With 007 back in cinemas, let’s look at the mistakes of the villains of the Bond films to see what we can learn from their money blueprint.
Here are the Top 10 money mindset mistakes made by Dr Evil…
Bond villains have a certain lifestyle they think they need to maintain. Just look at Dr Evil’s housing choices.
Dr Evil has a large volcano HQ on a tropical island, an underground lair in the desert outside Las Vegas, a skyscraper in Seattle and a space station holiday home. No wonder he grumbles about the cost of council tax, utilities and builders.
For Dr Evil a house is not about our basic need for shelter. It’s a statement that he’s a force to be reckoned with. And it must be massive to hold all his laser beams, nuclear equipment and shit.
Not for Dr Evil a shared apartment or small terraced house in a bohemian part of town. No, Dr Evil’s houses must be isolated, detached and bigger than the neighbours. Oh and surrounded by shark infested water, barbed wire and a range of innovative security features.
The problem is that houses tie up a lot of our capital and the bigger they are, the higher the running costs (utilities, shark pool maintenance etc.). It all adds up.
But if you live in a distant suburb, isolated tropical island or space station, you are going to spend more on cars, helicopters and space shuttles.
2. Consumer gadgets
Dr Evil wants to own the entire world. This is a good example of lifestyle inflation.
Dr Evil started off as a boy happily playing outdoors in the woods with the other children with a toy gun. But over time he seeks happiness from ever-increasing purchases of consumer gadgets. Trapped on the hedonic treadmill, he moves on to laser beams. A few years go by and its only by having a space station that he can get that new stuff buzz again.
Dr Evil has a choice. He can either try to accumulate more and more until he owns the entire World. Or he can either learn to live more happily on less and ditch some of the igadgets and the laser beams.
3. Poor numeracy
Dr Evil, like most consumer suckers, over-estimates how much is enough to be happy and to achieve financial independence. Dr Evil doesn’t realise that financial independence does not require trillions…or even billions to achieve. All he actually needs to do to retire is get his annual expenses down as low as possible and then accumulate say 25x this amount.
Dr Evil has a hard time visualising large amounts of money and is sometimes confused by the simple maths of financial independence. He doesn’t really understand how FI seekers benefit from the aggregation of marginal gains and the magic of compound interest.
4. Scarcity mindset
We humans got to the top of the food chain using logic and co-operation to gather food and to defeat our enemies. This is why you don’t see many neanderthals around these days. By working together, we made the “pie” bigger rather than just fighting over how to divide the existing pie. When we co-operate, we create abundance.
The human brain evolved by process of addition over thousands of years, like a coal shed converted into a mansion by piecemeal extensions. Whilst we have unique human capabilities for rational thought, the mammalian and reptilian parts of our brains dominate when we’re stressed, tired, hung-over or fearful.
Dr Evil has a scarcity mindset. Sadly, he lives in fear and so is often cranky. Frugality is really important…but it’s no fun if based on fear. And you can’t just penny pinch your way to FI, you have to earn and invest effectively as well.
Bond villains tend to be gold bugs. They spend hours on the internet disappearing down a rabbit hole to an alternative world of secret conspiracies involving the Federal Reserve and China seeking to replace the US dollar as the global reserve currency and create a new Renminbi-based gold standard blah blah blah.
Having read this, Dr Evil positions himself for the coming financial armageddon by constructing an elaborate portfolio of multiple holdings of gold funds, leveraged synthetic ETFs, shares in Patagonian mining companies, gold futures, CFDs, swaptions and other such nonsense. Dr Evil overlooks the inherent implausibility that any of these pieces of paper will be worth anything in the event of a Zombie Apocalypse or similar dislocation in the global financial system.
If you are going to hold gold, best keep it to a small part of your portfolio and in physical form where you can lay hands on it. But FI-seekers need to remember that gold is not a wealth generating asset and doesn’t compound its real value over time.
Dr Evil may be suspicious of his fellow human beings but he does have a soft spot for pets. To his credit, Dr Evil loves cats and the inherent comedy potential of feline related double entendres. He also has a tank of sharks which he feeds intermittently with uninvited guests.
Through his pets, Dr Evil reveals a glimpse of his softer side and his need to be loved unconditionally. Dr Evil perhaps feels that cats and sharks are less likely than people to let him down or take advantage of his emotional vulnerability?
However, pets are costly and can limit your flexibility when plotting to dominate the world or go on holiday. And the vets bills and insurance etc etc are an issue for FI seekers.
Human vanity urges us to leave a legacy. Dr Evil is obsessed with a desire for immortality which is tricky to achieve, not to mention expensive. This is partly responsible for his excessive spending on housing (see above).
Dr Evil is lonely and struggles to form good relationships with others. Dr Evil attempts to solve this problem by having a clone of himself made in a laboratory.
But parenthood is not for everyone. Whitney Houston may have sung that the children are the future…but they’re also expensive. All those matching uniforms and buggies are not cheap…even at Primark. So FI-seekers (and everyone else) should think long and hard before bringing more mini-mes into the world.
Dr Evil has had many chances to achieve his apparent objective of killing James Bond. But the truth is that Dr Evil feeds off the rivalry.
This may explain the over-elaborate ways in which Dr Evil seeks to bring about Bond’s demise. Dr Evil’s over-elaboration is ineffective in practice and allows Bond plenty of opportunities to get away.
Dr Evil’s penchant for over-elaboration is also a drag on his portfolio performance. Dr Evil can’t resist the temptation to keep adding more holdings, often doubling up needlessly on diversification. By combining multiple actively managed funds with high platform costs and the costs of a financial adviser, Dr Evil effectively self-sabotages his own investment returns. Doh!
Sometimes we create our own reality. Dr Evil sees other people as a threat. So he undertakes elaborate plots to hold the world to ransom which does not help him win friends or influence people. People respond in kind and a downward cycle is commenced by which Dr Evil sows the seeds of his own downfall.
Dr Evil is also a pessimist when it comes to investing. He assumes the last 50 years of prosperity have been a freak exception. Dr Evil fears that that welfare costs in the West may be unsustainable, that China will take over the World (or go bust – he tends to flip between these extremes) and that western civilisation will come crashing down in the future…perhaps with his help. Dr Evil tells anyone who will listen (and some that won’t) that the days of good investment returns in the equity market are over.
Unfortunately we have no way of knowing whether these predictions will actually come true. Trying to predict the future is a mug’s game and a poor basis for an investment process. In investing, it has historically been more rewarding to focus on looking for value opportunities and to err on the side of optimism.
Life, and his time in the Prison Camp, has taken its toll on Dr Evil. Emotionally damaged, he has learned to repress his feelings. Dr Evil has gradually lost touch with friends and become isolated.
It’s unclear why Dr Evil continues to accumulate ever more gadgets, gold and real estate. Doesn’t he realise how much is enough? Perhaps he is seeking to prove himself to his father? Or to others whose approval he craves?
Whatever the reason, Dr Evil avoids asking for help…which is a shame because his bad habits and limiting beliefs could be fixed with some coaching and some work on himself.
Or perhaps therapy could help him? Check out the wonderful Carrie Fisher cameo here:
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