There are no hidden meanings behind an Aesop’s fable. The moral of each story is so easy to comprehend, that they are commonly used to teach children life lessons.
However, Aesop didn’t write these fables 2,600 years ago for just children, he wrote them for everyone. The young and the old, the rich and the poor, men and women, can all learn a lot from reading just one fable.
The moral of just fable can be applied to many areas of our lives. For me, I found that many of Aesop’s fables could be easily tied into personal finance.
Below are five of Aesop’s fables, followed by a lesson in personal finance.
Fable # 1: The Ant and the Grasshopper
Moral: It is best to prepare for the days of necessity.
Personal Finance Lesson: No matter your present financial situation, you need an emergency fund. Your “winter” will be in the form of a job loss, medical emergency, or a home repair. Plan for these emergencies today by saving at least 3 months worth of expenses.
Fable # 2: The Ass, The Cock, and The Lion
Moral: False confidence often leads into danger.
Personal Finance Lesson: Overconfidence might lead you to believe you can select individual stocks to beat the market. Looking at the facts, chances of beating the market year in and year out are slim to none. Your greatest chance of success is by investing passively into index funds.
Fable # 3: The Cage Bird and The Bat
Moral: Precautions are useless after the crisis.
Personal Finance Lesson: It’s best to know your risk tolerance before you begin investing. One of the biggest mistakes investors make is pulling their money out of the market and into cash after the market goes down. Then waiting to after the market has already gone back up to get back in.
Fable # 4: The Hare and the Tortoise
Moral: Slow but steady wins the race.
Personal Finance Lesson: You don’t get rich overnight. You get rich by spending less than you earn month after month.
Fable # 5: The Miser and His Gold
Moral: Wealth unused might as well not exist.
Personal Finance Lesson: Personal finance isn’t about accumulating the most money. Personal finance is more about using your money in the most efficient way to get the most out of life.
Aesop managed to write hundreds of fables during his lifetime. I applied these morals to personal finance.
What other areas in your life can you apply one of the morals above?