Invest Like An Ant, Not A Grasshopper

Does anyone remember Aesop’s story of the Ant and the Grasshopper? The Ancient Greek story teller might not have held a Financial Advisor’s licence but he should have. He certainly knew how to tell things as they are.

In his poignant fable, Aesop warned about the need to prepare for the future. The Grasshopper in his tale lounges around in the sunshine, eating and playing music. It even mocked a passing ant for working so hard at dragging food back to its nest.

The ant, as we know, is getting ready for winter. But the grasshopper can’t be bothered to do anything.

When winter comes, the grasshopper is starving. Coming across the ant, the hungry grasshopper asks for food. Remembering the grasshopper’s taunts during the summer, the ant refuses and scurries back to its nest.

The upshot is that it has never been more important than now for us to invest for the future. But this is where I and Aesop part ways. It don’t believe that it is ever too late to invest.

It can be very easy to lull ourselves into a false sense of complacency, especially now, when reported inflation is almost non-existent. Consumer prices are down for the 10th month in a row. But the summer days of low inflation are unlikely to last.

There was a time when a million dollar was considered to be a fortune. But we only have to look at the number of times that billions, if not trillions, are mentioned to realise it isn’t.

Most of us can’t even imagine what a billion dollars looks like, let alone a trillion.

As a nod to Yogi Berra who sadly passed away this week, the former US baseball player was right when he said: “A nickel ain’t worth a dime anymore.

This year as we celebrate the 50th Anniversary of Singapore’s independence, it is perhaps good to remind ourselves that in 1965, the economy of our Garden City was worth around US$975 million. Today it is worth almost US300 billion.

So ask yourself this: Has your personal wealth increased by 300 times over the last 50 years? In other words, have your investments grown at an annual compound rate of 12%?

If not, then why hasn’t it?

Since 2002, the Singapore stock market has returned around 7%, as measured by the SPDR Straits Times Index ETF (SGX: ES3). That should be very least that our money should grow.

But we believe that you could do better. And here at The Motley Fool Singapore, we want to help you invest, better. Start by signing up for Take Stock Singapore here. It’s FREE.

The Motley Fool's purpose is to help the world invest, better. Click here now for your FREE subscription to Take Stock - Singapore, The Motley Fool's free investing newsletter. Written by David Kuo, Take Stock - Singapore tells you exactly what's happening in today's markets, and shows how you can GROW your wealth in the years ahead.

Like us on Facebook to keep up to date with our latest news and articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.