On Money & More – September 2022

Let’s take a break from all the debate about inflation and recession to provide some real hard hitting investment advice relating to one of history’s greatest storytellers—Aesop. Aesop was born in 620 BC, and storytelling in Ancient Greece was likely not the most lucrative career. But Aesop had a great grasp of at least one fundamental financial concept: income. You might claim that no one has perhaps provided better investment advice regarding income in the past 2600 years. After all, let’s take a look at the storied fable of the Golden Goose below:

There was once a Countryman who possessed the most wonderful Goose you can imagine, for every day when he visited the nest, the Goose had laid a beautiful, glittering, golden egg. The Countryman took the eggs to market and soon began to get rich. But it was not long before he grew impatient with the Goose because she gave him only a single golden egg a day. He was not getting rich fast enough. Then one day, after he had finished counting his money, the idea came to him that he could get all the golden eggs at once by killing the Goose and cutting it open. But when the deed was done, not a single golden egg did he find, and his precious Goose was dead.

Most investors have faced a similar dilemma at some point. Whether you are still building your nest egg (building your golden goose) or you are living off the “golden eggs” from your savings, you are faced with trade-offs. Young savers have to sacrifice spending in order to contribute to their 401(k). This is typically the single best decision they can make to set themselves up for a comfortable retirement. Later in life, savers face other questions. Can I take my dream vacation and still have the funds I need this year? Am I taking too many golden eggs out of my portfolio, or should I take them less often? These are the types of questions that a financial planner (or perhaps Aesop) can help you answer.

This fable also raises many other questions that a financial planner might ask. Should the Countryman have had insurance for the golden goose? How old was the goose? After all, the typically goose lives 10-20 years. How did our friend, the Countryman, acquire this goose? Was he still making payments? The cost of an investment always matters. For example, annuities are often sold to consumers based on a steady stream of “golden eggs,” but the cost to purchase them often makes financial advisors wary of their total worth. While Aesop was absolutely right about his concept about income, (don’t kill your golden goose!), viewing his fable through a modern financial planning perspective might give the story some new depth.

Source: Library of Congress, read.gov

All opinions and data included in this commentary are as of August 10, 2022 and are subject to change without notice. The opinions and views expressed herein are of Cutler Investment Counsel, LLC and are not intended to be a forecast of future events, a guarantee of future results or individual investment advice. Nothing herein should be construed as tax advice. This article is provided for informational purposes only and should not be considered a recommendation or solicitation to purchase or sell securities. This information should not be used as the sole basis to make any investment decision. The statistics have been obtained from sources believed to be reliable, but the accuracy and completeness of this information cannot be guaranteed. Investing involves risk, including the potential loss of principle. Neither Cutler Investment Counsel, LLC nor its information providers are responsible for any damages or losses arising from any use of this information.