Planting an orange tree has been an interesting journey since buying our home.

After work, I go out the back to water my orange tree. After an hour or so, I headed inside for the night. I started to ponder how growing and maintaining our orange tree, that will deliver copious amounts of fruit, is analogous to investing our money in the hope of having the benefit of financial freedom in the future.

Here are the four lessons that I learned while growing my orange tree that can be applied to investing

Lesson Number 1: Start Now

We planted our orange tree as soon as we purchased our home. However, orange trees take anywhere from 5-7 years after they are planted, to produce oranges.

They are expected to produce up to 100-300 oranges a year.

So we knew if we did the work now, we would bear the fruits later.
This is so similar to investing, if you start investing now, your investments will grow (thanks to compound interest) over the long term, where you can then enjoy the benefits of your investments.

When investing, it is important to start small, even if you don’t earn very much.

It is crazy how our orange tree really took off. The tree is already over 7 ft thanks to a strong foundation and starting small.

The best time to plant a tree was 20 years ago. The second best time is now
- Chinese Proverb

Lesson Number 2: Don’t Stop - Be Consistent

We watered our tree nearly every week. If you want orange trees to thrive, you need to continue investing in them. Trees need water, nutrients, and even pruning.

In the winter we will prune off any bad growth, or limbs that might impede fruit production. These steps must be taken every year to ensure that we maximise fruit production and ensure the long term durability of our orange trees.

With investments, you also need to contribute every year.

Investing some money in a consistent manner will really help your investments grow that much larger and faster. Add the magic of compound interest to your annual or monthly contributions and you will be much more likely to have a fruitful financial future.

The seed of a bamboo tree is planted, fertilized and watered. Nothing happens for the first year. There’s no sign of growth. Not even a hint. The same thing happens – or doesn’t happen – the second year. The tree is carefully watered and fertilized each year, but nothing shows. No growth. No anything. For eight years it can continue. Eight years! Then – after the eighth year of fertilizing and watering have passed, with nothing to show for it – the bamboo tree suddenly sprouts and grows thirty feet in three months!
–Zig Ziglar

Lesson Number 3: Play The Long Game

It is a struggle to maintain the tree.

From diseases, to bugs that feast on the tree, to even bats & possums who come in and enjoy the fruit before it has ripened, it is sometimes tempting to just rip the tree out and plant something easier to maintain like grass.

Similarly, by tuning in to the 6pm news, you can be made to think that the whole economy is going to collapse.

These finance “experts” tell you that you should move your super monies to cash and sell your investments and keep the cash under the bed.

However, when you plant your tree you do it with the understanding that it will take years before you get to benefit from your work.

It is important to remember before you start investing, that you will participate in the market for an entire investment cycle, including participating through the market lows and the highs.

Just as you never want to jump off a roller coaster until the ride is finished.

Remember back in 2008-09 during the Global Financial Crisis (GFC) when a lot of people cashed out their investments?

They lost copious amounts of money, that’s because they let their emotions get in the way of their investment decisions.

This is one of the reasons why I don’t go grocery shopping when I am hungry. As we tend not to get everything that will support and feed the family for the week, my emotions get the better of me and we end up getting food that will satisfy my hunger.

Remember to be patient, the storm will pass.

Never cut a tree down in the wintertime.
Never make a negative decision in the low time.
Never make your most important decisions when you are in your worst moods.
Wait. Be patient. The storm will pass. The spring will come.
–Robert H. Schuler

Lesson Number 4: Enjoy the Fruits Of Your Labour

Whatever you do, have a reason for it. Our reason for planting the orange tree was to ensure we have a large supply of organic oranges, fresh from our garden, without having to rely on the supply or quality from our local supermarket.

Not just for our family, as we currently produce over 300 oranges a season, but for our friends and family too.

Why do you invest?

Hopefully it’s for the same reasons we planted our tree- to be financially independent, to have freedom, and to give some of it away.

It’s hard work, but once you hit that time of fruit production, enjoy it. You’ve earned it.

The fruit derived from labour is the sweetest of pleasures
–Luc de Clapiers

Questions

So how do you invest?

What is your investment strategy?

Why do you invest?

How do you invest?

What is your investment goal?

What is the time to achieve your investment goal?

How do you measure your investment goal to see if you are on track?

What do you look for in an investment when constructing your portfolio?

Do you have a different investment strategy for your personal investments comparative to your super investments?

Do you need professional, expert advice?

Speak to our Newcastle & Lake Macquarie Financial Planning Advisers who can understand your why and purpose, and help you build your financial roadmap to financial freedom.

What my orange tree taught me about investing