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The Ant and the Grasshopper: Why Both Approaches to Retirement are Dumb

Posted by on Mar 13, 2012 | 7 Comments

Most of us are familiar with Aesop’s fable of the ant and the grasshopper.  An ant spends his summer collecting food and preparing for winter.  A grasshopper spends his summer dancing and singing and makes no preparations.  When winter hits, the ant survives in relative comfort while the grasshopper starves to death.

The moral of the story- ‘To work today is to eat tomorrow.

The Story as an Analogy for Lifestyle and Retirement

I’ve heard this story used as an analogy for our life cycle here in the United States.  Some people diligently prepare for retirement (winter) by spending as much time as possible preparing and hoarding resources.  Build up that 401k.  Buy a house and make sure it’s paid off.  Stay at that job you hate because it has a good pension.  Skip that vacation because it’s too expensive.  These are the ants.

Some people act more like the grasshopper.  They have no regard for the future.  These are the people that completely ignore the inevitability of decline with age, don’t bother with insurance (assuming they’re in a position to afford it but spend money on other things instead), or don’t consider the possibility of unforeseen expenses.  Worse, they may prepare for the future, then piss away their savings in the first year or two of retirement.  There’s a reason the grasshopper died in the story.

The ants trade fun and excitement for the promise of a future that may never come.  What happens if they die at 40?  What happens if the markets collapse and their 401k is worthless or their house value plummets?  What happens if inflation wipes out the value of their savings?  They will have spent their most physically-capable years in misery preparing for a payoff that never happens.

The grasshoppers trade future security for fun and excitement in the present.  This virtually assures a future of misery… unless they can rely on others.  I’m not a fan of being a burden on anyone, whether they are my own children, other family members, my community, or society.

It would seem the best answer would be something in the middle.  Maybe save up for the future, but take the time to go on vacation once in awhile.  Walk that fine line between developing a safety net and living in the present.  Part of this answer may be finding a job you enjoy.  Maybe finding a job that gives you the freedom to take more vacations.  Perhaps it involves something like Dave Ramsey champions- alter the rules of this game to maximize your experience.

A Better Solution

As much as I love Dave’s stuff, it still assumes we only have one game to play- spend your life working until retirement age, then kick back and relax so you can do what you want.  It’s a game so ingrained in our culture we can’t fathom there’s another option.

Jason’s life advice #872: There’s always another option.  And it’s usually better.

In this case, the option involves a plan Tim Ferriss discusses in his book “The 4 Hour Work Week.”  The basic idea is simple- don’t waste your most physically-capable years working to be able to follow your dreams in the twilight of your life.  Design your life in a way that allows you to have fun and do exciting things, but still develop a safety net in case disaster strikes.

This idea requires some reframing of the way we normally think about some things.  For example:

