The Must-See Financial Movie of the Year (& What We Can Learn From It)

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The Big Short is absolutely one of the best financial movies I’ve watched in a long time. It’s right up there with Glengarry Glen Ross for sales people, and 99 Homes for the real estate crowd. The Big Short features some pretty big name actors and did very well being nominated for five Academy Awards. However, what’s best about this movie is its real look behind the mortgage crisis of 2008. It is an eye opening movie that really makes you think about what goes on behind closed doors at some of these large corporations.

Here’s what I learned from watching it.

 The Run Up to 2008 Was Absurd

What was being done behind the scenes at the highest levels was just ridiculous. If more people were aware, the correction certainly wouldn’t have been a surprise to anyone. This is essential to watch for all those who weren’t active in real estate before 2008, so that they know what really happened and know what to be alert to.


Always Be Aware

Always be alert to what is going on in the market. This not only applies to current real estate sales and price trends, but trends in mortgage lending and the secondary market. Throw out the front page news, dig into the data and learn the word on the street yourself.

Related: 4 Influential Business Books Every Entrepreneur Should Be Reading

Buck the Herd

The big gains are made, and preserved, when you go against the herd. You can make money from the herd’s blind stampede mentality. But be careful to buy right, and complete due diligence in order to achieve sustainable gains, and to select and structure sustainable investments. When your uber driver starts talking about venturing into flipping houses then that’s a good sign the masses are heading into that sector. 

Always Be Learning

I’ve always been committed to constant self-improvement. This movie helped me get an even better perspective on this and the need to continually educate myself and expand my knowledge on the big economic picture. I am further educating myself specifically on the Federal Reserve, which came in existence to regulate banks. I believe watching what they do is a good indicator of where we are as an economy. They control the interests rates in America, which at this moment are low, allowing for more people to spend and borrow money.



Related: What I Learned About Building a Great Business From Author Jim Collins

Think for Yourself

This goes beyond due diligence and rushing to join the fad of the moment. Truly think for yourself — outside of the box that some big manipulators want you to be in. Don’t just take being stuck in their sandbox. Think about the whole playground as being open to you, and think long term, not just about what’s for lunch today.


Besides the fact that Steve Carroll can actually play a serious role, there is a lot of powerful insight to glean from watching The Big Short. It really is a must for anyone thinking about any type of investment, especially real estate or mortgages. Check it out and comment on your favorite parts or biggest lessons.

Have you seen this film? If so, what did you think?

Let me know what life-changing movies you’ve watched lately!

About Author

Sterling White

With just under a decade of experience in the real estate industry, Sterling currently manages over $10MM in capital, which is deployed across a $26MM real estate portfolio made up of multifamily apartments and single-family homes. Through the company he co-founded, Holdfolio, he owns just under 400 units. Sterling was featured on the BiggerPockets Podcast and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single-family investing and apartment investing to wholesaling and scaling a business.


  1. Mike McKinzie

    Whats funny is that I had a house right in the middle of that big mess. In 2002, I bought a small house in Bayfield, CO. I was a single father and had custody of my two boys. I bought the house for $130,000. I then got married and sold the house for $200,000, in 2004. I only put $30,000 down so when I sold it, I netted $100,000. But HOW did the people buy my house? They got an 80% first, a 15% second AND a 5% third. They bought a house for $200,000 with NO MONEY DOWN. They had NO skin in the game. So what happened when one of them lost their job? The house was foreclosed on in 2008. And THE BIG SHORT showed this happening in Florida, but it happened EVERYWHERE!!!! I saw houses in the Inland Empire area of California that sold for $500,000 that today go for UNDER $100,000. I mean, who wants a three hour commute, every day, to Los Angeles? That was a very good movie!

  2. The movie was a fantasy that focused on blaming big banks for the stupidity of many home buyers, the federal government, and of course the real estate industry.

    I sold houses to buyers in 2006 and 2007 and EVERY buyer got money back at closing, usually between $2000 and $3000. A renter for one of my homes, typically needs to come up with between $2000 and $3000 just to move in. Many of the buyers in 2006 through 2008 lived in houses for several years without making payments. In my town, a family lived in a million dollar house ( that had been refinanced for 1.5 million) for 5 years without making payments. I start evictions on renters if they are 5 DAYS late.

    I have no sympathy for a family that moved in with no money down and did not make payments for multiple years. They are NOT Victims. The only victims were decent people that bought in the mid 2000s and made their payments on time every time. 25% of these folks are still under water.

    Regardless of your politics, the 2007-2008 crisis was very complex and smart people are still arguing over what caused it. If you are liberal, you blame George Bush and the Banks. If you are conservative you blame Bill Clinton ( repealed Glass Steagall) and federal government loan policies. The truth is probably all of the above.

    The Big Short is a cute movie with good acting. It has very little to do with what actually happened.

