The Mexican Fisherman and the Investment Banker

The Mexican fisherman and the investment banker story is one of the most iconic stories in the personal finance realm. It generally teaches you what your priorities should be in life. Whether you should value material things or free time.

The Mexican fisherman and the investment banker have very different philosophies and approach to life and work. The story shifted my perspective of financial independence and retire early movement. Not to the point where I wanted to give up the movement.

But to the point where I should not be obsessed with early retirement and working as hard as I can to get there. Work ethic is a good personal characteristic to have, but there are costs related to that. It’s not all gravy that you enjoy. There are downsides and negatives to it as well.

The Mexican Fisherman and the Investment Banker

The Mexican fisherman and the investment banker story goes like this.

A doctor told an American investment banker that he was too stressed out for his health. That he needs to take a vacation to recharge his body. The investment banker said OK and took paid time off to go on vacation. He ended up at the pier of a small coastal Mexican village.

While walking around at the pier, a small boat with a Mexican fisherman in the boat docked. Inside the boat, there were several large, freshly caught fish that the fisherman finished fishing for for the day. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican fisherman replied, “only a little while”. The investment banker then asked, “why don’t you stay out longer and catch more fish”? The Mexican said he had enough to support his family’s immediate needs. The American then asked, “but what do you do with the rest of your time?”

The Mexican fisherman replied, “I sleep late, fish a little, play with my children, take siestas with my wife Sofia, and stroll into the village each evening where I sip wine, and play guitar with my amigos.  I have a full and busy life.”

The American investment banker scoffed, “I am a Harvard MBA graduate and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the additional proceeds from the bigger boat, you could buy several boats. After a while you would have a fleet of fishing boats. Instead of selling your fish to a middleman you would sell directly to the processor, and eventually open your own cannery. You would control the product, processing, and distribution”.

He went on to say, “You would need to leave this small coastal fishing village and move to Mexico City, then LA, and eventually New York City, where you will run your expanding enterprise.”

The Mexican fisherman asked, “But, how long will this all take?”

To which the American replied, “about 15 – 20 years.”

“But what then?” Asked the Mexican fisherman.

The American laughed and said, “That’s the best part.  When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions!”

“Wow, millions, señor? Then what?” The Mexican fisherman replied.

The investment banker said, “Then you would retire.  Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife Sofia, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

D’oh

– Mexican Fisherman

What Can You Learn from The Mexican Fisherman and the Investment Banker?

The things you can learn from the Mexican fisherman and the investment banker story are practical. It can apply to your life in many ways.

1) Life is More Important than Money

Whether you enjoy life by sleeping late or playing with your children, it doesn’t matter whether you are rich or poor. Having additional money doesn’t change the quality of your free time that you were already going to spend on anyway. So then, instead of waiting 15 – 20 years to enjoy life, why not enjoy it today?

That’s where the financial independence movement comes in. Plenty of people achieved partial FIRE. Enough to live on with just a little bit of money rolling in. They either negotiate for reduced hours in exchange for reduced pay or take a lower paying and lower stress job. Then they are coasting through life with little stress.

Life is more important than money. Working hard and breaking your back can be a good trait. However, don’t let that make you from losing focus on what you’re working towards. If you already have the life that you want now, why try to change it? This story made me never want to start a business to make a lot of money.

I don’t want to manage people, work my fingers to the bone for decades, and service customers. It made me realize that I would much prefer a lifestyle business.

2) Money is Good but You Have to Sacrifice Your Life For It

Unless you were born into a rich family or have a lot of money already, you have to trade time for money. Whether you have a business or working a job, you have to sacrifice a part of your life for it. It’s up to you to figure out if you are willing to go through with that.

You may decide to temporarily sacrifice a part of your life for it. That is completely fine. That is the whole idea behind the Financial Independence, Retire Early movement. It’s not a bad thing by any means. However, at some point, you have to realize what the important things in life are.

There are some things that are more important than money. Your time, health, and life is worth much more. If I had to prioritize money, it would be third on my life. The first would be my health and the second would be my family. Chasing and going after money is good.

However, it’s only third in the list of good things to pursue in your limited time on Earth.

3) People’s Goals are Different

If the Mexican fisherman and the investment banker story taught you anything, it’s that everyone has different life goals. Some people’s biggest goal in life is to make a lot of money. Other people’s goals are to just live life happily and let things turn out the way it’s supposed to.

Whatever your life goals are, make sure that you consider the positives and negatives of it. That you will be happy with both the negatives and positives by the end. The sacrifices you will be making and the rewards you will be enjoying. Consider both sides of the coin.

There is no one size fits all goal on Earth. That would be impossible. There is a group of people who have similar interests, but everyone’s goals are slightly different in one way or another. Make sure to consider both perspectives of a goal you want to achieve. So that you can make a choice for yourself by the end that you will be happy with.

Don’t Focus So Much on Money That You Forget to Live

Life is more important than money. There’s no judgement in being the investment banker in the story of trying to make the most amount of money possible. However, don’t forget to live throughout the journey. We only have a limited amount of time on Earth for.

You can always make more money. The ability and the potential to make more is there. However, you can never get back your time and life. One is a renewable resource while the other is nonrenewable. Which would you have rather focused on by the end of your life?

Working on and focusing on money is not a bad thing. However, make sure that it’s only a temporary goal. Do you think Jeff Bezos knows what to do with the money that he has? No way he does. He has more money than he can spend in his entire life. Money is boring to him.

When you have a lot of money, then you get to realize what the most important things in your life are. The money will become old and irrelevant. Your family, friends, and the ones who supported you through thick and thin will always be relevant in your life.

Use The Mexican Fisherman and the Investment Banker Story in Your Life

The Mexican fisherman practices simple living and enjoys the simple things in life. The investment banker practices complexity and prefers to work as hard as he can so he can retire. Neither route is better than the other on a temporary basis. However, on a long-term basis, the Mexican fisherman’s version is better.

Use the Mexican fisherman and the investment banker story in your life. Have you been neglecting your loved ones recently in pursuit of profit? Are you devoting too much of your time and attention to acquiring that extra dollar? Some days, I know that I am and I recognize that.

The story helped me realize when I’m focusing too much of my attention to one area. I never want to neglect the important people in my life. All the money in the world means nothing if I have no one to share it with. My family is important to me and they matter to me.

Financial independence is great. Early retirement is great. Don’t ever go overboard in trying to save a year of your FIRE journey that you lose the decades of years invested into your relationships. Your one life is too precious to waste it all on money obsession.