We have all heard that “Money Doesn’t Grow on Trees”. Probably you first heard it when you were 4 and asking your parents for the latest must-have toy. I read it recently in some Forbes article that spurred me to think about this. I’m neither a tree expert or a money expert. I do feel reasonably “oriented” in care of both. I’ve lost trees and I’ve lost money. I’ve had great trees and I now have reasonable wealth. Both are precious resources. In many ways, money does grow like trees. Teach your children; don’t make it too complex.
- A tree doesn’t grow without a seed.
- Money doesn’t grow without a seed. You need to have a little money to grow any money.
- A tree doesn’t grow without the right conditions. It must have water, sunlight and appropriate nutrients.
- Money doesn’t grow without the right conditions. It must be safe and you must provide it with the right conditions for the type of growth you want. We will call the right conditions “savings”.
- If you fertilize a young tree a little; it grows faster. Instead of taking 25 years to mature, it will reach maturity in 15 years.
- If you add a little money to savings, it grows faster. Here is a simple example. If you start with $100 and put it in savings with 5% interest. Year 15 you have $198. If instead you “fertilize” it with $10 each year, you will have $394.
- It usually takes 10-25 years for most trees to reach maturity.
- It usually takes 10+ years for money to grow significantly. Unlike many trees, money does not stop growing.
- Despite having reasonable conditions, a tree may wither and die.
- Despite having reasonable conditions, money may wither.
- If you cut a large branch off a tree, it may wither and die.
- If you take out a significant part of your money, it may wither and die. If you are lucky and it doesn’t, it will grow much slower.
- If you transplant a tree, it may take a long time to start growing again. but it may grow faster in it’s new location.
- If you move your money, it may take a while to start growing again; but it may grow faster in it’s new location.
There were many times in my life that I felt too poor to save money. I learned that it is important to save a little – always. It may be $10. If you wait to save until you can afford it, you will never be able to afford anything. Plant a tree to remind you to save.