9 Financial Lessons From The Matrix
Only a few modern-day movies have managed to capture everyone’s imagination, like “The Matrix” series of films.
The Matrix movies have many lessons to teach us, from the nature of reality to fake news and much more. The Matrix also teaches us several financial lessons. Let us take a look at the nine economic introspections.
Touches on Emergency Funds
By now, everyone’s heard how important it is to keep an emergency fund, yet a large chunk of us don’t have it. Life can throw all sorts of problems your way when you least expect it, which feels worst if you don’t have a fund ready to deal with it.
One of many lessons on full display in the movie deals with having an emergency plan. As the protagonists went in and out of the Matrix, they had an escape route because they knew the Matrix was full of dangerous agents. If they were ever compromised, they had a way to leave.
Someone from their group of revolutionists would guide them through the Matrix to safety. That is what this emergency fund is, except that financial catastrophes in the real world hunt you. Maybe they haven’t personified dangers, like the agents in the movie, but these dangers are still accurate.
Without an emergency plan, you could be in hot water. You could suffer from financial ruin. You could deal with more mishaps than you can handle because you didn’t plan for the worst. It doesn’t mean you’re a pessimist but rather a realist.
You can use bank bonuses to juice up returns on your emergency fund or save your emergency fund in I-Bonds.
The other lesson embedded in the film has to do with understanding value. One of the villains in the story escaped the Matrix, but he hated reality. This person knew the Matrix wasn’t real, yet he wanted to return.
What’s more, he wanted to be rich and spend frivolously. The villain was willing to risk his life and betray his friends to obtain this type of happiness. The villain knew that his joy was based on a lie but didn’t care.
The world does this to you, too, in a way. How many times have you gone on a shopping spree to make yourself feel better? This country, society, and others have convinced you that mindlessly spending is a good idea.
You know that most of the stuff you buy isn’t as important as society led you to believe. It is why your closet is full of things you don’t use or why you have many garage sales.
They’ve convinced you to break your back working to buy things you don’t need. Instead, what would make you happy is spending time with your loved ones.
If you keep spending and continue working to pay your bills, you can never retire. Once you become mindful of your spending, you can plan to retire early at any age.
Use various free retirement calculators to decide when can you retire early.
Tracking Your Worth
Another financial lesson tucked away in these movies is understanding your worth. Part of the reason the criminal agents in this movie were able to control the main protagonist, Neo, was because they filled him with doubt.
No matter how often Neo saw signs that he was worth more, he had difficulty seeing it. The film would have been a lot shorter if he had taken a look at himself and believed his worth. You can say that same thing about your finances.
Folks who start tracking net worth understand their finances better and won’t get duped into bad financial decisions. Some people end up in deep debt because they don’t value themselves.
People need credit cards because they aren’t in control of their net worth.
Lenders lend money, and people spend a good chunk of their lives working off those loans.
Make sure you track your net worth using free tools like Personal Capital, which help you create a budget based on your current spending or analyze your cash flow.
Cut Those Expenses
Some billionaires depend on the financial system that requires most of the population to spend needlessly. Most people get suckered into spending, even though they shouldn’t.
This world has effectively convinced people that money buys happiness. It’s nice to think you haven’t been spending, but you probably have one way or another.
Someone buys a toy for a kid to make the child smile. Toys are nice to have, but kids don’t need toys to smile. Just pick that child up and play with them sometimes. You’ll get that smile you want to see.
The protagonists in the film take the pill and can wake up to see that the Matrix has shackled them. They had tubes connected to their bodies, much like these expenses we think are essential.
Cutting expenses you don’t need is like ripping those chords from your body. It helps you see that you can spend less. You don’t have to devour your life begging lenders for money searching for false happiness.
The characters in the movie unshackled themselves and stopped spending their valuable lives living in some dream while their lives were being sucked from their bodies by the machines, much like how credit card and mortgage companies do.
Companies also sign you up for various subscription services, so your spending is automatic. Use services like Trim which checks your subscription services and automatically unsubscribes you.
The film also highlights the importance of monitoring credit reports. One major issue everyone deals with is the fear of being an identity theft victim.
This particular problem wasn’t a huge plot point in the film, but the protagonist himself used an online alias to hide his identity.
On top of that, the protagonist was also a skilled hacker. Many financial transactions are now online, so identity theft and cybercriminals have become a bigger problem.
The only tool you have at your disposal is your ability to monitor your credit and identity. Watching your credit reports is something you can do yourself. FTC provides several resources to monitor your credit reports.
