Latest news with #financiallessons
Fast Company
2 days ago
- Entertainment
- Fast Company
Why ‘The Shawshank Redemption' is the best movie about investing ever made
The 1994 Frank Darabont film The Shawshank Redemption may be everyone's favorite movie to catch on TNT on a rainy Saturday, but it's not an obvious place to go looking for money lessons. This quiet film is a meditation on the power of hope to change lives—which hardly seems like a message one can expect from financial professionals (ahem). Yet, the story of Andy Dufresne's time in (and spectacular escape from) the Shawshank State Prison provides a blueprint for smart financial choices. And the story of how the film itself gained traction despite a lackluster initial reception can also teach us important money lessons. What we see: a rock hammer and weekly correspondence Following his wrongful conviction for murder, Andy Dufresne arrives at Shawshank to serve two consecutive life sentences. He befriends another lifer, Red, who runs an illicit smuggling business. Andy asks him to procure a rock hammer and a large Rita Hayworth poster. (The movie, of course, springs from the 1982 Stephen King novella, Rita Hayworth and Shawshank Redemption.) Andy claims that he wants the rock hammer for carving, and he does indeed create small sculptures with it. But that's not all he uses it for. By the end of the film, we learn that Andy has spent 19 years digging a tunnel through his wall with the hammer, using the poster to cover up his work. Despite the rock hammer being a tiny tool for work of that magnitude, Andy never gives up his slow, diligent, and methodical approach to escaping. Andy is equally methodical in his efforts to improve the decrepit prison library. He sends weekly requests to the Maine state legislature for funds to buy used books. After years of relentless effort, Andy secures a $500 annual appropriation for the prison library, granted by the state 'just to shut him up.' What we learn: be methodical with whatever tools you have Part of what makes Andy Dufresne extraordinary is his ability to take the long view. Most of his fellow inmates lose themselves in dreary thinking about their imprisonment, but Andy sees an investment opportunity. He recognizes time as a tool. He doesn't have freedom in Shawshank, but he can take advantage of time in a way people on the outside can't. By recognizing that time works differently on the inside, Andy is able to use the very punishment he's been given as a way to maintain his hope and persist with projects. Warning: This scene contains coarse language. What we see: confronting Hadley and becoming Randall Stephens A few years into his time at Shawshank, while working with a crew of inmates to tar the prison roofs, Andy overhears Captain Hadley, the brutal and vicious lead guard, complaining about having to pay taxes on a $35,000 inheritance. Andy recklessly approaches Hadley and him if he trusts his wife. Hadley responds to the impudent question by rushing Andy to the edge of the roof to toss him to his death, but Andy saves himself by saying he knows how Hadley can minimize taxes on the inheritance. Andy becomes the unofficial CPA for the prison staff, and as the years pass, Andy also starts helping the warden launder money using his skills with accounting. He also secretly creates a fictitious identity, a businessman named Randall Stephens. When he escapes Shawshank at the film's climax, he steals all of the warden's laundered money by posing as Stephens at the bank and withdrawing all of the ill-gotten gains. What we learn: know when and how to take risks Ignoring the advice of his inmate pals, Andy risks his life to gain leverage with Hadley. The only immediate reward is a case of cold beer for the rooftop work crew. But Andy is thinking longer-term, as he is from the very first moments of Shawshank Redemption. The risky gambit leads to work that better suits his knowledge and intelligence, providing new opportunities. His construction of Randall Stephens is equally risky. He knows that the money he is withdrawing is laundered, that Stephens doesn't exist, and that his absence from his cell has probably already been discovered. Though Andy never broke the law before he went to prison, he does so when inhabiting the Stephens persona he invented. But like the risk of confronting Hadley, pretending to be Stephens is calculated. Andy prepares everything he needs to pull off the ruse ahead of time, using his knowledge and intelligence to mitigate the risk. The lesson? Risk-taking makes sense when we're well-prepared and set up for success. What we see: a box-office bomb becomes universally beloved The Shawshank Redemption famously tanked at the box office, initially earning a measly $16 million against a $25 million budget. Though it was nominated for (and lost) seven academy awards and lauded by critics, the studio had no idea how to market a character study set in a mid-century prison and audiences were apparently confused by the film's (admittedly baffling) title. Then a funny thing happened on the way to certain obscurity: The Shawshank Redemption slowly found its audience. But unlike many other box-office failures that became cult classics, this film didn't just appeal to a niche audience. Over the past 30 years, it has become recognized as one of the best movies ever made and consistently tops IMDB's list of favorite films. Just as Andy diligently works at tunneling through his wall, building the prison library, stealing the warden's laundered money, and making himself indispensable to his best friend Red over a period of nearly two decades, the film showcasing Andy's story also took its time to garner the appreciation it deserves. What we learn: proof of concept can take time We tend to want instant results as a culture, especially when it comes to investing—and Hollywood is one of the worst offenders. If a film doesn't make major bank in its opening weekend, studios may be willing to write it off. Frank Darabont, Tim Robbins, Morgan Freeman, and the rest of the professionals who worked on The Shawshank Redemption believed in it and gave it their all. The lackluster initial reception must have been incredibly disappointing. But the film is much more than its first three months' revenue, as Shawshank 's enduring popularity has proved. Honestly, we need to increase our time horizon for all types of investments, not just Hollywood movies. When it comes to financial investments, quick returns are typically the province of scams (like the warden's money laundering) or luck (which you can't prepare for). Andy's example makes it clear that you should try to invest like the quiet, falsely convicted banker. He does his homework, invests in something he believes in, does as much preparation as possible, recognizes when to take a risk, and uses time to his advantage. For other types of investments, from your own pursuits to building a business, take a page from the success of The Shawshank Redemption. The right combination of diligence and patience remains the most predictable investment strategy. The extended deadline for Fast Company's Next Big Things in Tech Awards is this Friday, June 27, at 11:59 p.m. PT. Apply today.
