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Of monkeys and retirement

‘Normal’ is often not very efficient and far from optimal – especially when it comes to planning for retirement.

At a training course I attended a few years ago, the course facilitator told us a story that went a little something like this … An experiment was set up by placing five monkeys in a room. In the centre of the room, directly below a trapdoor in the roof, a ladder was placed. The scientists then lowered a banana from the trapdoor in the roof. Immediately, one of the monkeys spotted the banana and headed up the ladder. As soon as this happened, the scientists sprayed all the monkeys with cold water. Needless to say, the monkeys were less than impressed.

A few hours later, a banana was again lowered through the trapdoor, and once again one of the monkeys headed up the ladder to grab it. Once again, all the monkeys were given a dose of ice-cold water. This only needed to be repeated a few more times, because it didn’t take long before some of the monkeys realised how this worked.

The next time a banana was lowered and one of the monkeys started up the ladder, the other monkeys would pull the culprit down and give them a beating. Eventually all of the monkeys knew not to go up the ladder, regardless of how tempting the banana looked. Next, the scientists decided to replace one of the monkeys in the room with a new monkey. Obviously this new monkey had never experienced the cold water phenomenon and so, as soon as the banana was lowered, he headed straight for the ladder. The other monkeys immediately stopped him before he could get there. It didn’t take long for the new monkey to learn that the ladder was not be climbed, even though he had no idea why.

Next, another of the original monkeys was replaced. Like his predecessor before him, when the new monkey saw the banana being lowered, he immediately headed for the ladder. The new monkey was of course stopped and beaten up. But something interesting happened – the first replacement monkey also joined in on the beating. Even though the first replacement monkey had no idea why he was beating up the new monkey, he did it anyway because, clearly, that’s just how things were done around here! And so this new monkey quickly learnt that the ladder was not to be climbed.

The scientists continued replacing the original monkeys with new monkeys, until none of the original monkeys remained. In other words, the experiment reached a point where no monkey in the room had ever been sprayed with cold water (because all of the replacement monkeys were beaten up before they could reach the ladder, and the scientists would only spray the monkeys when one actually climbed the ladder). The monkeys just accepted the fact that if you tried climbing the ladder you got beaten up – even though there was no apparent reason for it.

Worse still, the monkeys also knew that if you saw someone else trying to climb the ladder, you gave them a solid beating. Why? Because that’s just the way things were done.

It’s an interesting story, and there are a few lessons in it. I think the reason it has stuck with me after all these years (unlike a lot of the actual content from the training course) is because I see people acting like the monkeys in the experiment quite often, and it keeps reminding me of this story. But perhaps the most prevalent mindset of “that’s just the way things are done around here” is in the way people approach their working careers and retirement saving.

That’s just the way things are done around here

Society tells you that you start your working career, and you do your 40 hours per week for somewhere around 40 years, and then you get to call it a day. Everyone just seems to accept this. Why? “Because that’s just the way things are done around here.”

As we run on our hamster wheel, we are told to save 10-15% of our income, so that when we stop running at around age 60/65, we should have enough money to see us through our golden years.

Why?

“Because that’s just the way things are done around here”.

There is so much around us telling us that retiring at 55 or older is the only way. I see it all over. I see it in RA products, which lock your money away until you are 55. I see it in legislation that charges higher tax for accessing money before age 551, and I even see it with some of the online retirement calculators.

And so many people continue down the same path that thousands have walked before them, without even blinking an eye. We do not seem to realise that there are a limited number of hours in a day, in a week, in a year, and in a lifetime. Shouldn’t we be spending as many of those hours on only the activities which we find the most interesting, fulfilling and meaningful?

Granted, there are some people who wake up every weekday morning, and for the next 40 years (and probably beyond) would choose nothing else other than to go and do their current job. But these are a very select few. For everyone else, I can’t help but wonder why we are happy to accept a job we don’t necessarily enjoy doing which, for decades of our life, will constrain us in the amount of time and energy we have for other far more meaningful pursuits. Things like family, travel, and learning take a back seat while we grind it out decade after decade to cover our (mostly unnecessary) expenses in the hope that when we retire from our work careers, we will have something that can see us through to our retirement from life.

