13 Oct Investing and the patience of a Gardener

I’m not sure how long I waited for this flower to arrive. It’s in the scope of 5 or more years, possibly even longer. Time does fly by.

For a long time, I would see this solitary leaf show up in the garden. I had no idea what it was, perhaps a bulb, planted long ago when the garden was sunny (I had a massive bamboo grove next door – started out small, but you know how that goes!).

Eventually I dug it up and stuck it in a pot. For that season and the next, I was rewarded with 2 or 3 leaves, progress!  Until one Spring when this beautiful display arrived.

Investing for a long-term future like retirement, requires a little patience. It can look like nothing is happening, or not enough is happening in the beginning, until suddenly, the effect of time and compound interest starts to pay off.

Imagine if you started saving $100 per month. After 12 months, that would be $1,200 and after 20 years, $24,000. But what if you were earning a 5% rate of return, compounding monthly? In 20 years you would have a little over $41,000 and in 30 years, $83,000. If you were earning an 8% return on that money, that 30 year figure becomes $149,000.

As Warren Buffet has said “My wealth has come from a combination of living in America, some lucky genes, and compound interest.”  Buffet is also quoted as saying, “Someone is sitting in the shade today because someone planted a tree a long time ago.”  Planting trees is a worthy cause and so is planting your money, with an intention for it to grow so you can reap the rewards in the future.

Commit to your financial goals, keep saving and investing, make sure you are invested appropriately for your comfort with risk and your timeline; and above all, don’t give up!