{"id":2581,"date":"2010-10-07T16:03:19","date_gmt":"2010-10-07T23:03:19","guid":{"rendered":"http:\/\/www.bspcn.com\/?p=2581"},"modified":"2010-10-07T16:03:19","modified_gmt":"2010-10-07T23:03:19","slug":"personal-finance-lessons-from-%e2%80%9cthe-social-network%e2%80%9d","status":"publish","type":"post","link":"http:\/\/localhost\/wordpress\/2010\/10\/07\/personal-finance-lessons-from-%e2%80%9cthe-social-network%e2%80%9d\/","title":{"rendered":"Personal Finance Lessons From \u201cThe Social Network\u201d"},"content":{"rendered":"

Written by Joshua Ritchie<\/a><\/p>\n

\"\"<\/p>\n

(Andrew Feinberg<\/a>)<\/p>\n

Tech geeks and Facebook enthusiasts are filling America\u2019s theaters to see The Social Network<\/a><\/em>, a film about Mark Zuckerberg and the founding of the now ubiquitous social networking site. We won\u2019t spoil the plot for you, except to say that it does not paint Zuckerberg in an especially flattering light. Facebook\u2019s founder (though wildly successful) is portrayed as being selfish, stuck-up and disloyal to his closest friends. (Not surprisingly, Facebook far from endorses the movie: Zuckerberg, according to the New York Times<\/a>, has called the movie \u201cfiction.\u201d)<\/p>\n

But while the movie is hardly a sterling example of etiquette, it does offer some outstanding big-picture lessons about personal finance<\/a> and money management<\/a>.<\/p>\n

Be Decisive<\/h4>\n

For all Zuckerberg\u2019s unsavory traits (and the movie portrays plenty) there is no denying his decisiveness. When the idea of allowing Facebook users to list their relationship status on their pages sprang to mind, he didn\u2019t scribble it down in a notebook and tell himself he\u2019d do it later: he ran to his dorm across a snowy field in flip-flops to code it right away. When he decided to expand Facebook, he immediately dispatched marching orders to his team about infiltrating other Ivy League schools.<\/p>\n

When it comes to our financial affairs, many of us are not nearly as decisive. We\u2019ll skim through articles about investing or retirement planning, but how many of us would immediately invest into an index fund or set up an IRA? If you already have, great! If not, resolve to be more decisive about your money. As soon as it becomes clear that you ought<\/em> to be doing something, get down to doing it.<\/p>\n

Take The Long-Term View<\/h4>\n

\"\"<\/p>\n

(deneyterrio<\/a>)<\/p>\n

For all his good intentions, Eduardo Saverin (Mark\u2019s then business partner and best friend) failed to see the big picture of what Facebook was becoming. Like any good businessperson, he looked at Facebook\u2019s exploding user-base and saw something to be monetized. Thus, he constantly pressured Zuckerberg to start hooking up with advertisers and capitalizing on the popularity of the website. But Zuckerberg staunchly resisted. After all, he said: thousands of people were falling all over themselves to join Facebook every day, just the way it was. Cluttering up the site with ads could have destroyed Facebook\u2019s growth for a relatively pitiful amount of money.<\/p>\n

A similar lesson applies to you and your financial life. Like most people, you probably have long-term goals: maybe it\u2019s home ownership, a new car, or the dream of some day starting a business. The only way to reach these goals is by making sacrifices in the short-term. Sure, you could<\/em> theoretically spend your latest raise on a $5,000 wardrobe, but how long will that delay your dream of owning a home?<\/p>\n

Keep Costs Low<\/h4>\n

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(Robert Scoble<\/a>)<\/p>\n

One aspect of The Social Network<\/em> that isn\u2019t getting much attention is how little money Facebook spent early on. Facebook (today worth over $25 billion) required just $19,000 in startup capital before getting VC funding. $19,000 is no small sum in most situations, but in light of what Facebook ultimately became, it\u2019s barely a drop in the bucket.<\/p>\n

The way Facebook stretched that money so far is by using it only for what mattered most: servers, good ones and lots of them. This concept is one we can all follow. In his New York Times<\/em> best-seller I Will Teach You To Be Rich<\/a><\/em>, Ramit Sethi tells readers to \u201cspend extravagantly on the things you love, and cut costs mercilessly on the things you don\u2019t.\u201d If you can live with bargain brand toilet paper or peanut butter or taco shells, for instance, there will be more money to spend on the entertainment, clothes or hobby that you truly love.<\/p>\n

Do Your Homework<\/h4>\n

\"\"<\/p>\n

(SimonDoggett<\/a>)<\/p>\n

In The Social Network<\/em>, Mark Zuckerberg is often seen bragging about how smart he is. If Harvard\u2019s network security team really knew what they were doing, it wouldn\u2019t have taken them four hours to shut Facemash (Zuckerberg\u2019s first website) down. If the Winklevoss brothers were truly Mark\u2019s intellectual peers, they would\u2019ve built <\/em>Facebook instead of just thinking of something similar. It\u2019s easy to dismiss all of this as arrogance, but that arrogance was well backed by intelligence.<\/p>\n

In personal finance as in business, it really does pay to be knowledgeable. Your financial life is important. While money isn\u2019t everything, the decisions you make about mortgages, savings and investments play a major role in shaping what kind of lifestyle you have. Luckily, you don\u2019t need to be a Harvard-educated genius to make smart financial decisions. Just do your homework. Educate yourself on key financial topics by reading books and articles. Be open to constructive criticism and continuously examine whether you\u2019re on the right track.<\/p>\n

Bonus:Uphands<\/h3>\n

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