    Smart investors should not take lessons from the Big Short. Take lessons from Warren Buffet. Buy when they are selling and sell when they are buying. Probably time to get out of the stock market. And there are still a lot of cash flow rental houses sitting out there waiting for patient investors.

    • Mike McKinzie

      Whomever made the decision to LOAN MONEY to UNQUALIFIED PEOPLE is to blame. While there are a plethora of problems with the 07-08 meltdown, the idea of using $50M worth of mortgages to make a $1B bet is ludicrous, aka DERIVATIVES. While the movie does take “Cinematic License”, I felt it gave some really good OVER VIEW of some of the things that were going on. I have a friend who bought 60 rentals in Las Vegas between 2004 and 2008. He lost them ALL. His fault? The banks? The government? But when the US Government has to spend between $750B and $1T to fix a mess, there was definitely some huge losses. And take a lesson from Warren Buffet? Always gamble with other people’s money? Warren Buffet hasn’t beaten the S&P in something like 8 or 10 years.

      • Hi Sterling, I buy, flip, and rent in the Chicago suburbs. Every single market in the US had no money down programs in 2005 to 2007. Owners were permitted to give 3% back for “closing costs”, so in most cases buyers received money back at closing.

        I got my start in the business through easy lending. Countrywide financed 8 of my rental properties with no doc loans. Other lenders did the same. $900 closing costs, No doc, no income verification, no nothing. I did have to put 25% down on every house. That’s what saved me and the banks: I had skin in the game and equity. In at least two cases, I was “forced” to take a second as a condition of receiving the first loan. In several cases with Countrywide, I was literally forced to take one of those negative amortization loans. I could tell the lending officer was being really pushed to sell that product to me. Thank God I sold and flipped those houses and did not get stuck with those loans when the market tanked.

        All my houses cash flowed, so when the markets tanked, I just collected the rent and paid down the mortgages. In 2012, I think it was, Obama came up with this thing called HAMP and I was able to refinance most of my high cost mortgages with 30 year fixed at 4.5% loans. Again, no doc, no appraisal, no nothing. They were very excited to refinance these loans to prove they were “helping” people.

        Then in 2008, they stopped ALL investor lending and the banks will no longer even talk to me. I found a local bank that loans me on my rentals and flips based on cash flow and equity.

        I have survived with some skill, some luck, a lot of patience, and the grace of God. I provide safe, clean decent housing to over 40 families. I only have one underwater house remaining. But I have had the same renter for 8 years and refinanced the house and have good cash flow. I guess my strategy is to pay the mortgage down to 0! Yes, real estate does work, it just takes time!

        My point is the movie was fun and it does have some lessons. But I hate to see investors and people point the direction of someone else for their troubles. You have to OWN your future and your success. Failure is not the fault of the banks or the federal government.

        Sterling, thanks for your posts. I enjoy reading them.

  3. I think the bleeding heart person who believes the primary blame belongs on the shoulders of the Buyers has overlooked the cynical, immoral and unethical business practice of Financial representatives selling products their employer (AIG) has shorted or betted against, wow.

    Can you imagine looking at a Toyota or Ford and while the car sale\’s person glibly pontificates what a great product he/she represents, the Dealership is betting against the very car manufacturer it represents and is not disclosing this to the buying public.

  4. chris depalma

    The movie failed to stress that this entire mess was the fault of the Federal Reserve and the Government wiht the community reinvestment act. The FED wanted to stimulate the economy with their keynesian methods, and the government wanted to buy votes and campaign cash from people who could not afford a house and banks that wanted to profit from the scheme.

  5. Naveen Desai

    Nice article @Sterling. Movie is entertaining.
    Few facts : Many of you have commented on the article, but no mention of who/how got to the Idea to do the short!
    Surprisingly, the guy who saw this coming is neither a Real Estate expert, nor Finance ( although he is now a fund/asset manager). The guy is Michael Burry – a medical Doctor. He read a Vanity fair article in 2004 which sparked his interest to research mortgages and he started investing into and become a hedge fund manager.
    The movie in the beginning shows his MD qual, but never after in the movie is there a mention of that, and may be for a good reason, so not to divert from the topic.
    Michael Burry’s current investment focus is in — guess what !! Clean drinking Water. Liquid gold. [I hope there wont be world war’s happening for holding Clean drinking Water], time will tell. ” So, I am looking for properties with water wells 🙂 “.

    I had always been telling my friend that she wastes time reading a huge bulk of junk [vanity fair magazine]. Only till she learnt that it is Vanity fair magazine that made Michael to look into mortgages. Now, I am shut down from commenting about my friend’s interests :).

    • Sterling White

      Thank you for the back story on Michael Burry. Interesting the idea started with a simple read of Vanity Fair!

      “Michael Burry’s current investment focus is in — guess what !! Clean drinking Water. Liquid gold.” Is this true, Naveen? I wonder what the thought process is behind this philosophy.

