8 practical money lessons we can learn from ‘Get Smart with Money’ documentary to build wealth

Warning: This article contains spoilers (lots of it) of ‘Get Smart with Money’ documentary that is available on Netflix. I strongly recommend readers to watch the documentary first before reading this article.

I got to know about the ‘Get Smart with Money’ documentary when I saw Pete Adeney, also known as Mr Money Mustache in the FIRE space, post about his involvement with the documentary in his Facebook group.

Having watched the documentary, the financial advice aren’t that different from what’s pretty much common personal finance knowledge in the FIRE space – cut your spending, invest consistently, try building side hustles, and focus on what’s most important in life. But since this documentary is on Netflix and reaches a wider demographic of viewers, I’m sure some of the viewers can learn a thing or two from watching it.

What this documentary is about

The film follows 4 individuals from different backgrounds who are each assigned to a financial coach (Paula Pant, Tiffany Aliche, Ross Mac, and Pete Adeney) who spend a year with them to help them get on track towards their financial and retirement goals. 

The producers had the four financial coaches send “casting calls” on the Internet through their own socials to invite their fans to send video submissions of their personal stories and financial challenges. Four individuals will be selected for a year of free financial coaching, in exchange for being filmed for the documentary.

After the selection process, the financial coaches have selected their ‘ideal student’ for the documentary.

Here are the selected individuals:

• Lindsey who started her journey working two jobs totaling 50 hours a week as a waitress and bartender.
• Teez is a NFL professional player who was drafted for the Detroit Lions in 2017 with a $1.6 million sign-on bonus which he found himself quickly spending the money away in a short period of time
• Kim and John are a family of four living on a single income after John got retrenched and became a stay-at-home dad, tending to two young kids. Kim runs a growing business as a life coach, earning $300,000 a year.
• Ariana is a regular American who is deep in debt from both her education and spending habits and is living from paycheck to paycheck.

After watching the documentary, I’ve identified practical money lessons that we can learn from the documentary to manage our personal finances and build wealth.

Learn from a financial coach/mentor that matches your circumstances and goals

As I have mentioned earlier, the four financial coaches selected their students through their own casting calls. I imagine they would have made the selection based on whether they have the right knowledge and tools to create a positive change for the student.

Like-wise, because the casting calls were made by the financial coaches through their own circle of fans, the submissions are likely to come from people who have similar mindset and financial goals as these coaches.

Today, there are so many financial coaches and influencers out there talking about personal finance and other financial topics. For someone who is new to personal finance, it is important to recognise that not every ‘not financial advice’ advice is relevant or suitable for them.

We should curate our own list of financial coaches/mentors and influencers who have similarities to our personal circumstances and goals, think critically about the advice from them and adapt those advice to suit our needs. For advice from those who are not part of our curated list, not only should we be critical about what they say, but also research externally to verify what they say is true, or bullshit.

A personal finance journey always starts with budgeting

Not surprisingly (to me at least), all four students in the documentary started the show with an analysis of their current budgets to understand how much they are earning and spending every month, account for the assets and liabilities that are under their name.

It builds context for both the viewers and the students. Only after you know where your starting point is, can you determine how far you are from your finishing line, as well as the steps you need to take to reach there.

Ariana’s starting point is a negative net worth with $45,000 in credit card debt and over $100,000 in student loans. Yes, education in the US is terribly expensive compared to Singapore. Working with Tiffany, they work out a plan by ranking Ariana’s debts in order of the interest rate charged and set out to tackle each debt, one at a time starting with the one with the highest interest rate.

Towards the end of the show, we see Ariana happily announcing that she has cleared off all the debts with more than 10% interest rate and is working towards those under 10% interest rate.

Understand why you’re doing this

The finish line for all four students are very different, just like how each of our finishing line would be different from others.

Teez wants to create a better life for his daughter when she grows up. For Kim and John, their goal is to attain FIRE (Financially Independent, Retire Early) status and spend more time with their kids. Linsey wants to earn more money doing meaningful work and have enough income to be able to afford basic healthcare and access to the therapy/medication that she needs. Ariana simply wants to be debt-free and be able to give more to her kids.

With a clear vision of their goals and what their finishing line look like, their financial coaches were able to work with their students to steer them in the right direction to bring them closer towards their finishing line through meaningful actions.

The beauty of this film is that I think different finishing lines should resonate with a diverse group of viewers.

Your money will never do better than what your mindset allows

Even if you have a lot of money, it does not necessarily mean that you know how to manage it well. In the film, we see that Teez received a life-changing sum of $1.6 million as sign-on bonus for the Detroit Lions in 2017, only to spend a large portion away without proper financial planning.