Why is it that everyone accepts this?

I often find myself questioning norms and conventions, because I have quickly realised that “normal” is often not very efficient and far from optimal. And I think this is especially true of how society views work and retirement.

We need to remember that there are always options.

Sure, nine to five for 40 years is an option, but it is definitely not your only option. No one is forcing you to retire only after you have turned 55 – that choice is in your hands. If you love your job and don’t mind doing it until you are old and grey, that is fine – just make sure that you are doing it because you made a conscious decision to, and not because it is what everyone else is doing.

If becoming financially free at a young age to pursue only the things that give you the most happiness and fulfilment is important to you, then know that you have the power to make it happen. It is possible to create a life of working only on the stuff you want to, when you want to, where you want to and how you want to. You just need to prioritise it above other less meaningful pursuits. Make sure your finances reflect your goals and dreams, and your spending and savings habits are a representation of what is important to you.

You have the power to be better than “that’s just the way things are done around here”. Don’t let society, norms and conventions throw cold water on you as you reach for that banana!

Always question</p

And just in case you needed more proof that you should always question, dig a little deeper, and never accept everything at face value, let me ask you this …

When you read about the story of the monkey experiment at the start of this article, did you believe it was something that actually happened? I certainly believed the story the first time I heard it. But then, while doing the research for this blog post, I found out that no such experiment was ever conducted. Despite numerous people accepting it as fact, the “experiment” is totally made up. So while the story makes for some excellent lessons, it is exactly that – only a story! And that just proves my point – always question!

Finally, let me leave you with this excellent quote by Ellen Goodman.

“Normal is getting dressed in clothes that you buy for work, driving through traffic in a car that you are still paying for, in order to get to a job that you need so you can pay for the clothes, car and the house that you leave empty all day in order to afford to live in it.”

This article was republished with permission from Stealthy Wealth, the original can be found here.

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Excellent article. As usual. But people won’t believe this is possible. Despite the fact that people (like you and me) CAN retire or semi-retire at the age of 40. Or even earlier.

I’ve been writing books for the past few years, after semi-retiring at the age of 40. One of them about this same subject – how to achieve Financial Independence and Retire Early. But people think it’s a scam, an impossible dream.

Don’t let that prevent you from achieving your dream. Or telling others how to do the same thing.

A good article – a pity then that it juxtaposes the importance of family and learning to that of travel, which latter is assiduously peddled by the travel industry and lapped up by simple souls with nothing more intelligent to do.

Dear Stealthy wealth,

Firstly best wishes on your retirement plans by age 45.

While your message is clear and motivational, some objectivity would be pleasant.

If starting to a small business, bear in mind that something like 50-80% fail within their first 5 years. Entrepreneurs will vouch for the time, money and sacrifice to get them up and running. Your 9 to 5 standard job will seem like a dream compared to your 9-9 + weekends to get a business running.

If you going for investment or real estate to generate wealth, you need a bull market… preferably one in early stages. Hard to see that being the case at present. On the other hand you could try shorting in a bear market. Not an easy task either.

Either way, you need the wind at your back or get lucky to be wealthy. Retiring at 45 has a low probability for most. Take action rather no action and you may have a small shot at it.. but don’t raise expectations too high.

The business asset class is just an asset class, usually a very risky and concentrated asset class, and sometimes a very rewarding asset class. But risk, concentration risk and reward should work like that.

you need a bull market – Is that true?
https://www.kitces.com/blog/birth-year-generation-experience-stock-market-investing-baby-boomer-gen-x-millennial-returns/

you need the wind at your back or get lucky to be wealthy – Being thoughtful about lifestyle and spending significantly less than earnings has nothing to do with luck. That is one of the main points about the writer’s whole project let alone this article. The writer is doing all of this deliberately and is not waiting for a lucky event.

If there is bad luck and we have an unprecedented 30 year period of zero returns, the writer can retire at 55 or 60 and people who just followed the 15% savings rate assumption, will starve. How lucky will that be?

The article is asking the reader to check their assumptions and to avoid arbitrary behavior.

In my opinion, there are some monkeys that will still go for the banana even after the cold water soaking! They just don’t think the dousing applies to them!

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