Eight golden lessons from the silver screen

Learning about money can feel a lot like swallowing harsh medicine: It’s supposed to be good for you, but the taste is dreadful. Want the same lessons with a spoonful of sugar?

Pull up a chair and make some popcorn. Movies, it turns out, can deliver some sage financial advice. These aren’t dull documentaries. Some classic and not-so-classic but enjoyable films -- “It’s a Wonderful Life,” “The Big Lebowski” and “Josie and the Pussycats,” to name a few -- can teach you a bit about contrarian investing, estate planning, the high cost of divorce and other important topics.

“Almost every movie has lessons about priorities, problem solving, integrity, compassion,” said Nell Minow, author of “The Movie Mom’s Guide to Family Movies.” “And trust that, if you watch carefully, they will tell you even more about handling your money than learning the difference between a Roth IRA and a 401(k).”

Here are eight such tales, some inspirational, some cautionary. Watching them might not make you rich, but if you learn their lessons, your own money story is more likely to have a happy ending.

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THE MOVIE

“Mary Poppins” (1964)

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THE LESSON

Save some, spend some, give some away.

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In this movie, siblings Jane and Michael Banks have a classic problem: They’ve got just a few coins -- and everybody has a different idea about what they should do with their money.

Their dad, a banker, wants them to save it to learn about the wonders of compound interest. Their nanny wants them to think about giving to the less fortunate. The children themselves would like to buy a little something to play with at the park.

Like most people on a budget, Jane and Michael have limited options. They need to set goals, make choices and acknowledge that they can’t get everything immediately, said Michael Eisenberg, a certified public accountant in West Los Angeles.

Virtually anyone with a reasonable income can accumulate enough to be able to save a little, spend a little and give a little to charity -- without going into debt. But getting there takes time.

“You can have it all,” Eisenberg said. “Just not all at once.”

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THE MOVIE “Brewster’s Millions” (1985)

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THE LESSON

The power of compound interest.

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This modern fairy tale, which first appeared in a 1903 book by George Barr McCutcheon, is so popular that it has been made into a movie at least seven times. The latest version stars Richard Pryor as a baseball player in line to inherit $300 million.

The catch: He is first given $30 million that he must spend in 30 days before he can receive the much larger fortune. The theory is that he’ll get so sick of spending the money that he’ll end up a worthy heir.

(A 1926 version called “Miss Brewster’s Millions” was about a model and movie extra before whom a $5-million payoff is dangled.)

But spending even the smaller fortune turns out to be incredibly difficult. The reason: compound interest. Every time Brewster turns around, his money is earning money faster than he can spend it.

Not many average Americans suffer from this problem, but they can -- if they play their cards right, experts say. All they have to do is start saving when they’re young.

Consider a 25-year-old who starts saving $500 a month. By age 65, assuming a relatively conservative long-term average return of 8% a year, she has $1.55 million. At that point, she’s like Brewster: She can live on just the interest earned on her money -- a comfortable $78,000 a year assuming a 5% return -- and never get around to touching the principal.

“The power of compounding is phenomenal,” said David Wray, president of the Profit Sharing/401(k) Council of America. “It doesn’t have to be hard to accumulate a lot of money for retirement, you just have to start early. If you wait until you’re 50, it’s going to take real sacrifice.”

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THE MOVIE”Stranger Than Fiction” (2006)

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THE LESSON

It’s easy to miss valid tax deductions.

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Howard Crick is an IRS auditor who discovers his life is the plot of an unfinished book in which he is destined to die. To change his fate, Crick develops a relationship with a pretty bakery store owner he is auditing, who has withheld part of her income tax as a protest.

This cute fantasy has one very real element: The baker, it turns out, has missed loads of viable tax deductions.

That’s distressingly common, experts say. For example, the Government Accountability Office estimates that 27% of taxpayers eligible for deductions or credits that would help finance college tuition fail to take advantage of them.

“If somebody is trying to do their own tax return these days, it’s clear that they’re not going to take advantage of all that’s out there,” Eisenberg said. “If you have a simple return, you can probably do it on your own or with software. But people with sophisticated issues really need a professional.”

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THE MOVIE “It’s a Wonderful Life” (1946) --

THE LESSON

Buy low, sell high.

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It’s the Great Depression, and a classic financial panic has hit the small community of Bedford Falls. Banks are closing everywhere, and the lobby of Bailey Building & Loan is packed with people trying to withdraw their money.

George Bailey is the only one able to keep his head when Mr. Potter, the evil bank president from across town, offers everyone 50 cents on the dollar for their holdings in the bank.

“Don’t you see what’s happening?” Bailey implores the crowd, which is tempted to take the offer. “Potter isn’t selling. Potter is buying! And why? Because we’re panicky and he’s not. That’s why. He’s picking up some bargains.”

The idea that you should go in the opposite direction of the crowd, buying stocks when they’re unpopular and selling when they’re in vogue, is one of the oldest adages of Wall Street. But it’s incredibly difficult to do. It’s much easier to follow the crowd, even when the crowd is heading off a cliff.