With a limited mindset about money, Teez believes that the best option is to keep chasing for the next pay check to keep the money flowing. However, the career length of a NFL player is very short and Ross convinced Teez that he should be making his money work harder for him by investing in the stock market.

Ross explained to Teez how the stock market works and why he should invest in a S&P 500 ETF as a start. I must say that I was surprised that apart from making small monthly investments in a S&P 500 ETF, Teez ended up talking about buying Apple shares in the film.

I believe that the film was cut down to 1/100 of the actual financial coaching and I hope that Ross has spent a lot more time educating Teez on portfolio allocation as well as risk and volatility. 

Changing your mindset about money will take a significant amount of time and effort but once you manage to make the switch, it can make an impact to your life.

Automate your personal finance habits

“Automation is the new Discipline.” That’s what Tiffany said to Ariana in the film.

I am a big believer in this statement and that we can build easier personal finance habits with the use of rule-based automation.

In the film, we see Ross getting Teez to start investing monthly by setting up a recurring investment on his brokerage account. Though Teez started the recurring investment with only $1000 each month, I’m sure he will increase the amount once he gets more confident and comfortable with investing.

Through Tiffany’s guidance, Ariana started splitting her paycheck into 5 separate accounts automatically each month to set aside money for different spending and saving needs to better manage her money. This helped Ariana pay off $40,000 of debt in a year.

Reduce your expenses without drastic lifestyle sacrifices

For people who are just starting their financial journey, it’s highly likely that they will be able to find ways to reduce their expenses without making drastic lifestyle sacrifices.

For Kim and John, they were spending $13,000 on groceries each month and that was one expense item that Pete think they can trim off easily, simply by switching where they buy their groceries from to a cheaper option like Costco. By following his advice, Kim and John were able to reduce their monthly expenses by $3,000.

Personally, I think that they could trim their expenses more aggressively if they are fully onboard with the FIRE movement but it really boils down to the individual.

Increase your income

After optimising our personal finances, we will eventually find that there’s a limit to how much we can reduce our expenses. The next step is to focus on increasing our income while avoiding lifestyle creep.

Some of the income generation concepts shared in the film resonated deeply with me as they were concepts that I’ve learnt and practiced.

When Paula asked Lindsey what she has done in the past and what she would like to do in the future, Lindsey shared that she likes to sketch and love dogs. She has walked dogs and pet sitting before in the past and would like to continue doing so. Paula proposed the idea that Lindsey could generate new pet owner leads by going to the park and sketch the dogs in the park. She could approach the dog owners with her sketches and gift them to the dog owners with a follow-up pitch that she provides dog sitting and dog walking services.

That is what Dilbert creator, Scott Adams calls talent stacking. You essentially combine a few seemingly basic skills to differentiate yourself from your competition. In Lindsey’s case, it’s more likely that the dog owners will bring her sketch of their dogs (with her contact details) home, compared to a random pamplet promoting dog walking/sitting services.

Today, Lindsey would receive a few dog walking/sitting requests every now and then because of the sketches she has gifted to the dog owners in the past.

Lindsey also shared with Paula that she started selling printed art pieces at flea markets. Paula refers to this business as a scalable business because when customers buy her prints, Lindsey can simply get them reprinted to replenish her stock. Paula also recommended more sustainable options that Lindsey could consider to grow her business, such as selling her art prints online, and even consider converting her art pieces into NFTs (non fungible tokens) to sell in the crypto space.

Learning by teaching others

The final lesson that I would like to share in this article is being able to share and teach what you have learnt about personal finance management and wealth building with others.

By sharing and teaching what you have learnt with others, you accomplish two things.

Firstly, more people will be able to learn about personal finance management and wealth building to improve their financial well-being.

Secondly, you will reinforce your learnings when you are able to teach and impart these learnings to others. It will help you to recall, verbalise and organise your thoughts around the topic.

In the film, we see Teez talking to a group of teenagers in school about the importance of looking beyond materialism such as the newest kicks and instead to focus on saving money and building long term wealth. I don’t know how much those teenagers would be able to understand from a single conversation like this and I hope this can develop into a long term education on financial literacyl

Would I recommend watching the documentary?

For those who have not started managing their money and are new to the concept of personal finance, the answer is a resounding yes. I am pretty sure that personal finance newbies will be able to take away something from the film that could improve the way they manage their money.

But if you are someone like me who have already spent significant time learning about the topic and putting those learnings into practice, you probably wouldn’t learn anything new from the film. The documentary may reinforce some of the personal finance actions that you have done.

All in all, I think the documentary is well-produced and I look forward to seeing more documentaries like this in future.