Can You Solve the Riddle of the Fishing Rods?
Three fishermen, three rods, three price tags, but only one answer. Go on, take the bait.
*Ding*. The bell rings above the door of Hartley’s Fly Fishing Supplies. Three men enter, all equally determined to win this year’s Lower Kimbleton angling tournament. The first, Andrew, makes a beeline for the most expensive rod on display, buys it and walks out again, brimming with confidence. The second, Brian, chooses a slightly cheaper rod, but to gain an edge over Andrew he also buys a book: Teach Yourself Fishing. He goes home, fully expecting to win the big cash prize.
Craig, the third man, spends more time in the shop. He knows he’s no fishing expert, so eventually he asks the man behind the counter to recommend a rod. Old James Hartley peers over his spectacles and asks Craig some questions: where is he fishing? What kind of fish is he after? How much experience does he have? Eventually the shopkeeper reaches into a corner that neither Andrew nor Brian noticed, to offer Craig a very different rod, plus a selection of the best lures and a few tips on how to use them. Meanwhile Craig spies a sign by the counter: Fishing taught here.
After buying his rod, lures and his course of five fishing lessons, Craig ends up spending slightly more than Andrew or Brian. But the riddle is: which man spent the least?
The answer is Craig, of course.
Craig ended up spending the least overall because he won the Lower Kimbleton angling tournament, nabbing a cash prize that more than paid for the rod, lures and lessons, plus a round of drinks to console his runner-up friends. Not such a difficult riddle, was it?
As our fishermen found out, the true cost of something isn’t always on the price tag. Craig won because of the advice he received, so the true price he paid was actually negative: he made an overall profit. The same principle applies to the cost of financial advice.
Coincidentally, Craig has also been consulting a financial adviser about boosting his pension for when he retires in 10 years’ time. He paid around £1,000 for advice on transferring a £40,000 pension with guaranteed annuity rates, but expects to benefit by more than this amount in the first year of his retirement alone. He’s right – those who take independent advice a decade before they retire gain on average an additional income of £3,654 every year of their retirement*.
Would you let a catch like that get away?
If you would like to talk about your financial planning needs or need more general help with your finances, please get in touch with us
This article first appeared on Unbiased.
*Value of Advice report by Unbiased.co.uk and AXA Life Invest
NorthStar Insights
Stay right up-to-date with the latest financial news, get expert insight and analysis and exclusive special offers to help you make the most of your money.
NorthStar Insights is the free email newsletter enjoyed by over 3,000 people across the UK. Subscribe now to never miss another update.
Latest Articles
New Report Shows Britain May Be Heading for a Retirement Crisis
Financial New Year’s Resolutions That Stick: Turning Goals into Habits
Ten Timeless Financial Lessons from Classic Christmas Stories
Preparing for Parenthood: Ten Essential Steps to Get Your Finances Ready for Having a Baby
Become a Financial Grandmaster: What Chess Can Teach Us About Money Management
Budget 2024 Summary: Everything You Need to Know
Twelve Money Mistakes to Avoid Before Buying a Home
Talk Money Week 2024 – We’re Proud to Be Supporting This Nationwide Initiative to Get People Talking About Money
Stay Ahead of Scammers: Your Essential Guide to Avoid Becoming a Victim of Financial Fraud
Six Top Tips to Be a Successful Investor
A Dozen Essential Finance Lessons to Teach Your Teenager
Don’t Miss the Deadline to Increase Your State Pension by up to £60,000
How The General Election Result Could Affect Your Finances
Intergenerational Wealth Planning – Your Options to Pass on Wealth to the Next Generation
Mastering FIRE: Unveiling the Path to Financial Independence and Early Retirement
Disclaimer
The content of this article is for information purposes only and does not constitute a personal financial recommendation. You should always speak to a regulated financial planner before taking financial advice. This article is intended for UK residents only. All information correct at time of publication.
Tag Cloud
Awards, Accreditations & Trade Associations
NorthStar is proud to be a member of the leading financial planning trade associations. Through a continued commitment to adhere to the highest professional standards and deliver exceptional service, NorthStar has received a number of awards and professional accreditations.