Never Take Financial Advice from a Supervillian

I just caught the Dark Knight Rises last week. Okay, it wasn’t a terrible movie, but it’s just riddled with plot inconsistencies that I couldn’t resolve, like (SPOILER ALERT):

1. Why is there a random-ass prison in the ground, in the middle of some foreign desert, with no warden, no food, and a bunch of prisoners cheering each other on? And how did Bruce get to Gotham in like, 2 hours after escaping from said prison?

2. Once Talia dies a terribly unconvincing death, which eliminates the bomb’s mystery triggerman, why didn’t Batman just haul the damn bomb to the sea in the first place? (which would leave him a lot more time to make out with Selina Kyle?)

3. How was Jonathan Crane (Scarecrow in the first movie) planning to exile its rich citizens in the summer? (“You are condemned to exile… by swimming!” Wtf).

Stupidest Supervillian Financial Plan Ever

But the biggest plot inconsistency for a financial nerd like myself came from Bane’s hairbrained plan to bankrupt Bruce Wayne.  (Hat tip to this article from theatlantic.com).

1. Take over the entire Gotham Stock Exchange
2. Hack into Bruce Wayne’s account
3. Buy lots of puts on futures that expire at midnight.
4. Bankrupt Wayne so he’ll have to read cheerfulegg.com to learn how to get rich again

Let’s examine the loopholes in this plan. First, there’s absolutely no reason for Bane to hold the Gotham Stock Exchange hostage in order to break into Bruce Wayne’s account. A more subtle (and less risky) plan would involve breaking into Wayne’s brokerage, which probably isn’t located within the Exchange. Or better still, hire a hacker to break into his account online – certainly affordable for Bane’s considerable financial resources.

(Okay fine – a scene of Bane carefully keying in his banking token code into gothamnationalbank.com wouldn’t nearly be half as dramatic, and wouldn’t  make for good entertainment.)

Sexy Doesn’t Always = Smart

The biggest thing I’m confused about is Bane’s decision to buy a whole bunch of puts on Wayne’s account. If you don’t know what a put is, it’s a fancy-schmancy financial instrument that lets you profit when stocks go down (yes, they exist). And buying a whole bunch of them means you make a loooooooot of money when stocks crash – which is exactly what would happen if the stock exchange is under a supervillian attack. So Bane’s plan would actually have the opposite effect of what he intended – he would make Bruce Wayne so insanely, ridiculously rich that he could have outsourced the saving of Gotham to Spiderman or the Avengers.

My guess is that the scriptwriters just wanted to include the use of the word “puts” into the plot, because they sound oh-so-sexy. But as I’ve often blogged, the sexy thing isn’t always the smart thing to do. In fact, the unsexiest things you could do in personal finance are usually the smartest moves you could make:

1. Automatically saving a fixed amount every month, increasing it when you have an income increase,

2. Dollar cost averaging into a sensible portfolio of index-tracking ETFs.

3. Automatically paying off your credit cards in full every month to build your credit score, so you’ll get a lower interest rate if you ever need to borrow to buy a car/house/business.

Not nearly half as sexy as investing in hedge funds, or studying things like “delta” and “gamma”, or trading on volatility, or holding a stock exchange hostage, but they’ve proven to work over and over again. As Ramit Sethi often says:

“Do you want to be sexy, or rich?”