Fast Company
16-05-2025
- Business
- Fast Company
What '80s pop culture taught me about investing
As a lifelong pop culture aficionado, I have a tendency to connect my favorite media to whatever I'm currently doing. When I purchased a secondhand easy chair a few weeks ago, my husband and I spent a sweaty 30 minutes struggling to get it up the stairs. With the chair still wedged at an impossible angle, we paused to catch our breath and I said, ' You're gonna need a bigger boat.' Similarly, anytime I use up the last of the milk or take the last cookie from a package, my brain always bellows ' FINISH HIM! ' But the pop culture in my head is more than just a running commentary on mundane moments. My favorite entertainment has also been an excellent teacher. In particular, the pop culture of my childhood taught me a number of financial lessons that I've never forgotten—including instruction on how to be an investor. Here are the timeless investing lessons I learned from 1980s pop culture. Lemonade Stand: the risk of playing it safe While the majority of my fellow late Gen Xers have deep and visceral memories of dying of dysentery on the Oregon Trail, my early childhood gaming trauma stemmed from the lesser-known Apple II game Lemonade Stand. This simple game teaches the basics of business planning by simulating a child's lemonade stand. The player receives a weather report for the day and has to decide what to spend on lemonade ingredients and advertising as well as determine the price for each glass of lemonade. As a frugal and business-minded 7-year-old, I invested heavily in lemons and sugar when the game predicted a hot summer day on my first turn. I also set a reasonable per-glass lemonade price, knowing that it was folly to overcharge my customers. Though it seemed unnecessary on such a beautiful, 8-bit sunny day, I also splurged on a single advertising poster. Once my preparations were complete, I leaned back in my chair, ready for profits to rain down on me. To my shock, I only had two customers all day. I didn't even make back the money I spent on cups. Pop culture lesson: know where to invest To little Emily, it made sense to spend money on ingredients, since you can't sell lemonade without them. But I balked at the expense of advertising, which seemed unnecessary compared to lemons and sugar. I couldn't predict or measure advertising's return on investment, so I assumed it was a waste of money. (Unfortunately, I continued to make this mistake into adulthood. When I first started freelancing, I only owned a desktop computer. Investing in a laptop seemed like an unnecessary expense with no potential upside for my fledgling writing career—except that I traveled at least once a month and had to move heaven and earth to either work ahead or find a computer at my destination every single time.) The shock of losing my Lemonade Stand money taught me that playing it safe can't protect you from loss. There is a risk to investing—whether you're investing in advertising, a new laptop, or in the stock market—but there's also a risk to playing it safe. You could lose your business because no one knows about it, lose your time (and your mind) because you don't have the equipment you need, or your uninvested money could lose buying power over time because of inflation. There is no such thing as a risk-free financial decision, and playing Lemonade Stand in second grade taught me that better than anything else. The Westing Game: invest independently Ellen Raskin may as well have written her 1978 Newbery Medal winning book The Westing Game specifically to appeal to me. The novel begins after Westing Paper Products tycoon Sam Westing is found dead. Westing's lawyer invites his 16 heirs—who all happen to be the only tenants of the newly constructed Sunset Towers—to the reading of the will. Once there, the heirs are paired off and given $10,000 and an envelope of mysterious clues written on paper towel scraps. They are invited to figure out who has taken Sam Westing's life, and the winner will receive his $200 million estate. As much as that set up is more than enough to get my attention, it was the character of Turtle Wexler that really established this book as one of the pop culture giants of my childhood. This 13-year-old budding entrepreneur and investing genius captured my heart by being smart, funny, and financially confident beyond her years. Turtle and her partner, a 60-year-old dressmaker named Flora Baumbach, receive the incomprehensible clues SEA, MOUNTAIN, AM, and O, which the teen girl believes to be stock symbols. Since Westing was known to be a business wizard, Turtle thinks the stocks indicated by the clues must be clear winners. The pair invests the $10,000 in the clue stocks and in Westing Paper Products (stock symbol WPP). The clue stocks don't perform as well as Turtle had hoped. Her daily