Three Financial Lessons From Squirrels

Three Financial Lessons From Squirrels

Protect Your Money / By David Somerville

Over the years, I have been studying wildlife in the woods behind my house.

My favorite critters are the squirrels that scamper and dash among the trees, and I spent a lot of time learning about their habits.

One of the aspects of squirrels that fascinates me is how they make it through winter.   The survival tactics of squirrels have evolved over millennia in the ultimate testing ground of Mother Nature. 

Winter survival is the wildlife equivalent of financial planning for people. Squirrels have to allocate resources, deal with risk/reward scenarios, and execute a plan consistently.

Let’s take a look at how squirrels do “financial planning” and see how we can apply that to our lives.

Three Financial Lessons From Squirrels

1. Stash Stuff Away

Most squirrels prepare for the lean times of winter by stashing away nuts and other food.  This seems like an obvious thing to do and reflects on our need always to be saving as much money as we can for our lean times.

What squirrels have taught me about stashing valuable things away is that there is no perfect plan. 

Some squirrels like the American pine squirrel, create a MASSIVE central food stash called a midden.   .  A midden can have a diameter of 30 feet and be several feet deep.  It takes considerable energy to construct a midden, but the result is enough food to last for many winters. 

This is an “all of the eggs” in a single basket approach to investing that has its obvious drawbacks.  Pine squirrels are highly territorial and have to fight to protect their middens. (midden – refuse heap/large pile)

If the midden is lost then the squirrel can starve.  On the flip side, some Pine squirrels are so successful that they end up leaving the midden to an offspring as a massive inheritance and go create a new midden in a different territory.

Other squirrels, like the grey squirrel, have a highly diversified portfolio.  They will create multiple food staches all across their territory. This approach works out well in case they happen to make a “bad investment” for one particular food stash.  A case in point is this squirrel that filled a car engine with walnuts  He lost that food stash but had more stored elsewhere!

The point is that both types of “squirrel investment plans” have their pros and cons.  What makes both kinds of plans work is that squirrels are consistently stashing and storing.  They find something that works, and they stick to it!

Pick an investment plan, get started, and be consistent.

2. Invest in Yourself

Another way that squirrels prepare for winter is by investing calories in changing their bodies.

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