Agriculture and planning for F.I.R.E: What are the similar principles?
Agriculture and Financial Independence Retire Early (F.I.R.E.) seem worlds apart. One is in the natural realm, and the other is in the world of finance. But when you examine deeper, both pursuits have striking parallels, and the same virtues can improve your results in both.
The similarities between Agriculture and F.I.R.E
We have different views and needs on agriculture and Financial Independence (F.I.). But what are the similarities and parallels?
1. Connect the dots backwards
Begin with an end in mind and holding a long term view are fundamentals to both agriculture and planning for F.I.
Any person with experience in agriculture or even gardening could benefit from applying many of the same principles to their F.I. journey, not least when conditions change and patience are required.
Like investing in F.I., agriculture starts with understanding what you want. It would be best if you had an idea of the kinds of fruits or vegetables you want to know which seeds, the size of land, type of soil and irrigation are required.
For example, it takes months for the seeds to germinate and at least seven to eight years to produce a sound quality durian. You have to look after it without getting anything back, but it can do so for decades when it starts producing. Similarly, when you are saving for a rainy day or retirement, you need to keep replenishing your pot if you dip into it.
2. Capability vs Creating Capacity
You can manually water your tree, grow plants from seed or sort the fruits manually. On the other hand, you can build a timer-activated irrigation system, buy seedlings or sort the fruits using a sorting machine.
Working towards your F.I., you can work in your own business, actively trade stocks, or pursue service-based side hustles in your free time. On the other hand, you can also create a 4-hour workweek modelled business, invest in mutual funds, or create easily duplicable digital products.
It all narrows down to the choice of costs; capital costs vs opportunity costs.
The end goal is the same, but the result may differ.
3. Volatility and Unexpected Events
The markets are volatile, similar to weather which can sometimes take an unexpected turn.
Both agriculture and investments will invariably be affected by the unpredictability of conditions and weather. Storms and wild animals may come and go, often leaving damage in their wake. Farmers know that this is all part of the experience and need to adapt and change over time.
Hence, it is helpful for F.I.-aspirers to think about what happens when agriculture is affected by unexpected events and bad weather. You will not dig it all up and start again; instead, you will manage it (both physically and emotionally), make changes and stay patient.
This mindset is also the case for the ups and downs of investment markets. While the short-term negative impact can be uncomfortable, simply giving up could be very costly. In contrast, staying the course and making any necessary alterations gives you a chance to benefit from any eventual improvement in conditions. As I always like to share with my friends for investing in the equity market, “It is not about timing the market (no one can!), it about how much time you have in the market to build your retirement nest.”
4. Finding and creating the ideal environment for the best outcomes
One of the first things I learned about agriculture is how important the soil is. It must be full of organic material and well-draining. But most important of all, it must be full of life. Nothing will grow if the soil is dead. You also have to ensure that the plants are in the right environment. There is no point in growing tomatoes in the shade, as they need sunshine.
It is the same with investments: if you want your money to grow over the long term, it needs to be in an environment that offers the conditions to produce the returns you want. For example, a retirement fund that depends entirely on cash is highly unlikely to give the annuity fund you need later in life.
Lastly, agriculture and planning for F.I. rely on a rich medium to grow in. For the latter, the medium is you! You must invest time and resources into your financial education. For example, if you didn’t know why just paying the minimum of a credit card bill is terrible, then you have little hope of paying that bill, let alone planning for F.I.
5. Consistent care and attention
The unavoidable truth about agriculture and planning for the F.I. is that they need attention.
You probably will spend hours with the farm because you have spent much time and resources working out what they need. It is like ‘seeding’ your money in and hoping it will grow. However, you must be mindful that the farm must be in the right place, and if it’s not working, you might need to adapt as you go along. But when you keep an eye on it and make sure it’s growing as you would expect, you can rest easy knowing that you are on course to reap the rewards eventually.
Similarly, you don’t have to open up your investment portfolio daily. In fact, it’s better if you DON’T check them every day. Setting your investments into autopilot is better and having a certain amount deducted on your payday. But you DO have to check your discretionary expenses regularly.
6. Divide your risk, double your safety net
If agriculture isn’t your area of expertise, it can be hard to know where to start, what you need, when to take action and how to make it work. You would not acquire a piece of land without knowing what kind of soil and its condition, what you should plant, and how to manage the farm. Unless you have done it before, you will probably go online, read about it and seek advice.
Again, there are parallels with planning for F.I.
Unless you’re experienced and confident when it comes to long-term investing in managing your wealth portfolio, you will need guidance and advice, not just to get you started but to keep things on course over time. You wouldn’t throw something in the soil and hope for the best, so why would you do that with your savings and investments? You work hard for the money, and you should not spray your dollar into any unfamiliar asset allocations sparingly. You should put the dollar at the right place and demand the money to work harder for your F.I. and get the results you want. In my opinion, you are more likely to achieve success in your F.I. if you take advice from specialists.
Conclusion
Agriculture and planning for F.I. may seem like they have little in common at first glance. But I found a lot of similarities upon retrospection.
Both require you to take action now and aspire to build something for the future, and you can take different strategies and routes along the way.
Both take a certain amount of planning and determination to know what to grow, how, and when; and persevere if yields or results aren’t what you had envisioned.
However, to me, it also boils down to freedom of choice, picking the right brain and trusted specialists to support my journey toward F.I.R.E because I left not many ten years ahead.
About Me: How do I get involved in agriculture and planning for Financial Independence (F.I.)? That would carry another article on its own. To sum it up here, I have been dipping my hands in the fresh produce business and finance long enough to connect the philosophical dots from both sides. However, I am still learning, and in fact, this journey on agriculture and F.I.R.E. is a life-long learning topic. I will never confess to being the expert but with continuing hands-on experience.
