Helping Your Kids Learn About Investing Through Gardening

Teaching your children to invest is a very noble goal, and it can be as hard and serious or as fun and easy as you want to make it. Financial planning is a life-long process, and the sooner they get a grip on it, the better. So, what can you do to help prepare you children to invest properly? I suggest doing a little gardening project at home.

What are some basic principles about investing? Risk and reward, diversification, plan creation, implementation, and consistent maintenance—all of these can be found in gardening. Plus, if you teach them the fundamentals of gardening, they’ll also be able to live a more self-sustaining lifestyle if they choose to.

Choosing "Investments"

Give your children a small amount of money to go pick out some small, live plants to bring home (seeds will teach more patience, though). While picking plants, you can let them explain each of their choices to you and then give them feedback.

Do they fall in love with one and want to invest all of their money in the largest or prettiest plant in the nursery? Just because a plant is big or attractive doesn't mean it's hearty or reliable. The same can be said for companies you might invest in.

Encourage your kids to chat with the sales person about which plants are recommended in your climate, and which plants will produce the most fruit, seeds, or flowers -- explain to them how you can research plants the same way you'd research stocks or other investment options.

Diversification

Should they just pick one plant, or many? Each one will provide something different, and they'll all grow at different rates. If they pick a vegetable like peppers, those will come up later in the fall. If they pick pretty annual flowers, they’ll get to see the returns of their labor more quickly, but won't be able to use them for food later in the year.

Letting them pick two or three of each plant will help ensure the odds that one of each will survive and grow. Plant more than one, so if one plant doesn’t make it, you still have gains.

If you pick a flower because you like the way it looks, is it annual or perennial? Will it keep coming up, or will they invest all their time and money in something that will only have very temporary growth? No one said you’re going to give them another boost of income next summer, so choosing a plant that will continue to bloom year after year is a good choice -- much in the same way that a stock might pay dividends multiple times.

Planning and Implementation

Let your children pick the watering containers of their choice, be it a hose or some cute pails. Watering and maintaining the garden can be a lot like managing your portfolio. You need to watch carefully what's maturing and growing and what's dying off, making decisions about the garden and what plants to buy next year accordingly. Which plants deserve more of your time and investment? Which plants have been a disappointment? What can you learn about other plants based on these ones?

Watching your investment portfolio grow and wane can often help you to decide what direction your investments will take in the future. The more you have your hands in it, the more you'll learn!

Keep Watch for Potential Problems on the Horizon

You must also watch out for any upcoming storms or draught (aka: loss of income, market crashes, and inflation). Unfortunately, you can only do so much to prepare for and respond to these types of uncertainties. The lessons you’ll teach in rolling with the punches when it comes to the weather and its effects will cross over into many different parts of your children’s lives, including their eventual investment portfolios.

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