  • Housing: For some reason, we develop a romanticized emotional connection to houses.  This leads us to the “American dream’ of home ownership.  Why?  In some cases, real estate may be a decent investment.  However, it isn’t without risk.  Some buy houses for social approval.  We all need social approval, but we can get through other means.  Instead of owning a fancy house, how about you go on awesome adventures?  Playing a different game means viewing a house for what it really is- shelter.  It protects you from the elements.  Nothing more, nothing less.  When you see it for what it really is, it becomes very easy to save a ton of money by finding the cheapest safe housing available.  Start viewing housing as shelter.
  • Income generation: We need money to do the stuff we want to do.  Traditionally, we like to think of income generation as a job.  In many cases, we want to work for someone else.  In many cases, we end up doing something we really don’t enjoy.  Additionally, we embark on a quest to accumulate as much money as possible, even if we have no need for it.  The idea that you should spend time to earn enough to pay for your adventures and reasonably plan for the future is completely foreign to most Americans.  I routinely get approached by people with various offers to make money.  Some are legitimate; some are stupid.  My response is always the same- I already have enough money.  The response is always met with silence.  People cannot fathom the idea that I would reject the opportunity to make more money.  For me, it’s quite simple.  If the opportunity takes me away from the things I want to do, I have no desire to trade my time for a little extra cash.  Stop chasing more money than you need to survive.
  • Retirement: Don’t think of retirement as a well-needed vacation from the toils of the working world.  By the time you get there, odds are pretty good you’ll be physically incapacitated, have lost your hard-earned savings due to uncontrollable market forces, or dead.  View retirement savings as a backup plan in case something happens that interrupts your income generation capabilities.  Don’t look at that savings as something that will fund your dreams after you reach a certain age.  First, you’ll have already be living your dreams.  Second, your dreams will probably cost a lot more than you expect and you’ll deplete your savings quickly.  Change your perception of retirement.
  • Needs versus wants: Develop the ability to discriminate between needs and wants.  Society tells us we need a lot of things.  In reality, we need very little.  After all, most of the world survives on a fraction of what we have here in the United States.  We’re lucky.  Our decision to get rid of most of our possessions and living in a small trailer with finite weight limits creates a natural regulator for our consumer habits.  If we buy anything, we have to get rid of something.  We’ve become acutely aware of the difference between needs and wants.  We need food, heat, drinkable water, and some clothing.  Everything else is gravy.  We still buy things that aren’t needs, but we recognize it’s a luxury and we’re willing to trade some of our income for the indulgence.  The trick is to develop the skill to resist buying things that are not required for survival.  Identify and control buying things that are clearly “wants.”
  • Live in the moment:  This is a biggie.  Start looking at every day for what it is- a brief moment to do something amazing.  We have a limited number of days.  You will never get today back.  Are you doing something you really want to be doing?  Or are you doing something you do not want to do in exchange for a few extra dollars?  What you do today is entirely up to you.  For Shelly and I, it usually involves running in cool places, going on adventures with our kids, hanging out with our friends, writing, or teaching others about running.  Occasionally we have to do something we really don’t want to do, but we go to great lengths to maximize each and every day.  Learn to live in the moment to make each day worth living.

The New Game

The world is changing.  In the old world, you could go fairly well in school, go to college, get a decent middle management job with enough income to buy a house and maybe a boat, build a 401k, and retire after 30 years or so.  Like the ants, the people that played the game were rewarded with a decent retirement after years of sacrificing for their company. They lived.

That world is quickly disappearing.  First the manufacturing jobs disappeared.  Then the white collar jobs started disappearing.  Wages dropped.  Health insurance dried up.  Pensions were raided.  Markets crashed.  In essence, the food the ant collected started to spoil.  Suddenly the ant was no better off than the grasshopper.  At least the grasshopper had fun.

Some people refuse to see the change that’s happening.  They continue to believe the ant game will protect them.  They continue to trade the present for a promise of a bright future at the end of their lives.  Sadly, these people will be in for a rude awakening.  Not only will the future be grim and they will have little hope for recourse, they traded the best years of their lives for it.

Carefully look at the people around you.  Look at the people that are recently retired or nearing retirement.  See any trends?  It doesn’t take a sociologist or an economist to see where the future is heading.  We spend the majority of our days surrounded by retirees.  I doubt their current existence is what they dreamed about in their mid-thirties.  In conversations, they often say the same thing- they wish they wouldn’t have worked as much and spent more time doing things they enjoyed.  I see a lot of regret.

“If only. Those must be the two saddest words in the world.”  -Mercedes Lackey

I would encourage everyone to carefully examine their life.  Are you living like the ant?  Are you trading the opportunity to do fun and exciting things for a hope of a future payoff?  When you grow older, are yo going to regret that decision?

I’m not suggesting you disregard the lessons from the ant and the grasshopper.  I’m also not suggesting you completely disregard the ant’s preparedness or embrace the grasshopper’s complete disregard for the impending winter.  I’m suggesting you consider the alternatives to what we perceive as the only solution to our lifestyle.

