2023 is the 30th anniversary of Jurassic Park, the smash blockbuster hit about a prehistoric zoo gone wrong.
The film was a massive success on first release, earning more than $1 billion at the box office – indeed, it was the highest-grossing film ever until Titanic beat the record upon release in 1997.
Aside from terrifying encounters with long-extinct prehistoric monsters, you can even learn some unexpected financial lessons from the beloved dinosaur classic. Here are five.
1. Financially prepare yourself for any eventuality
As a fail-safe, the scientists in Jurassic Park genetically engineered all the dinosaurs to be female. This was supposed to prevent the animals from overpopulating the island should they escape.
However, the scientists used frog DNA to fill in the gaps in the genome, and they failed to predict that some West African frogs can switch from female to male in a single-sex environment. Life indeed found a way, as the gifted mathematician Ian Malcolm, played by Jeff Goldblum, succinctly put it.
You should ensure you have your own fail-safe in case of an emergency. Do you have cash you can access quickly if the unexpected happens, like your boiler breaks down or your car needs repairs?
As such, it may be worth setting up, or increasing your contributions to, an emergency fund.
Ideally, you should save between three- and nine-months’ worth of household expenses in an easy access savings account. By doing so, you ensure you’ll be able to access the money straight away if you need it. If you’re self-employed or have dependents that rely on you, it may be worth saving more.
By building an adequate emergency fund, you’re preparing yourself for any financial shock that may occur in the future.
2. Don’t put all your eggs in one basket
Nedry, the island’s sole IT specialist, was the only one who knew exactly how Jurassic Park’s security and computer systems worked. Due to his importance, he felt he deserved more pay and quickly became disillusioned with InGen, the company that operated the park.
As a result, Nedry decided to steal dinosaur DNA for a competing company in exchange for a considerable sum of money. Though, to discreetly access the DNA storage, he first had to turn off the security systems.
After his unfortunate eyesight-related death, everything started to go wrong, as he was the only one who knew how to fix the problems in the system and get the electric fences back online.
In this instance, InGen put all their eggs in one basket by only hiring one IT specialist – a critical blunder for a so-called mega corporation – and they suffered for it.
You can say the same thing about investing. It may be best to avoid investing in one particular company or sector, instead spreading your money across several distinct securities and industries.
For example, if you’ve invested the majority of your money in tech companies and the sector goes through a period of unexpected volatility, there’s a good chance your portfolio will lose value.
It may be wise to work closely with a financial planner to create a diverse portfolio that’s aligned with your own tolerance for risk. A planner could potentially help you structure a balanced portfolio to reflect your needs over the long term, giving you the confidence that your money is working as hard as it should be.
3. Expect the unexpected
As is the case with many blockbuster films, it was a series of unfortunate events that led to the park’s downfall. It was a combination of the tropical storm, the infancy of the park and its systems, and Nedry’s corporate espionage.
These factors were likely completely unexpected, and the park may have succeeded if these things didn’t happen. Instead, the dinosaurs broke out and, well, you know the rest.
You can say a similar thing regarding your finances – you should always expect the unexpected.
Take the Covid-19 pandemic, for example: it was completely unexpected and caused significant market volatility and downturn that affected companies in many different sectors.
Jurassic Park discusses the concept of “chaos theory” throughout the film. It’s the belief that small, unpredictable factors can cause ripple effects and lead to more momentous events. You could apply this same school of thought to your own financial situation.
Even small, seemingly insignificant events now could lead to significant changes somewhere later down the line, so it’s best to be prepared for anything. It may be wise to reassess your appetite for risk regularly. By doing so, you could ensure you aren’t taking on too much risk for your current financial situation.
Increasing your financial literacy is another fantastic way to prepare yourself for any eventuality, and perhaps the best way to do this is by speaking with a financial adviser.
4. Think twice before investing
As you can imagine, genetically engineering dinosaurs doesn’t come cheap – while the film doesn’t mention an exact figure, John Hammond, the creator of the park, often said: “We spared no expense”.
This probably wasn’t a wise investment for InGen, as it’s doubtful they would have recouped their investment once the dinosaurs ran amok.
It may also be worth thinking twice about your own investments. Something may seem like an attractive investment opportunity too good to pass up, but you should do adequate research into a security before you invest.
Take GameStop, for example. Its price rose significantly as Reddit users artificially drove up the price, resulting in many investors jumping on the bandwagon. Though, the company’s price soon dropped rapidly, and many who expected instant results instead lost money.
You should keep the discussion between Ian Malcolm and John Hammond in mind as they pondered the ethics of cloning: “Your scientists were so preoccupied with whether they could, they didn’t stop to think if they should”.
Sometimes, it’s worth taking a step back before you invest and take a more comprehensive look at the security or market as a whole.
5. Don’t expect instant results
John Hammond expected his venture to be an instant success even though he was meddling with science and technology that he didn’t yet fully understand.
As Ian Malcolm, the apparent chief philosopher in Jurassic Park, said: “You didn’t earn the knowledge for yourselves, so you don’t take any responsibility for it. You stood on the shoulders of geniuses to accomplish something as fast as you could, and before you even knew what you had, you patented it and packaged it and slapped it on a plastic lunch box, and now you’re selling it”.
When you’re investing, you will usually be working to a medium- to long-term time frame. This can help you to increase your potential for growth.
In fact, data from Nutmeg shows that the longer you stay invested, the higher your chance of a positive return. They say that if you randomly picked one day between January 1971 and July 2022 to invest, and held this position for just 24 hours, you’d have roughly a 52.4% chance of making positive gains.
Meanwhile, if you held this investment for any random quarter during that same time period, your chances of positive returns would rise to 65.6%. Hold it for 10 years, and you would have had a 94.2% chance of positive gains.
Get in touch
While managing your finances may not be as stressful as overseeing a prehistoric zoo, it doesn’t hurt to have someone in your corner.
Please email us at info@investmentsense.co.uk or call 0115 933 8433 to find out more.
Please note
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
