Don’t Save it all up for Retirement
Life is meant to be lived now, and in the future.
There is a balance between preparing for retirement and waiting until you reach that point to enjoy life. I used to be out of balance by spending everything I had and more and giving no thought to any time beyond about two weeks out. I have made major adjustments over the years and thankfully, have learned how to prepare for the future. I recently found this story and it has brought a bit of course-correction for me. Just slightly shifting my priorities to a more balanced spot. Saving and preparing for the what lies ahead, but still enjoying and making the most of today.
If you are one of the save-it-all-up-for-retirement types, this may be helpful for you…
An American businessman was standing at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish.
“How long it took you to catch them?” The American asked.
“Only a little while.” The Mexican replied.
“Why don’t you stay out longer and catch more fish?” The American then asked.
“I have enough to support my family’s immediate needs.” The Mexican said.
“But,” The American then asked, “What do you do with the rest of your time?”
The Mexican fisherman said, “I sleep late, fish a little, play with my children, take a siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life, senor.”
The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds you buy a bigger boat, and with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats.”
“Instead of selling your catch to a middleman you would sell directly to the consumers, eventually opening your own can factory. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise.”
The Mexican fisherman asked, “But senor, how long will this all take?”
To which the American replied, “15-20 years.”
“But what then, senor?”
The American laughed and said, “That’s the best part. When the time is right you would announce an IPO (Initial Public Offering) and sell your company stock to the public and become very rich, you would make millions.”
“Millions, senor? Then what?”
The American said slowly, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take a siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos…”
Technorati Tags: mexican fisherman story, save it all for retirement
Filed under Strategies to Save Money by bob
Comments on Don’t Save it all up for Retirement »
Amen, I like the story. I mean it’s important to plan ahead for living many years from now–but we also might die tomorrow. I’m seeking balance…but I haven’t found it yet.
Really good story. I hope you don’t mind if I link to it from my blog.
It is really hard to find that balance. For example, I would love to work fewer hours, but I’m already at the minimum (36/week) to keep my profit sharing, 401k match, health insurance, vacation time, etc. It’s a bit of a catch-22, and I’m not yet sure what the answer is…
That’s a wonderful story. One thing that always nag me is whether or not save too much for retirement. I will have to think about this more. Great story. Great post.
Yeah, that’s a good illustration. I think I saw that in The Four Hour Workweek. That’s kind of one of the main points of that book, the difference between his plan for life and what he calls the “Deferred life plan” (i.e. put your life on hold until you retire). As a Christian, I can say that book definitely has some interesting ideas, but some of the techniques border on deception, so you have to use discernment in reading it.
I terms of how to balance, what I try to do is just do some calculations. When will I retire and for how long? How much money do I expect to need per year? How much do I currently have saved? Based on a conservative return rate and inflation estimate, how much do I need to save per year to make up the difference? I’m not sure if that’s the best way, but it seems reasonable to me.
Also, I try not to get too beholden to my current situation. I’m not saying I’m there, but it’s easy to think, “I’d never find another job that pays this well or has this retirement plan,” or “Once I finish my Master’s degree, then I’ll really live my life.” There are lots of great opportunities out there, and if you really weigh your priorities and opportunity costs, you may find that your current situation is not the best it could be.
@Becky
I don’t mind at all - have at it…
@Pinyo and Mrs. Micah
I agree, it is a tricky balance to figure out…
@Paul
Great comments, I did find it in 4HWW, which I really did enjoy, but you are right, it needs to be read with a filter - Tim isn’t a moral guide…
Most definitely…I think it’s important to live it up on occasion within reason of course. Hoarding money in of itself isn’t the solution to a happy life.
I read this story before and I think it’s right on the money. I almost feel sorry for those who only contribute to a 401k/IRA because it’s locked in until they’re 60ish. I think saving and investing hard during one’s 20s is the way to go. This is early enough for compounds to be substantial due to the large principal. Therefore it affords more leisure time in one’s 30s, 40s, … a time where most people are working like crazy to pay off all the debt they accumulated in their 20s (student) and early 30s (mortgage).
My dad spent probably more money than he should have taking my mom on a bunch of Caribbean cruises… and I remember my siblings and I kind of giving him grief about it. But he kept doing it for about 6 years… the absolutely LOVED those trips. Long story short, mom died suddenly at 58 yrs. old from a pulmonary embolism. Dad has those memories of those trips to hold on to… definitely more valuable than a FAT IRA.
@Dawn
I am sorry to hear that about your mom. My parents were similar to us as your dad was and I really appreciate that they were. Your story is just validation of the point the mexican fisherman was trying to make.
I like this post. I just need a suggestion, I’m 26 years old and I just started my 401K and Roth IRA last year. I’m giving 10% to my 401K and I’m maximizing my Roth… but now I’m starting to feel that I’m putting too much and not seeing my hard earned money and constantly budgeting. Am I doing anything wrong?
@AJ
I remember answering your comment a few weeks ago, it must have gotten swallowed up in the black hole of comments!!
Anyway, I think you are doing great!! If I were in your shoes, I would lock in on and continue what you are doing and as your income starts to increase - start using that increase to enjoy life!!
Assuming you are investing in even decent funds, what you are putting away is going to leave you in good shape when you retire in a few decades.
hope that helps!!