Money lessons From a Gardener

At the risk of sounding overly philosophical, I’d say that gardening has taught me a lot about money and investing. I wasn’t always a gardener. Growing up, my father did not let us play on the lawn because he was so meticulous about maintaining it. So the gene of gardening was there but was mostly dormant until my wife gave it a spark. I should also say that my first exposure to stocks was also through my dad. From visits to his stock broker’s office to place buy and sell orders, opening mail and finding dividend checks to actually going into the bank and depositing those checks. He had me do it all. I remember flipping through some of the most colorful booklets my dad got once a year, which were actually annual reports of stocks he owned.

The world has come a long way from snail mail dividend checks and annual reports. The fundamentals of investing have not changed though. Neither have fundamentals of gardening. Plants still need the same favorable environments and TLC if they are to thrive. I often ponder similarities between the two when I’m sitting on the ground mindlessly pulling weeds from my garden. I figured it would make a decent read so here goes.

Weeds and bad money habits don’t need cultivating –

Anything worth growing in a garden invariably takes effort. Weeds however, are uninvited guests that invariably show up every spring .That is a guarantee you can take to the bank. If you are to have a beautiful garden, you need to constantly weed. You can spray chemicals to kill them, or cover it up with mulch but a successful gardener knows that nothing works like getting on your hands and knees and pulling them by hand.

Bad money habits are no different. That Pizza Hut commercial on TV, the Lexus ad on your Facebook feed or that billboard by the freeway are all meant to create the motivation for bad money decisions to happen. While you cannot take down the billboard (just as you cannot prevent spring from creating the ideal environment for weeds to grow), you can constantly work on identifying and eliminating bad money habits. Impulse purchases that aren’t part of your budget, eating out when you haven’t planned for it or sacrificing your savings targets for frivolous products that claim to be innovative are all habits that are like weeds.

I have to admit that over the years, I have always struggled to stick to my restaurant budget. I love to eat and eat out a lot. Over the years, I’ve developed an immense liking for cooking and it helps me recognize the effort it takes and appreciate it more. No-one is perfect but if you actively recognize and acknowledge when you slip, you can do something about it.

Gardening or Investing – Patience is not negotiable

Whether you’re growing onions, saving for a car or investing for retirement. Patience is a precondition. I remember when I first started gardening, I loved buying big plants. Something that would instantly transform the landscape. Obviously, the bigger plants were more expensive and required more effort to plant (since they needed a bigger hole in the ground). But I liked the fact that they would create a big impact instantly.

As I became a more experienced gardener, I took a deeper liking to smaller plants. Plants that would be cheap to buy and easy to plant. I also realized that tending to them and watching them grow stronger every year gave me immense happiness and satisfaction. This feeling never came with plants where someone else had already done the hard work. As a bonus, buying the smaller plant and letting it grow allowed it to naturalize much better and it was stronger by the time it was the same size.

Money and investing work the same way. When you take the time to learn the fundamentals, the returns bring you more joy. When you deliberately command your money to do what you need it to do rather than letting impulse take over, you know exactly what drove your success. And when you participate in the slow, but consistent growth of your investments and net worth, you will find tremendous satisfaction in that growth. Ultimately, you will feel like you’ve really worked for that money and value it more. If you purchased an ‘investment’ (like Dogecoin) because everyone was buying it and got lucky, that ‘easy’ money will be spent on frivolous things that won’t bring you much in the way of long term satisfaction.

Learn BEFORE you buy

Whether you’re buying a plant or an investment. Do your research. If you don’t understand it, don’t buy it. Does the plant fit your soil type and weather? Will it fit well in your landscape and vision? Why do you want to buy into an investment? Do you want exposure to a specific segment or industry? Are you looking for dividends or appreciation? Is it a hedge against other riskier investments? These are all questions you need to ask yourself before you buy. Answering these questions means learning about you, your portfolio and your risk tolerance.

If you develop a solid understanding of these things, you have what you can call an investing strategy and that will become the inspiration of your money garden and help you develop a green thumb (gardening and money wise). If you plant random shrubs and flowers without considering the overall look you’re going for in your garden based on light, soil and compatibility requirements, the garden may do fine for a year or two but you’ve really not given it the best chance to succeed long term. This part, I learned from my wife.

The work never stops

Whether a garden or money management. If you stop working on it, before you know it, the weeds will take over. You constantly have to work on learning and improving. If you want to enjoy the beauty of the garden, you have to put in the work. Not when it is convenient. Not when the weather is nice. All the time.

Here in Seattle, where I live, if you want to enjoy the tulips in the spring, you have to be out there in the rainy fall digging and planting bulbs. If you want to be successful on the money front, you have to make the tough decisions when it is most inconvenient. Be patient when others are panicking and vice versa if you’ve done your homework. Say no to that new dress or the nice shoes even though they’re on sale. Have the difficult internal dialogue to differentiate needs vs. wants. Get your priorities straight and stick to your budget when it is most difficult. Only then are you going to actually enjoy what most people only hope to.

Mistakes always teach you more than successes

I recently killed an indoor palm tree that I absolutely loved. My wife found the tree at Home Depot. Someone had knocked it off the rack and broken its pot. She asked the lady at checkout if they would give it to us at a steep discount since we wanted to try to save it. We brought it home, repotted it and put it in our living room. It was beautiful.

After a year or so, I started noticing that some of the older leaves were dying faster than the new leaves were coming in. This got me worried so I started giving it a little extra water since I thought the dry heat from the furnace in the winter was drying out the soil too fast. The leaves started dying faster. I gave it more water. Eventually, one day the plant collapsed. When we tried to repot it, I realized the extra water had caused it to rot and die. A little self reflection made me realize that a palm tree survives in the most arid climates. I don’t know why it would need more water, but hind sight is 20/20.

You will make money and investing mistakes and that is ok. What is important, is to learn from them. Do not repeat the same mistakes, and honestly, if you recognize and acknowledge them when they happen, you won’t. I’ve invested in stocks during IPO frenzies and lost money. I’ve come to realize that I do much better when I’ve had time to digest the performance and data of stocks before I invest. I miss out on some potential IPO gains at times, but I am ok with that. I am happy with my investing performance based on my risk tolerance. It takes a lot of discipline and restraint. But when you’ve been burned and acknowledged your error in judgement, it becomes easier.

Finally, sometimes, you can do it all right and still fail. That is ok. At the end of the day, if you did everything you were supposed to, no harm, no foul. You can’t control the weather. An overly wet spring will invariably ruin tomato yields but not much you can do about it. Sometimes, you just have to acknowledge bad luck and move on.

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