Space operas are exciting, with droids, blasters and galaxies far, far, away. Financial advice is often dull, and focussed on doing without, dying, and matters down, down to Earth. Is it any wonder millions more of us watched the lamentable Episode 1: Phantom Menace than will ever read The Millionaire Next Door?
But what if Star Wars could teach us something about personal finance? Well, read on to discover what the classic trilogy’s major characters know about money.
(Note: I’ve ignored all the characters from the ‘Trilogy of Shame’, even the good one(s). If you know where Jah Jah Binks or Count Dooku would stash their cash, I’d love to read your thoughts in the comments below).
“Never tell me the odds!”
Swash-buckling from system to system, Han Solo is an entrepreneur who makes his own luck. With great contacts, low overheads and the fastest hunk of junk in the galaxy, you’d imagine Solo’s got it made, right? Think again…
Money weakness: Debt. When I explained why you must get out and stay out of debt, I skipped over the risks from bounty hunters and being frozen in carbonite. But Han’s high interest debts and gambling habits are all too typical of self-made high-rollers.
Monevator says: Han needs to ditch his debt addiction and focus his nose for money on long-term goals. He must also learn about the pros and cons of compound interest. A storecard debt of just 1,000 galactic credits at 18% interest with minimum payments of 2% will take nearly 20 years to pay off. In contrast, a typical stock market index fund growing at 10% (before costs, taxes and inflation) could give Han an extra 10,000 credits in his retirement pot in 25 years time. The bottom line? Take risks when earning money, but avoid delusions of grandeur.
DARTH VADER / ANAKIN SKYWALKER
“I want more. But I know I shouldn’t.”
Like his son Luke, Anakin Skywalker’s big problem is impatience. Having escaped from a dead-end future as a child labourer on a planetary sand dune, you’d think Anakin would be set as one of the top-ranked Jedi in a civilisation of trillions. But no, he wants a Ferrari.
Money weakness: Darth Vader is the guy who replies to scam-letters from Nigeria, who responds to cries of “No Money Down!” or “Easy Credit Terms!” with more drooling than a Wookie sniffing banoffee pie. Even getting rich quick isn’t fast enough for Anakin – he wants it all, now!
Monevator says: There are no shortcuts in investing and precious few in business. Leave your luck for the lottery, and concentrate on achievable wealth goals. Darth Vader only redeems himself when Luke reminds him what really matters (via the tough love technique of a deadly light-sabre duel). We all get frustrated when our career isn’t going fast enough or our savings are stalling, which is why we need a realistic plan to stop us straying to the Dark Side.
“Do or do not. There is no ‘try’.”
Living in a leaky hut in a swamp with snakes for company, it’s clear that Yoda isn’t keeping up with the Jones’. Sure, it’s great that a Jedi Master who’s well into his Free Bus Pass years can levitate an X-Wing, but most of us would like a bit more comfort too in our retirement.
Money weakness: Yoda once led the Jedi council – now he’s eating pulped vines for supper. Yes, circumstances went against him, but Yoda typifies downsized corporate warriors who put too much faith in their company and their pay cheque and not enough aside for a rainy day. And there are a lot of rainy days on Dagobah.
Monevator says: Dying at the age of 900, forgotten to all but a few dead friends, Yoda offers a warning about the drawbacks of increasing longevity. Here on Earth we’re living longer, which means we must save more for our old age:
Today’s retiree will make it to 73, and today’s baby to 90 and beyond. Women live longer still and a 60-year-old retiree today might live to 87, and a new baby to nearly 94.
As a rough rule of thumb, start saving half your age as a percentage of your annual salary, every year. For instance, if you’re 30, put at least 15% of your income aside annually for your old age.
“It’s all such a long way from here.”
Having been plucked from obscurity as a surf bum on a sea-less planet to become the last hope for the Jedi, you’d think Luke would be willing to listen to advice. But like many talented young men, he is eternally restless and disdainful of the long-term picture.
Money weakness: Remember his failure at the cave? The Luke of The Empire Strikes Back wants a quick solution to his problems, believing his prodigal skills as a Jedi mean he doesn’t have to worry about grafting to secure his future.
Monevator says: The Empire wants your talents, Luke! Save hard whilst you’re young and you can buck the system when you’re older, and so escape early from the rat race.
“Somebody’s got to save our skins!”
Oh dear. Being born into a life of privilege and having one of the most powerful men in the Galaxy for a father didn’t help feisty young Leia when her home planet of Alderan was totally blown away. Bang goes the inheritance!
Money weakness: When we first meet Leia in Episode 4: A New Hope, she’s an archetypal spoiled rich kid; Daddy’s little princess, slumming it with a ragtag band of rebels. Sending R2 to Tatooine without a receipt smacks a girl who has never had to save to buy her own droid.
Monevator says: Over the course of the Star Wars trilogy, Leia finds a balance between relying on others and fending for herself. Conventional at heart, she learns from Han Solo the benefits of risk-taking (and of travelling with a wookie) while the Rebel Alliance gets her mucking in with the dirty work. Post-Return of the Jedi, Leia needs to focus on married life with Han. She still wants excitement, but excitement on a budget. Anyway, escaping from an Imperial trash compactor is the sort of experience money can’t buy.
JABBA THE HUTT
“There will be no bargain!”
You identify with Jabba the Hutt? Erm, come on in Sir, and make yourself at home. Have a pickled frog! Thing is, you’ve got resources and get-up-and-go, but you’ve steered your sail barge rather too close to the edge to be secure.
Money weakness: Morals aside, the trouble with making money in dubious ways is you’ve got no recourse if it all goes wrong. (Who are you going to call? The police?) What’s more, you’re likely to make enemies. Sooner or later one is going to toss a thermal detonator into your life, or at least pull you up on your taxes.
Monevator says: Don’t break the law just to get rich – money isn’t worth going to jail for. Besides, if you’re naturally a bit ‘wide’, there’s never been a better time to be a legal entrepreneur. The Internet offers ways for quick-witted individuals to make a buck out of nothing, and if you want women in chains there’s plenty of scantily-clad females online, too (link not safe for work).
Money blogs: I’m not going to point you towards dodgy sites. Play nice. Two Internet blogs that (legally) push the envelope of online money making, however, Shoemoney and John Chow – might be more your cup of tea than saving loose change in a coin jar. And how could you resist a blog called The Lazy Man and Money?
Right, that’s enough of that. I hope you recognised yourself in there, and picked up a tip or two. May the Force be with you (sorry, it’s in the terms and conditions) and please do subscribe to Monevator.com for the nerdiest financial writing in the Galaxy.