In Aesop’s original fable the grasshopper spends the entire summer chilling out, while the ant works to store up food for the winter. Long story short, winter comes, the starving grasshopper begs the ant for food, the ant refuses because the grasshopper was lazy, the grasshopper dies, and we all learn about the value of hard work and long-term planning.
That’s the fable. What about the facts? In 2008 the ants got crushed underfoot, as virtually every asset class was torn to shreds. Even the rich ants, who put their money in hedge funds lost an average of 19%.
The grasshoppers? Same as always: they may have spent all of their money, but at least they got to use all of it, when most ants probably lost over 30% of the money they tucked away, if they tucked it away in stocks. Aesop should've accounted for spoilage.
There may be a lot of difference between the grasshoppers and the ants, the irresponsible people and the responsible ones, when it comes to their behavior. But at the end of the day, even the most responsible ant can’t protect himself from an earthquake. We believe we have much more control over our finances than we really do. It’s a pleasant myth, a nice fable.
The truth, as I see it, is that we’re all just a bunch of insects, subject to forces way, way beyond our control
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