Here’s how investing is similar to gardening
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The pleasures of life can be found in the small things. Gardening is one such pleasure that gives us time to rewind and spend some time away from our screens. It can be a meditative effect and it can teach us a lot of things. Gardening can also teach us a lot of things about investing and in one way, gardening and investing can be the two sides of the same coin.
Here are some of the ways that makes investing and gardening similar:
Many people have the misconception that one needs to have a lot of money before investing. But that’s not true. Even the tallest trees on Earth, the redwood, started its journey from a seed. This shows us the potential of a small seed over the course of time. Similar is the case with saving and investment.
You can start saving by opening a recurring deposit by putting as little as Rs.100 per month. This forms a saving habit and you can start saving a higher amount in the coming days. It can also help you to fulfil your short term financial goals such as saving for a vacation.
If you have long term financial goals, then you can start an systematic investment plan(SIP) in an equity fund. SIP is similar to RD and you can invest a certain sum of money every month in mutual fund. If you want to buy a home or a car, a long term SIP can help you to fulfil these goals.
One of the most important steps in gardening is choosing what you want to grow. It all depends on what kind of person you are. You may want to plant all-season flowers, vegetables, leafy vegetables or air purifying plants. Choosing what kind of plants you want to grow, will determine what kind of seeds you want to get. Similarly, in the investing paradigm, it is important to select the right financial product based on your financial goals and risk. There are different assets that you can select and there are further sub categories of the asset where you can invest. Some of these assets are equity, debt, commodities etc.
If your financial goals are more than seven years way and you can take risk, equity investments can be the right asset for you. On the other hand, if you can’t take risk and your goals are less than five years away, then debt products like debt mutual funds or fixed deposits can help you to reach your financial goals.
Different plants grow well under different soil and sunlight conditions. While indoor plants can survive less natural light, it is not the same for some of the flowering plants. Similarly, succulents and plants from the cactus family can sustain in arid conditions while bamboos need a wet soil. Hence, when you are investing, you need to know whether you want to take the help of an advisor or you want to invest directly. You have to understand where you stand and take the decision accordingly. If you are just starting out, you should take the help of a financial advisor. They will be able to show you the right path and prevent you from making common investing mistakes.
Imagine a garden with just a single type of plant, just a single type of flower. It won’t be a pleasing sight. A garden will look good if it has a variety of flowers and other plants. In investing terms, it can be called as diversification. Diversification means that your investment portfolio is beautifully segregated into different assets and categories. This will reduce the overall risk associated with your portfolio and achieve your goals faster. It is because different assets do not move in a linear fashion and one asset class has the potential to perform well when other asset class is lagging behind in terms of returns.
If there is any important lesson that gardening teaches us, it is patience. After you plant a seed or a bulb, you may not see any action or growth for many months. Even without any signs of growth, the person gardening keeps on nurturing and pays attention. If there is no love and care, the seed won’t be able to germinate. Just like the seed that takes a lot of time to show its growth, investments are also same. During the initial parts of the investing journey, it may feel like that you are not gaining anything out of your investment. But it is not true. All you need is patience and have trust in the process. Keep your eyes on the goal. Sooner or later, you will end up with the fruit in your hand.
Investing is not very different than the other aspects of life. Just like every other aspect of life that requires discipline and focus, investing is also the same. In investing, if the journey is properly planned, then the end goal is within reach.
Tags: investing, garden