Game of Thrones has been the most popular series on television for several years due to its portrayal of drama, sex, and violence set in a medieval / fantasy world. Since there is one more episode left in the 7th and second to last season, I thought it would be fun to write about lessons that Game of Thrones can teach us about personal finance. At first you might say that there are no financial lessons to be learned from a fictional TV show. However, there are 3 lessons that everybody can benefit from applying to their own lives.
Spoiler Alert: If you’re still catching up on Game of Thrones Season 7 watch out for potential spoilers ahead.
Lesson #1: Prepare For The Future
“Winter is Coming” is a popular refrain from House Stark throughout the series. This tagline is used to warn people to prepare for the eventual winter which usually hits Westeros particularly hard. The winters there can last for a very long time so everyone needs to prepare during the summers. During a long winter crop yields may be low so people will end up starving.
Just like in Game of Thrones it is good financial advice to prepare for the worst when everything is going well. The latest bull market is a great example. Since 2009 the stock market has experienced one of the longest bull markets in history. This is the correct time to be preparing for the next “winter” (recession).
Write down your financial plan and stick to it. Don’t let your emotions cause you to change course if the market is down 50% or more in a year. If you are investing monthly in your 401k commit to yourself that you will continue to do so if the market is down big. Remind yourself that if the market is down you are buying stocks on sale!
Lesson #2: Pay Off Your Debts
As House Lannister constantly reminds us in the show, “the Lannisters always pay their debts.” This decree is handed down from Tywin Lannister to his children. They are all very serious about honoring their commitments and their reputation. In season 7 Jaime paid Bronn and Cersei paid the Iron Bank of Braavos.
Once again Game of Thrones provides valuable financial advice. Americans take on a massive amount of debt whether it is credit cards, mortgages, student loans, car loans, etc. It’s fine if you use debt for a little bit of leverage, but you must be willing and able to pay it back.
The danger of debt is that it can become a constant tax that you are forced to pay. Once the debt is paid off the tax goes away. Think about how much money you would be saving if you paid $5,000 for a used Japanese car versus a brand new $35,000 German car with a 5% per year loan. In this example you end up paying about $5,000 in interest over 5 years. Don’t take out a loan unless you plan on paying it off early. Take the money that you would be paying in interest and either have some fun with it or invest for the future.
Lesson #3: Everybody Needs Insurance
In Game of Thrones the characters never know when war is coming. They pay for insurance in several forms. One is in forming alliances with other houses. The Lannisters are allied with House Tarly and Euron Greyjoy. If a war breaks out they are able to rely on their alliances to come to their rescue. Daenerys Targaryen wasn’t satisfied with just one Dothraki army. Her insurance is the Unsullied army and her 3 dragons. She has been lucky to have insurance in Season 7. Her Unsullied have been decimated and her “child” just turned into an undead ice dragon.
As in the other examples you need insurance in case the worst happens. Everybody should own medical, car, home, and life insurance. If a tragedy happens you need to be able to pay for it. There are so many people who think they are saving money by avoiding insurance. Don’t become a statistic with hundreds of thousands of dollars in medical debt if you become sick. You may think you are young and healthy and nothing will happen to you. Wrong! Bad things happen all the time and you need insurance.
This was a fun post to write! I enjoyed comparing the worries of fictional characters on a TV show to real life financial situations. Remember to prepare for the future, pay your debts, and buy insurance. If you aren’t doing one of these things you should start right away. Don’t wait for a financial collapse or a personal tragedy to start thinking about these topics. Like the plots on Game of Thrones, life has a habit of being unpredictable!
Readers, can you think of any additional personal finance lessons from Game of Thrones?