Which animal is smarter? It all depends.
Let me explain: In Isaiah Berlin’s famous essay, he divided the world into hedgehogs and foxes, based upon an ancient Greek parable. “The fox knows many things, but the hedgehog knows one big thing.” The fox is a cunning creature, able to devise a myriad of complex strategies for sneak attacks upon the hedgehog. Day in and day out, the fox circles around the hedgehog’s den, waiting for the perfect moment to pounce. Fast, sleek, beautiful, fleet of foot and crafty— The fox looks like the sure winner. The hedgehog, on the other hand, is a dowdier creature, looking like a genetic mix-up between a porcupine and a small armadillo. He waddles along, going about his simple day, searching for lunch and taking care of his home.
The fox waits in cunning silence at the juncture in the trail. The hedgehog, minding his own business, wanders right into the path of the fox. “Aha, I’ve got you now!” thinks the fox. He leaps out, bounding across the ground, lighting fast. The little hedgehog, sensing danger, looks up and thinks, ”Here we go again. Will, he ever learn?” Rolling up into a perfect little ball, the hedgehog becomes a sphere of sharp spikes, pointing outward in all directions. The fox, bounding toward his prey, sees the hedgehog defense and calls off the attack. Retreating back to the forest, the fox begins to calculate a new line of attack. Each day, some version of this battle between the hedgehog and the fox takes place, and despite the greater cunning of the fox, the hedgehog always wins.
Berlin extrapolated from this little parable to divide people into two basic groups: foxes and hedgehogs. Foxes pursue many ends at the same time and see the world in all its complexity. They are “scattered or diffused, moving on many levels,” says Berlin, never integrating their thinking into one overall concept or unifying vision. Hedgehogs, on the other hand, simplify a complex world into a single organizing idea, a fundamental principle or concept that unifies and guides everything. It doesn’t matter how complex the world; a hedgehog reduces all challenges and dilemmas to simple—indeed almost simplistic—hedgehog ideas. For a hedgehog, anything that does not somehow relate to the hedgehog idea holds no relevance.
Doesn’t the fox sound like today’s financial planner or broker? “Fleet of foot, fast, sleek.” Lots of nice suits, fancy offices, intelligent sounding industry terms, investment strategies, market analytics, and pie charts. Shouldn’t you be able to understand completely why your money is going up or going down? Don’t you deserve a simple explanation when you’re losing money instead of platitudes like, “buy and hold.” The market always comes back.” What if you don’t have time for it to come back? When you’re at an age where risk is entirely unacceptable, shouldn’t you have an income plan that is predictable, guaranteed, and simple to understand?
To be clear, hedgehogs are not stupid. Quite the contrary. They understand that the essence of profound insight is, simplicity. There is nothing simpler than an annuity.
1)You fund it.
2) If the market goes up, so does your money. If the market goes down, you lose nothing.
3) Then you, or you and your spouse, get lifetime guaranteed income for as long as you live. No questions asked.
I’ll phrase the question that we started this section with a little differently. Now that you know what you presently are, what do you want to become?