The Most Authentic Guide on Personal Finance and Investments


(Funny) Words of Wisdom : "Someone stole all my credit cards, but I won't be reporting it. The thief spends less than my wife did." ~ Henny Youngman

The Ant (Saver) And The Grasshopper (Spender) Fable

I am sure you have heard the story of 'The Ant and The Grasshopper'; and narrated the same to your kids too.

Just to recap:

One fine summer’s day, in a field, a Grasshopper was hopping about, chirping and singing to its heart's content. An Ant passed by, bearing along with great effort an ear of corn he was taking to his nest.

"Why don’t you come and play and sing with me," asked the Grasshopper, "instead of toiling your life away?"

"I am storing up food for the winter," said the Ant, "and I suggest you to do the same."

"Why bother about winter now? We have got plenty of food at present and the winter is still many months away." said the Grasshopper and continued to sing and play.

But the Ant went on its way and continued its toil.

When winter came, the weather turned cold and field was covered with a thick white blanket of snow. The Grasshopper could not find anything to eat and soon found itself dying of hunger. The Ant, on the other hand, had lots of corn to eat that it had collected during summer.

Then the Grasshopper knew...

Believe me, this doesn't happen only in the stories!

I know of many real-life instances where people, who did not plan their finances properly during their youth, are now struggling to survive in their old age.

save-vs-spend-balance
Strike the RIGHT balance between 'Saving' and 'Spending'.

It is an indisputable fact that we will someday need lots of money for buying a house and educating our kids. Even if we have no such requirements, we will surely need lots of money for our retirement and medical treatment. If we have no source of income, meeting these expenses will be impossible. Even if we have some inflows, the amounts required will be so large that paying these bills will be a challenge.

Therefore, like the Ant above, we have build a suitable corpus... based on our needs, desires and aspirations. Else, we will have to suffer like the Grasshopper.

Of course, merely saving for the future is not the right approach. The present is also important. We have to enjoy the today too. As the saying goes 'All work and no play, makes Jack a dull boy'. We would die of work and depression, if we do not take time out for fun and recreation. We too have to replenish and recharge our batteries. We have to spend money on enjoyment too!

Sure, too much of Spending is 'financially' bad. But, too much of Saving is also bad.

To be both financially happy and financially secure, we have to strike the "right" balance between 'Saving' and 'Spending'.

In other words, we have to be both the Ant and the Grasshopper i.e. become an Anthopper.

But one word of caution:

I have deliberately used the word "Anthopper" and not "GrassAnt".

What this means is that you have to first save a certain portion of your income; and then use the balance for spending.

Most people do exactly the opposite: They first spend to their heart's content; and then the leftover, IF ANY, is saved. For them

Income - Expenses = Savings

This formula NEVER works. Our desires are unlimited. Whereas, the income is always a constraint. Hence, GrassAnts will always fail as did the Grasshopper.

Therefore, you have to follow a different formula:

Income - Savings = Expenses

This is one change that you MUST bring about in your day-to-day money matters.

Do this and you will see an unbelievable change in your financial status. This new formula will work like magic.

Hope to see you become an Anthopper... soon. Time is short and we have a steep hill to climb.

You Learn A Lot By READING... And Even More By SHARING.

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