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THE MOVIE

“Little Shop of Horrors” (1986)

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THE LESSON

Don’t invest in things you don’t understand.

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Seymour Krelborn, a nerdy florist’s assistant at a fairly obscure flower shop, one day discovers a bizarre plant that he dubs Audrey II. The plant is so unusual and beautiful that it draws a huge amount of business to the shop.

There’s just one catch. Krelborn learns late that the plant needs blood to survive.

Eisenberg, the Los Angeles accountant, likens this tale to contemporary real-life financial stories in which people are lured by the promise of high returns into risky investments that they don’t understand.

Hedge funds. Derivatives. Mortgage-backed securities. The more an investment appears to promise, the riskier it is likely to be. Even when the company selling the security is a household name, such as Bear Stearns Cos., an investment you don’t understand can eat you up.

“Understand what your investments are,” Eisenberg said. “Know your risk tolerance and whether your investments reflect risks you can handle.”

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THE MOVIE “The War of the Roses” (1989)

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THE LESSON

Nothing can kill your net worth like a nasty divorce.

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Barbara and Oliver Rose, who are splitting up, do battle over who gets to keep the house, which ends up in ruins.

“I’m in the middle of a trial right now where they’re fighting over a sandwich shop,” said Susan Carlisle, a Woodland Hills certified public accountant who works with divorcing couples. “They were married for a couple years, have been fighting for a couple years, and they’ve spent $100,000 fighting over an asset that might be worth $200,000.”

As in the movie, no one wins, she said. In community property states, such as California, the money spent on a divorce reduces the size of the family pie. Each party is likely to get less in the end.

“The only beneficiaries are the attorneys -- not the husband, not the wife, not the children, not the dogs, not the retirement plans or the college accounts,” Carlisle said. “The more hostile you are to the person you used to love, the more money you spend fighting and the less you have to divide.”

There are better options.

Mediation, which is designed to keep the couple out of court, can cost as little as a few thousand dollars. A collaborative divorce, in which the soon-to-be ex-spouses work with accountants and psychologists to come to an amenable settlement, might cost 25% of the expense of a contested battle, she said.

“People can spend years of their lives and virtually all of their assets fighting each other,” Carlisle said. “It’s just pointless.”

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THE MOVIE

“The Big Lebowski” (1998)

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THE LESSON

Complicated estate plans can cause complications.

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This movie’s title character is rich but gets his income from a trust, which puts him on a budget. His trophy wife, however, has expensive tastes.

So he fabricates a story about her purported kidnapping to con the trust into giving him more money. The lesson you can draw from this convoluted cult classic: Complex estate plans can have unintended consequences. On the other hand, the movie also illustrates why irresponsible heirs can make complex estate plans necessary.

“Even if you have a completely functional family, Mom and Dad ought to have a trust to save on probate and estate taxes,” said Jeff Condon, a Santa Monica attorney and coauthor of “Beyond the Grave: The Right Way and the Wrong Way of Leaving Money to Your Children and Others.”

If your heirs have special needs, drug problems, immaturity issues or other complications, you need to set up something complex, he said. How much more complex depends on the situation.

One problem with creating formulas for doling out money after you’re gone is that it’s impossible to anticipate everything. That’s one reason Condon likes to have clients name a “protector” -- a trusted friend or relative -- to serve as an advisor to the trustee. This person can act as your eyes and ears when you’re no longer around, he said.

It’s wise to have a bank or a professional trust manage the money and make the final decisions, he said, because the last thing you want to do to your best buddy is to leave him in a position to be sued by your wastrel heir.

“Have a bank be the money manager and name a real protector -- an individual, Mom and Dad’s best friend -- who can monitor the children’s lives,” he said. “But don’t make that person the trustee. Trustees get sued all the time.”

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THE MOVIE “Josie and the Pussycats” (2001)

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THE LESSON

Resist the urge to keep up with the Josies.

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Everywhere members of a newly discovered girl band go in this satire of the pop music industry, they see teens in coordinated outfits racing from store to store and screaming, “Pink is the new orange!”

The teens have been brainwashed into rabid consumerism through messages embedded in the music they listen to. It’s up to Josie, who engages in a fight scene superimposed on an ad for Advil, to thwart the evil makers of subliminal messages and tell the world’s teens that they’re fine the way they are.

The lesson is that America’s marketing machine is always at work -- through movies, music, billboards, newspaper ads, television and even video games -- and it’s effective.

“I even get caught up in it,” said Judi Martindale, a financial planner in San Luis Obispo. “I saw the advertisement for the new iPhone and said, ‘I’ve got to have that,’ ” she said. “My husband just looked at me and said, ‘You’ve got to be kidding.’ ”

If you buy into the marketing without thinking about what you really want, you’re likely to sacrifice things that are precious to you in your effort to keep up, Martindale said.

“The insidious thing about this kind of spending is that it’s never done,” she said. “You buy one new toy, and the next thing you know, you’ve got to get another new toy. And you start hanging out with people who have all the great toys, so it feeds on itself. It’s addictive.”

kathy.kristof@latimes.com