If you notice something funny, you can call the credit monitoring companies and tell them what you think is happening. Protecting yourself and your finances online is just intelligent. There are many people out there who are willing to destroy you financially.
Free tools like Credit Karma permit you to monitor your credit reports and send automated alerts if they notice suspicious activity.
Financial freedom is an essential lesson in the film. It’s the reason the protagonist takes the pill. He wants to be free of illusion and the shackles placed on him by the Matrix.
Financial shackles are real too, and you have to find a way to break them.
The good thing is that you can, and there are several ways to do it, from spending mindfully to decreasing your dependence on credit. Based on your risk tolerance and liquidity needs, you can find several best assets to invest.
What we haven’t covered yet are stocks. While they may be confusing, you can invest in stocks and let your money work for you if you give yourself time to learn. It’ll take some time, but you could attain financial freedom by investing in stocks or real estate.
Besides yourself, you can also create generational wealth freeing your family from the shackles that society might place on them.
Investing In Real Estate
The way you invest is up to you. As just mentioned, you could focus on stocks, but you can choose something a bit more concrete, like real estate.
The movie covered the value of the real estate as well. The protagonists who escaped the Matrix valued their ship. They had everything they needed to feel safe, comfortable and could complete their work.
The ship was their home. Everyone needs shelter, which is why we think real estate investing is such a smart move.
It allows you to gain financial freedom while sheltering folks through various means. There are several ways to invest in real estate for little or no money.
Flipping houses or wholesale real estate investing can be an excellent way to get started if you are ready to put some sweat equity.
You can buy a property and rent it out. Make sure you know how to evaluate a rental property.
If you prefer a more hands-off approach to real estate investing, you can invest in REITs or real estate crowdfunding. Another passive strategy is real estate note investing.
You get to be part of the solution providing shelter or even food via farmland investing, and that’s a good feeling.
You can upset the established order as Neo did by investing in cryptocurrency and moonshots, and non-traditional assets like art.
We’ll talk about the other two a little later. Right now, we’ll concentrate on cryptocurrency. Every country has its currency, and the government controls it. It means they get to choose when to raise the value of your dollar and when to lower it. Governments can also confiscate your fiat money.
That’s a lot of power in the hands of a few. Sometimes, their financial decisions, such as MMT causing inflation, affect you in ways they shouldn’t.
Countries play with value to keep people and nations under control. You can easily see how a movie like this fights against that power.
One of the most exciting ways to fight that control is through cryptocurrency. There’s no centralized power. The people power the money and its value.
Bitcoin is the original cryptocurrency designed to resist seizure by the government.
Moonshot stocks and other non-traditional investments can also help you break away from your financial shackles, but you get to do it in style.
The main character escaped from the Matrix traditionally, but the Matrix’s sense of reality still shackled him. It wasn’t until he believed in his non-traditional power that he could go above and beyond.
You might do well in real estate or stocks, but you might do even better if you go the non-traditional route.
Maybe you’re good at noticing trends, which should make it easy for you to invest in moonshot companies. Perhaps you’re good at seeing value in things that others don’t think are valuable, like antiques or classic cars—or even investing in the art using a platform like Masterworks.
This way, you can reach financial freedom and break free from the Matrix, just like Neo did.
Final Thoughts On Financial Lessons From The Matrix
You can find several financial lessons tucked away in The Matrix movies. You’ll find so much to talk about and much to apply to your life in this film series. Did you notice any financial lessons in the film that you want to add to the list?
John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
Here are his recommended tools
M1 Finance: John compared M1 Finance against Vanguard, Schwab, Fidelity, Wealthfront and Betterment to find the perfect investment platform. He uses it due to zero fees, very low minimums, automated investment with automatic rebalancing. The pre-built asset allocations and fractional shares helps one get started right away.
Personal Capital: This is a free tool John uses to track his net worth on a regular basis and as a retirement planner. It also alerts him wrt hidden fees and has a budget tracker included.
Credit Karma partners with Equifax and TransUnion and offers free credit reports and free credit scores updated weekly. It also provides alerts when it detects unusual activity on your credit files. Monitoring your credit report for errors can save you thousands.
Streitwise is available for accredited and non-accredited investors. They have one of the lowest fees and high “skin in the game,” with over $5M of capital invested by founders in the deals. It is also open to foreign/non-USA investor. Minimum investment is $5,000.
Platforms like Yieldstreet provide investment options in art, structured notes, supply chain financing, etc. They also have fixed-income portfolios spread across multiple asset classes with a single investment with low minimums of $2,500.