    • Valerie Hiscoe

      I didn’t actually mean to watch ‘The Big Short’. I just accidentally clicked on it in Netflix and then, curious because of the big name actors, watched it unfold like watching a slow-motion eight car pile-up, mesmerized with a kind of horrific fascination. I couldn’t believe what was happening. I can’t believe what the people who first became aware of what was happening must have gone through while they were powerless to stop it, scorned for drawing attention to it, and had to watch it play out with sickening certainty. It’s not hard to see why the movie referred to arrests made – truth is certainly stranger than fiction. And not only did the movie make reference to Michael Burry’s investment preference since that time, it also said that he’s been audited like six times. So, so much for acknowledgement.

      I was virtually clueless about the sub-prime melt-down before watching this movie. I live in Canada so the things done in the US weren’t legal here and the only repercussions that we really felt were a result of the slowdown in the American economy. I now have a much better understanding of what happened though – I’m grateful to the makers of this movie – but I really must say I mourn my innocence and naivete and was really saddened to see Frank’s reference above to the resurgence of some of these financiers’ games.

  6. Lisa Gerard

    I just saw this movie a few days ago. It was very interesting. You almost have to watch it more than once to really absorb everything that was happening. IMO there was plenty of greed going on from top to bottom in these transactions, from the big banks on down to the home buyers. No one group has an exclusive on greed or corruption. Maybe it’s a human condition? In any case, common sense and critical thinking go a long way toward keeping yourself away from trouble.

  7. Michael Williams

    “I think the bleeding heart person who believes the primary blame belongs on the shoulders of the Buyers has overlooked the cynical, immoral and unethical business practice of Financial representatives selling products their employer (AIG) has shorted or betted against, wow.”

    Thank you for that Tom

    For the gentleman that wrote, the blame lies on the consumer, what about this.

    If you lose your job due to a bad economy and you ask the mortgage company for a modification until you can get back on your feet and they say they CAN do it, just fill out this paperwork. The first thing they tell you is “Don’t send any payments”. You say, “O.K cool this will help me get caught up on some bills”. You fill out the modification paperwork and verify that you’ve done everything they ask. Thirty days after sending it back to them they tell you something is wrong and you have to fill it out again. So you fill it out and send it in again. Another 30 days pass and they tell you the forms that you turned in are out of date so you have to do it again. You start to smell something fishy so you get them on the phone to go over the paperwork step by step. But before you send it in this time you’ve found another job and have borrowed from friend to pay two mortgage payments. So you send it off a third time with two payments because it doesn’t feel right. But they send it back to you and say do not send payments. So 30 more days pass and you have to call them and ask them the status on your modification. They tell you that your modification has been denied. So now you are facing foreclosure because you used the money they sent back to catch up on seriously delinquent bills and support your family and you are 3 months behind. Yes every family should have something set aside for a rainy day but about 90% of the population does not. “No” it’s not your fault that they did not have access to financial education at an early age like some; but that does not negate the fact that this was done so that the house would go into default and trigger the home owners insurance to pay for the house. This usually happens on the 91st day of delinquency. So the bank, or in most cases J.P. Morgan Chase, got all of those debts wiped by AIG.

    But this modification game was played with millions of home owners that trusted the system and got bit like the masses of people in the Movie. Steve Carroll was devastated because he knew that the banks and big money knew that this was coming and let it happen (maybe even orchestrated it) so they could line their pockets. If you have companies selling pools of notes on the stock market separating the mortgage from the note creating an un- secured debt (Bifurcation) and intentionally causing houses to go into foreclosure so that the mortgage insurance would pay for the house, that’s not the fault of the consumer. That is unethical, and predatory behavior. Then they sell the house to servicing companies after they have been paid for by AIG and collect again on a house that they really should have no legal right to collect on; and try to force the homeowner to pay on a house debt that has been satisfied. Also the law says they can’t take the house and collect a balance as well. They can get only get one or the other. So to the gentleman earlier I ask…:is this the consumers fault?

    Now as a real estate investor my goal is to utilize strategies that work in any economy, but it is good to know what to expect by knowing the tricks that are being played.

    O.K. now that the rant is out of the way,….I loved the movie and went to work encouraging my coworkers to check it out. Oh, by the way, for those of you that follow history guest what company was untouched by the 1929 stock market crash. J.P. Morgan. uuuuhhhmmmmm

    Good article Sterling

  8. Adam Christopher

    I really enjoyed the movie. My favorite character was the medical doctor. He had the balls and “social skills” to bet against everyone else, while they laughed in his face. I had a similar experience when I bought my first two houses, when the housing market was near the bottom. Everyone was very scared. I’m like, “I’m going to buy a house.” Most everyone around was like, “Are you crazy?” Now that the housing market has recovered I am considered “lucky” by others. They are considered “unlucky” because they lost.

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