained money, attempted to do everything himself. Obviously being 11 years old, he has no experience managing such a tremendous windfall of cash. I mean, he’s 11. But no matter what your age, a dramatic windfall can sometimes be difficult to handle. Even as a grown adult, suddenly receiving an influx of cash can be an awesome feeling, but if you’re not careful, it could end disappointingly, or worse.
If you happen to receive a windfall – an unexpected bonus at work, an inheritance, or something more common like a tax return – it’s better to sit on it than blow it on fun stuff right away. Even better, if it’s a sizable chunk of cash and you just aren’t sure, find somebody who can help you and advise you appropriately, like a Financial Planner or accountant. Investing and saving most of a windfall should be a priority if you want to use the money to help you retire earlier, for example. Using it to pay off debt is also not a bad bet, or just bolstering an emergency fund that may need some TLC.
Whatever it is, making sure you have some sort of plan is generally a good idea. It’s not a bad idea to think about what you’d do with an unexpected influx of cash now rather than have to sort through it if/when it happens.
And of course, nobody would blame you if you wanted to spend a little bit of it on fun stuff now. After all, what’s the point in having money if you can’t enjoy any of it right now? Kristin and I have agreed that 90% of whatever we’d get if we won the lottery, for example, would be saved and invested. But that 10% is guilt-free spending.
Money Doesn’t Fix Everything
Throughout the movie, you come to realize that despite having all the cool gadgets, Preston doesn’t really have anybody to share his new-found wealth with. He spends most of his time hanging out with a limo driver, Henry, that he hired, but nobody else. Money can be a great tool to reach your goals, but money alone doesn’t solve everything. I think that people often think about making more money and expect that just having more money would mean having fewer problems. That’s far from the truth, for many reasons. Without discipline and good budgeting habits, for example, it’s easy for things like lifestyle inflation to creep up, especially slowly over the years.
There are some easy ways to combat this, like automatically bumping up your 401(k) contributions if you get a raise at work, or setting up automatic transfers to a different, semi-remote savings account. Patterns like this set you up for a stronger future without sacrificing your current quality of life. Outside of raises, increasing your savings rate can often be an incremental process that becomes pretty easy to stomach if you do it slowly. Adding another 1% of your pay toward your 401(k) each year, for example (in addition to any raises) might seem like a squeeze, but it’s a slow enough process that you should be able to slightly adjust your spending habits and still feel okay.
Your friends when you’re poor will be your friends when you’re rich
One of the kind of depressing things about Blank Check is that Preston doesn’t really have many friends. After coming into some money and living the high life for a bit, he decides to throw himself (and “Mr. Macintosh”) a birthday party. The guest list is huge, and when he can’t pay the $100,000 bill to the event planner, everybody leaves – and the girl he was hopelessly in love with (who was in her early 30’s) wasn’t there either. Limo Driver Henry gives Preston a tough life lesson: The friends you have when you’re poor, will be the friends you have when you’re rich. Folks who come around only after you’ve made it may not be friends at all, and may be after your money instead.
Sure it’s a bit pessimistic, but it highlights one big thing for me. When you do have a lot of money – and people know it – it’s important to make genuine friendships, and not engage in frivolous relationships with people who seem non-genuine or only interested in reaping the benefits of friendship with somebody better off than they are. Surrounding yourself with like-minded individuals who build you up and encourage you will make you far more likely to succeed than surrounding yourself with toxic individuals looking for a handout.
That point applies to everybody though, not just people with money. Life’s too short to be filled with negativity from the people around you. You shouldn’t put up with those sorts of relationships, whether it’s with “friends”, a job, or anything else. There are alternatives, and it’s better to follow those than be miserable or exploited.
Ultimately how much money somebody has isn’t really anybody’s business other than that person’s. Living within your means and being non-flashy can be a great way to hide your success if you so choose. While obviously extremely well-known and maybe not the best example, Warren Buffett lives in a completely unremarkable house in Nebraska. Of course individuals will spend and save their money in different ways based on their values in life, and that’s the great thing about having the freedom to do what we choose with our money.
Where did you unexpectedly learn something about money? How has it impacted you?