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Financial planning and the Shawshank Redemption

Shawshank Redemption the classic Prison Movie recently turned up on offer to watch on NZ Netflix. I love that movie. One of the best of all time in my humble opinion. For those that have never watched it Andy Dufresne is imprisoned for the murder of his wife and her lover. Long story short (spoiler alert!) he gets out and manages a sizeable financial windfall in the process. His best pal Red narrates that he blew town with the better part of $370,000 dollars!

This wasn’t the first time I’d watched this movie (it really is that good!) but when that part came up, I thought hmm, how much would $370K be in today’s terms? Nowadays $370K is a house deposit or modest retirement savings it was certainly big money back then but how big?

It was 1966 when Andy had his windfall, 53 years ago. It is not hard to Google this question and get a quick response back, but it piqued my interest a little further working in a Financial Advice organisation.

Apparently $370K USD in 1966 would have the same spending power as approximately $4M today.

But the Google response went one step further to suggest the following: if Andy had taken that money and invested it in the share market, in the SnP top 500 back then today it would be worth $47 Million! Whoa!

But this is not a revelation to Financial Advisers. I asked the AFA in our organisation if he would guess the amount and he responded $30M so his expectation while conservative was sound.

So, the message is, take a long-term view about saving and investing in the Share Market with good advice and balanced planning and your future can be very bright indeed! But you shouldn’t plan to go to jail first. You can skip that part.