Ants & Grasshoppers – an Aesop’s Financial FableJuly 9th, 2021 by Jim Allen
Aesop was a Greek storyteller who lived 2500 years ago and is known for his “Fables” or short stories that usually have some moral associated with them. While many of what are now considered “Aesop’s Fables” are nothing like what was originally told, the morals behind the stories still have relevance today.
One of the Fables that has a moral relating to money and work is “The Ants & The Grasshopper.” It goes something like this:
One bright fall day, a family of ants were bustling about in the bright sunshine drying out the grain they had gathered all summer, when a starving Grasshopper, his fiddle under his arm, came up and begged for a bite to eat.
“What!” cried the Ants in surprise, haven’t you stored anything away for the winter? What have you been doing all summer? “I didn’t have time to store up any food,” whined the Grasshopper “because I was so busy making music and enjoying the sunshine that before I knew it summer was gone.”
The Ants shrugged their shoulders in disgust and turned their back on the Grasshopper and went back to work. “Making music, were you?” they cried, “there is a time for work and a time for play!”
If looking at this story in the context of saving money, there is some relevance even 2,500 years later. The moral is that the Grasshopper lived for the day and didn’t plan for the future. The Ants, on the other hand, planned for the future but didn’t stop to enjoy the present. During the financial crisis of 2007 to 2009, we saw prime examples of countries that had acted just like the Grasshopper and the Ants. Countries like Greece and Spain had built economies that didn’t have any kind of reserves and needed the booming economy to continue indefinitely. When the financial crisis hit, they had to go hat in hand to Antlike countries, such as Germany or Japan for help. Germany had a strong economy because they focused on savings and fiscal restraint.
We see examples of Ants & Grasshoppers in our firm every day. Some clients are making good money today and enjoy it by traveling and buying “toys” like boats, cars, jewelry and homes. They can afford to live the lifestyle and spend the money as long as it keeps flowing in. Unfortunately, sometimes fall and winter happens to these “Grasshoppers” and the breadwinner gets job eliminated or disabled, and the income is now gone. This is when they wish they had been more like Ants.
On the other hand, we also see “Ant” clients who scrimp and save for that rainy day that never comes. They have deprived themselves of any joy from their hard work because of their fear of not having anything to fall back on in the future.
While clearly, the Grasshopper’s approach is foolhardy and it came back to bite him, the Ant’s approach also isn’t optimal. What if the Ants spend their entire lives collecting all this grain “saving up for a rainy day” and then are eaten by a hungry anteater or bear? All of that work and effort is for naught. “Ant” type personalities should keep in mind another proverb: “All work and no play makes Jack a dull boy.” Our experience is that people who have lived their lives like ants, saving everything for retirement, do not suddenly become Grasshoppers and spend their funds. They have been so ingrained in savings and depriving themselves that they end up having a miserable retirement experience.
So neither the Ant nor the Grasshopper approach is the right one. A blending of the two makes the most sense. So to continue with our insect theme, maybe we should model ourselves after the Spider.
Spiders work very hard weaving their webs, and they are persistent. If the web breaks, they just start building it again. Think of the “itsy bitsy spider” story. So while spiders work diligently, once the web is spun, they can relax and wait to reap the rewards of their hard work. Spiders are also very wise, spinning their webs near places that attract other insects like a light that attracts moths.
So, when it comes to your finances, be neither like the Grasshopper nor the Ant, but more like the smart and diligent spider. At Anchor Bay Capital, we specialize in helping transition to a successful retirement. If you would like to meet with us for a complimentary retirement analysis, please contact us.
Jim Allen, CFP, ChFC, EA, CDFA is President, Sr. Advisor and a Principal at Anchor Bay Capital. In addition to his 30+ years of financial planning experience and his professional credentials, he holds a Master’s Degree in Financial Planning and is a former instructor in the CFP program at the University of California Irvine. He is also the co-author of the book “The Tools & Techniques of Charitable Planning.” Jim can be reached at [email protected]