The Fisherman and the Investment Banker

There’s a well-known finance parable that resonates with me each time I read it. A few days ago I came across it again and wanted to share it here. It goes something like this:

An American investment banker was taking a much-needed vacation in a small coastal Mexican village when a small boat with just one fisherman docked. The boat had several large, fresh fish in it.

Impressed by the quality of the fish, the investment banker greeted the fisherman and asked how long it took to catch them.
The fisherman replied, “Only a little while.”

The banker then asked why he didn’t stay out longer and catch more fish.

To which the fisherman responded that he had enough to support his family’s immediate needs.

A bit confused, the banker questioned, “So what do you do with the rest of your time?”

The fisherman answered, “I sleep in, do a little fishing in the morning, play with my children and take a siesta with my wife in the afternoon, then I stroll into the village each evening where I sip wine and play guitar with my friends. I have a full and busy life.”

The investment banker scoffed, “I have an MBA from Harvard and I think I can help you out. If you spent more time fishing you could sell more fish and buy a bigger boat. With a bigger boat, you can sell even more fish and with those proceeds buy several more boats until, eventually, you would have a whole fleet of fishing boats. And instead of selling to a middleman, you could sell directly to the processor and in time open your own cannery. You would control the product, processing, and distribution.”

He then added, “Of course, you would need to leave this small fishing village and move to a bigger market like Mexico City where you could grow your enterprise.”

The fisherman asked, “Ok, but how long will all of this take?”

“Around 15 to 20 years,” said the banker.

“Alright, and then what?” asked the fisherman.

The banker laughed and said, “This is the best part. When the time is right you would announce an IPO and sell your company stock to the public and become extremely rich. You could make millions!”

“Millions?? That sounds nice. But what would I do after that?” inquired the fisherman.

The investment banker responded simply, “Then you retire.”

“You move to a small coastal fishing village where you could sleep in late, play with your kids, take siestas with your wife, and stroll into the village in the evenings where you could sip wine and play guitar with your friends.”

What a great reminder that money itself isn’t the goal—it’s simply a means to an end or a tool to live the life we want.

Morgan Housel has said:

“Happiness is a complicated subject because everyone is different. But if there’s a common denominator in happiness — a universal fuel of joy — it’s that people want to control their lives.

The ability to do what you want, when you want, with who you want, for as long as you want, is priceless. It’s the highest dividend money pays.”

Ironically, in our pursuit of more and more money to gain some freedom over our lives, we end up forfeiting much of that very same freedom along the way.

So rather than working solely to stockpile as much money as possible for retirement, a more beneficial approach might be to work toward an ideal lifestyle.

And like the fisherman, you may find your ideal lifestyle doesn’t require quitting work or accumulating millions of dollars.

“The most dangerous story that’s ever been told is happiness lies just beyond achievement. And you can spend your whole life following that story just to find that there really wasn’t a pot of gold at the end of the rainbow.” — Jack Raines

Thanks for reading!