I started working full time in the summers at the ripe old age of 15. Believe it or not, I felt pressure from one of my parents to get a summer job.
I already mowed lawns and delivered papers, but I guess that wasn’t enough. With the best intentions, my hard working parent was just trying to instill that same ethic in me. It worked, but let’s leave that topic for a discussion with my psychiatrist. For now, let’s talk about gardening and investment portfolios.
It was an early summer morning back in the late 1970s. I walked across my small rural home town to a fine dining establishment that resided on 15 acres of property. The restaurant was housed in a large home built in 1891. It was surrounded by mature trees, perennial gardens, a pond, rows of flowers planted annually, grass and shrubs.
As I walked, I was nervous. I had never applied for a real job before. The lawn mowing business was inherited from my older brother. I can’t remember how I got the paper route. That day, I put on some halfway decent clothes, but I was still a few years away from suits and ties, that’s for sure. Being a small town, I kind of knew the owner so I walked in and asked to see her. As luck would have it, she was there, we spoke for a few minutes and I walked away with my first real job.
Over the next few years during high school and college, I was a “jack of all trades” at that restaurant. I waited tables, washed dishes, did food prep and organized wedding receptions. However, my favorite job was working on what we called the grounds crew.
As a member of this small grounds crew team, we mowed grass, trimmed the hedges, tended to the pond, planted flowers and weeded the gardens. We made sure the 15-acre property was an asset for the town. And looked great for all the visitors to the restaurant. They enjoyed the view from the restaurant windows and would often walk the property after a nice summer evening dinner.
It is here where I developed an interest in flower gardening. I like natural beauty. It’s also fun and rewarding to see the results of your efforts turn into a pretty area full of plants and flowers that you and others can enjoy year-round. However, a nice garden takes time and attention to start it and keep it looking good. In order to add value to the physical asset.
You must till the soil and provide it with nutrients. After that, you put in different types of plants to keep some blooms going all summer long. For variety, perennials, annuals, shrubs, and decorative flowering trees are planted into an eye-pleasing arrangement.
Over time, however, some plants do not like the environment and die off. Other plants love it and start to spread. Some plants are even invasive looking to choke off anything that gets in the way of their quest for water and nutrients. Some years the weather is perfect for your garden and some years you may experience a flood or drought.
YOUR INVESTMENT PORTFOLIO
I still garden today at my own home. As the years have passed, I keep thinking that gardening is a lot like building and maintaining different components of an investment portfolio. Somehow I see different plants like I see different investments.
Here’s how gardening relates to a few important investment principles:
- Start with soil and nutrients – the extra cash you have saved to start your investment portfolio
- Put in a variety of different plants so you have blooms all summer – make investments in a diverse mix of stocks, bonds and mutual funds for diversification
- Replace the struggling plants – Have a sell strategy when an investment doesn’t work out as you hoped
- Prune back the aggressive plants – Re-balance your portfolio periodically by selling some winners that have taken over and buying some underperformers
- Take extra care of the garden during drought or flood – You must weather bear markets, hold steady and have some cash to make new investments at discount prices
- Enjoy the beauty of what you have created – Watch your money and dividends grow and compound over time