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This short fable of Aesop is a great reminder that money and wealth isn’t everything in life.
Let’s jump right into the story, and we’ll dicuss it afterwards.
The Fable: “A Miser And His Gold”
A Miser had buried his gold in a secret place in his garden.
Every day he went to the spot, dug up the treasure and counted it piece by piece to make sure it was all there.
He made so many trips that a thief, who had been observing him, guessed what it was the Miser had hidden, and one night quietly dug up the treasure and made off with it.
When the Miser discovered his loss, he was overcome with grief and despair.
He groaned and cried and tore his hair.
A passerby heard his cries and asked what had happened. “My gold! O my gold!” cried the Miser, wildly, “someone has robbed me!”
“Your gold! There in that hole? Why did you put it there? Why did you not keep it in the house where you could easily get it when you had to buy things?”
“Buy!” screamed the Miser angrily. “Why, I never touched the gold. I couldn’t think of spending any of it.”
The stranger picked up a large stone and threw it into the hole. “If that is the case,” he said, “cover up that stone. It is worth just as much to you as the treasure you lost!”
How I Relate The Fable To My Own Life
Every day the Miser went to the garden to watch his gold.
He never spent any of it, he just found enormous value in the knowing that the gold was there.
I can relate this a lot to my own life.
While the Miser watches his gold in the garden, I may log into my stock account simply to admire the digital numbers.
I tend to relate some of my happiness level to how the portfolio is performing.
On green days in the stock market I pat myself on the shoulder and think for myself: “Great job!”.
But when it’s bloody red and the stock market is bleeding I often think: “Why didn’t I just pay off the mortgage instead?”
This is perfectly normal according to “Your Money And Your Brain”.
Why human beings do this is because of a cognitive bias called anchoring.
My stock portfolio before the Covid-19 crash was aprox. $315,000. $315,000 was therefore my anchor.
A month later the portfolio dropped down to aprox. $250,000.
I felt bad about this because I’ve already anchored my feelings towards a much larger digital number.
Moral Of The Story And My View On It
The moral of the story is: “A possession is worth no more than the use we make of it.”
That’s true. If the whole point of saving money in my stock account was simply to watch the numbers grow, then that’s just another form of entertainment like Netflix, brewing beer or going out to party.
But in my case I’m not saving up this money to solely watch them grow.
I’m saving and investing so that I can be free from the 9-5.
I want to quit working for others and start working for myself.
Decide how to spend my days exactly like I want.
The money in my stock account will serve this purpose.
When I’ve saved and invested $500,000, I can safely withdraw $20,000 every year for the rest of my life according to the 4%-rule.
Last year I only spent $17,800, and I can’t see any reason to why this year should be more expensive.
So I don’t totally agree with the moral of the story.
I agree that you shouldn’t acquire more wealth solely to have more.
You should acquire enough.
And how easy is it to quit out of the money-making game?
Because as we all know, compound interest makes it easier to acquire more money for every single year passing by.
Don’t Follow The Stock Market Daily
This one-liner from the fable really hit hard: “Every day he went to the spot, dug up the treasure and counted it piece by piece to make sure it was all there.”
It made me think: “Why do I follow the stock market daily?”
I understand traders, they have to get the latest updates and follow the markets daily to perform.
But what about boring index investors like myself?
Do they need to watch CNBC and watch the market daily?
A stock that has an expected ROI of 15 % with a 10 % volatility per year, has a 93 % probability success rate in any given year.— Route 2 FI ? (@Route2FI) July 24, 2019
The success rate is 54 % on any given day.
If you know you're not selling in the next year, then why the heck are you checking your stocks daily?
The quote above is inspired by one of Nassim Taleb’s books in the Incerto-series called “Fooled By Randomness” and his quote goes like this:
“When I see an investor monitoring his portfolio with live prices on his cellular telephone or his PalmPilot, I smile and smile.”
Nassim Talebs point is that following the stock market that closely only steals time from you in the present.
The reason I write this now is because I’ve fooled myself into a bad habit lately with checking the stock prices daily.
I have to get back to the habit of only checking into my stock account once a month!
That’s it for now.
What’s your main take-away from the fable of the Miser and the gold?
Would love to hear from you!
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