The Chinese New Year tale tells of an emperor who organised a legendary race across a fast-flowing river, inviting all the animals of the land to compete. The first 12 to cross the finish line would earn a place in the zodiac, which is used to symbolise the human calendar.
Each of the 12 winning animals used their unique skills and character traits to navigate the challenges of the river – sometimes even helping one another along the way.
2025 is the year of the snake and with 29 January marking Chinese New Year, there’s no better time to explore the zodiac animals and uncover the wealth management lessons inspired by their archetypal and mythological behaviours.
Read on to discover three financial planning insights you can learn from the animals of the Chinese New Year calendar.
1. Like the rat, trusting in the strength, dependability, and resilience of the ox could get you far
In the myth, the ox would have won the race were it not for the cunning rat, who cleverly climbed onto his back to cross the river and then leaped ahead at the last moment to claim first place.
Like the ox’s steady progress, the market typically demonstrates consistent growth over time, even if short-term fluctuations occur. The rat’s resourcefulness in recognising the strength and resilience of the ox mirrors the importance of trusting in long-term market trends.
For example, Schroders researched the potential long-term cost of exiting the market during historical downturns.
The study found that investors who moved into cash after the initial 25% decline during the Great Depression in 1929 faced a significantly prolonged recovery period. They would have had to wait until 1963 to break even through cash returns alone. By contrast, those who stayed invested regained their losses by 1945, an impressive 18 years earlier.
A similar pattern emerged during the 2008 financial crisis. Investors who shifted to cash after the first 25% drop would still not have fully recovered their losses today. Meanwhile, those who remained invested saw their portfolios bounce back around 2013, which speaks to the long-term advantages of staying the course during market downturns.
So, being like the rat, and having faith in the dependability of the market and its habit of demonstrating resilience over long time horizons, would historically have served you better than jumping ship, even amid significant crises.
2. Find strength in diversity like the goat, monkey, and rooster
In one particularly heartwarming version of the story, the goat, the monkey, and the rooster arrive at the finish line together on a raft. They explain to the emperor how the rooster found the raft and allowed the other two to join, and how they then pushed the raft and cleared the weeds to help it get to shore.
The teamwork demonstrated by the animals here is reminiscent of the value of having a diversified portfolio in your financial plan.
Just as the goat, monkey, and rooster combined their unique skills to reach the finish line together, a diversified portfolio harnesses a mix of assets spread across regions and sectors to help you achieve stability and growth.
If your portfolio is overly concentrated and your investments experience a downturn, you will feel the impact of the losses more. Relying heavily on a single asset, sector, or market exposes your finances to heightened risk.
Moreover, by diversifying, you not only reduce the likelihood of one underperforming investment dragging down your entire portfolio, but you also open yourself up to capturing wider returns.
This balanced approach could smooth out returns over time, paving the way for more stable, long-term growth, even in the face of market volatility.
Much like the teamwork of the monkey, rooster, and goat in the Chinese zodiac story, a diversified portfolio ensures your investments work together, each playing a unique role in helping you reach your financial goals.
3. Be like the pig and enjoy the ride
The 12th and final animal to reach the other side of the river in the story is the pig.
Of course, the pig deserves credit for making it into the top 12, but his laziness and indulgence slowed him down – after stopping for a hearty meal before swimming, he couldn’t resist taking a nap afterward, which ultimately landed him in last place.
While being idle and greedy is never advisable, the pig certainly knew how to enjoy himself.
When it comes to financial planning, taking a leaf out of the pig’s book can serve as a reminder that enjoying the fruits of your labour is an essential part of the process. While diligence and discipline are crucial for building wealth, allowing yourself to indulge responsibly ensures that your financial journey is fulfilling along the way, and not solely focused on long-term, distant goals.
A well-rounded financial plan isn’t just about reaching the finishing line, it’s about savouring the ride. This may mean going on an extra holiday next year, taking your family out more, or buying that luxury item you didn’t think you’d have the money for.
So, while it’s important to stay focused and avoid overindulgence, taking time to enjoy life along the way – just as the pig did – can make the journey both rewarding and sustainable.
Get in touch
To find out more about how a financial planner can help you get to the other side of the proverbial river, get in touch.
Email info@blueskyifas.co.uk or call us on 01189 876655.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.