Most importantly, I’m suggesting you seriously consider how you’re going to spend each and every day of your life.  Are you going to maximize today by doing something fun, exciting, or fulfilling, or are you going to be a cog in a giant machine that sucks away your soul in exchange for the promise of a future payoff?

What are your thoughts?  I know many of my readers contemplate this very issue.  I also know many of you have decided to maximize each and every day.  I want you to share your stories.

Please share this post with your friends or family that are letting life pass them by.  ;-)

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7 Comments

  1. Jan
    March 14, 2012

    A timely post Jason! I am booked in to attend a retirement seminar tomorrow morning and had just been looking at how much supa I have accumulated :-D

    I was the classic “Ant” in my 20′s/30′s..it was all about mortgage reduction..save save save (apart from a sanity saving weakness for shiny new, very fast motorbikes ;-)

    Around 40 I started to “get a life” and started working part time in the job I have been in now for 30 years.. fortunately, for the most part, i have enjoyed this job very much.
    I LOVE my property, it gives me great joy and peace every day so i can’t see it as “just shelter” though.
    The house itself which I helped build, the views, the wildlife, the community, how great it is for training, my animals around me.. no, its more than shelter alone to me.

    My job however..I learnt only after 40 that i needed to LIVE more, plan/work/save less..to find the balance of providing for my own future without missing out on the stuff I wanted to do while I was still physically capable of it
    .
    Of late, I sense I need more and more of MY kinda stuff… less money, more of what makes my heart and soul sing..adventures, travel, being home enjoying the country life, hanging with my man, helping people find health and fitness and their own adventures!
    I know what I have to do. Its been building for 5 years..its not far away now. Your post has further strengthened that. I hope I haven’t left it too late to do the things I really want to do..I dont think i have. Thanks Jason. I’ll let ya know in a couple of years ;-)

  2. Luther Kibble III
    March 14, 2012

    Brilliant post. Preach.

    This is my first time visiting this website, and now I’m very happy that I stumbled upon it.

    I agree with this post fully. It’s awesome to know that I was not the only person on this planet with the opinion(s) expressed in this article.

    I will be sharing this post with others immediately (on Facebook), and on my blog (once I get it in full swing.)

  3. Jason Cunningham
    March 13, 2012

    Nice post, Jason. Definitely gives me food for thought. Thank you.

  4. Barefoot Running University » The Ant and the Grasshopper: Why … | Money Day Dreams
    March 13, 2012

    [...] Barefoot Running University » The Ant and the Grasshopper: Why … This entry was posted in Uncategorized and tagged american, king, life, markets, people, platform, retirement, united by admin. Bookmark the permalink. [...]

  5. Trish Reeves
    March 13, 2012

    This is brilliant, as usual. Just one more small push towards the realization that Shawn and I are making the right choices in changing our lives.

    Again, thanks.

  6. Suzanne
    March 13, 2012

    Bravo, Jason. Well said. I am not an ant. Nor am I a grasshopper. I’m not sure what I am, but this piece reminds me that that’s just fine. So thanks for that.

    If I may add something…living in the moment is not easy, and it’s something I’ve tried hard to do all my life. Therefore I consider myself an expert (or at least capable of playing one on TV). It took me a few years to articulate what it takes to do so, and as a philosophy it’s still a work-in-progress, but I’ve found it may possibly include the following:
    Self confidence-don’t let others impose their expectations on you.
    Serenity-a reminder that you are happy with your own choices…because they ARE your choices.
    Humor-nothing keeps you in the present quite like laughter.
    Wisdom (or, of that one’s lacking, stubbornness is a decent substitution)
    Trust your instincts-if you quiet all the unhelpful voices in your head, it’s surprising how smart your gut can be.

    So that’s my two cents, adjusted for inflation.
    -Z

  7. Russ
    March 13, 2012

    Looking at a house simply as shelter is the smartest thing I’ve heard (or read, in this case) all day. I’ve tried to explain that same sentiment to people many times but would basically just end up repeating something like: “it’s just stuff!” And not really getting my point across. That is a great, simple way to explain it. Thanks!