perusal of The Wall Street Journal indicates that the Westing Paper Products stock is likely to go up, so she dumps the clue stocks and puts all their money in WPP. By the end of the game several weeks later, Turtle and Flora's $10,000 stake has grown to $11,587.50. Pop culture lesson: lean into your knowledge Turtle taught me the importance of investing based on my own knowledge, expertise, and instincts, rather than following someone else's lead. She starts her investing journey with the knowledge that Westing was a remarkably astute investor. She assumes the clue stocks must have been handpicked by Westing. But when the clue stocks don't do well, she pulls her money from them and invests in something she has direct understanding of, rather than doubling down on her assumption that Westing must have known better. She changes her investing tactics once she has new information. Turtle also shrugs off Flora repeatedly asking if she is sure about her investing choices. She doesn't let the concerns of her 60-year-old partner sway her, because she knows Flora doesn't understand the stock market as well as she does, even though she is much older. All together, Turtle's example made it clear to me that successful investing requires knowledge and a willingness to trust yourself. It's helped me avoid following the crowd into decisions that don't fit my investing strategies. Trading Places: anatomy of an investing scheme I loved the 1983 film Trading Places for Eddie Murphy's brilliant comedic timing, but I was even more fascinated by the movie's portrayal of revenge via short sale. It took me several rewatches to fully understand how the investing scheme resulted in financial doom for the film's villains, the Duke brothers. To exact their retribution, Murphy's character Valentine and Dan Aykroyd's Winthorpe show up to the New York Commodities Exchange ready to trade. Their goal: sell as many orange juice concentrate futures as they can before the U.S. Department of Agriculture report on the nation's orange crop. Meanwhile, the Dukes are buying as many OJ concentrate futures as they can before the report, essentially trying to corner the market. Between the heroes feverishly selling and the Dukes feverishly buying, OJ future prices skyrocket until the moment trading pauses for the crop report—which reveals the orange harvest will be strong. In the aftermath of the announcement, the Dukes are stuck with all the futures they purchased at inflated prices. To fulfill the margin call, they must pay $394 million. At the same time, Valentine and Winthorpe busily purchase futures from everyone but the Dukes at a greatly reduced price. This allows them to fulfill the orders they sold before the report dropped—and make a ridonculous profit. This scene fascinated me as a kid, but it also confused me. I knew that successful investing was about buying low and selling high. But I couldn't understand how the characters could sell high then buy low. How could you sell something before you bought it? Pop culture lesson: stock sales aren't always linear After many years of catching the movie on TBS reruns, I finally grasped that stock and commodities sales don't have to follow a linear progression of cause then effect. It's possible to buy low after selling high, provided you plan your investment strategy carefully. That's because you don't have to own something you sell. You can borrow a stock (or an OJ future, for that matter) for a fee. As long as you return it or an identical asset before the margin call, you can sell the borrowed asset even though you don't own it. This is what Valentine and Winthorpe did to ruin the Dukes. They took their pooled money to pay the borrow fees of the futures, sold those futures at inflated prices before the crop report, then bought back the futures at the rock-bottom price afterwards so they could return the borrowed assets. While short sales like the one in Trading Places are unlikely to ever be part of my own investment strategy, understanding the fluid nature of ownership in stock and commodities trading has made me a better investor. It broke me out of the rigid cause-and-effect thinking that limited my investing creativity. Learning through story Despite being a lifelong money nerd, stories are my first love. So it's no wonder the most enduring lessons I learned about finance come from the pop culture I loved as a child. Playing Lemonade Stand in my elementary school computer lab disrupted the story I'd told myself that it was possible to make a profit without risking an investment. Reading The Westing Game gave me the story of a confident financial heroine to remember when I'm tempted to follow the crowd. And Trading Places folded a satisfying revenge story into a creative investing scheme, which helped me feel smart and savvy when I finally wrapped my head around the details.
