Episode 99: Investing is Like Gardening — So Let it Grow

Transcript

Hello everyone, and welcome to the Balanced Wealth podcast.

My name is Jarrett Topel.

For any of you that meet with me on a regular basis, you likely know that I am somewhat of a metaphor and analogy freak.

I find metaphors and analogies super helpful in explaining ideas that many people find a bit esoteric, such as the markets and investing, by helping to put it in terms more people can truly understand and relate to.

So, as the weather turns warm and people head into their gardens, here is one more that I hope you find enlightening and useful.

At that is, “Investing is like Gardening”.

With the title of today’s podcast being, “Investing Is Like Gardening — So, Let It Grow.”

Because some of the best lessons in personal finance come not from Wall Street… but from the backyard.

So, let’s think about gardening for a moment.

You prepare the soil. You plant your seeds. You water and you wait.

You don’t pull your carrots out of the ground every day to check on them.

And you don’t panic every time it rains.

You trust the process.

And, investing, when done right, works the exact same way.

Good gardening starts with the right foundation: soil, sun, spacing.

You plant based on the seasons and your desired harvest, not the headlines.

Investing is no different.

You don’t plant all your financial “seeds” in one place.

You spread them out — U.S. stocks, international stocks, bonds, maybe even a bit of real estate or cash — depending on your goals.

And just like certain crops take longer to mature, certain investments take longer to pay off as well.

But time, not timing, is what makes them grow.

In gardening, just as in investing, not every season is perfect

Sometimes the frost comes early. Or the rain doesn’t come at all.

The same is true for markets. Consider this:

In 2008, the S&P 500 dropped 37%.  But in 2009, it rebounded with a 26% gain.

In 2020, markets fell over 30% in just a few weeks… and, still, the S&P ended the year up by 16%.

Trying to time these turns is nearly impossible.

Staying invested through them is what makes the difference.

Think of those down years like a dry season in your garden.

The soil still holds nutrients. The roots are still alive. You don’t rip out everything — you water, protect, and wait.

Here’s another gardening and investing truth: most growth happens where you don’t even see it.

In investing, that invisible force is compound interest.

Let’s say you invest $10,000 one-time at age 30. If you earn a 7% average annual compound return, you’ll have just over $106,000 by age 65.

But, if you wait until you are age 40 to invest that same $10,000? You’ll have only about $54,000

when you are age 65.

So, just about ½ of what you have by starting 10 years earlier.

Same seeds, same soil — just planted earlier and left alone longer.

So, what does gardening teach us about investing?

You plant with intention.

You diversify your crops.

You don’t panic when things get rough.

You trust time, not luck.

And you harvest when it’s ready — not when you feel like checking.

Let it grow. Don’t overwater. Don’t over-manage.

Don’t pull your portfolio up by the roots just because the weather feels weird.

The best investors — like the best gardeners — are patient, persistent, and humble about the fact that they’re not fully in control.

They just show up, season after season, and give things time to grow.