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Published on 21 Jun, 2024
“Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed the sooner shall the tree grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner may you bask in contentment beneath its shade.” 
 
~ George Clason, ‘The Richest Man in Babylon’ 
 
Do you have any fruit trees in your garden?
 
On the weekend, we were in the backyard picking mandarins from our tree.
 
I climbed up the wobbly step ladder while Kaci held onto the frame.
 
I reached as high as I could (putting my life at risk) to pick the ripest, juiciest mandarins from our tree.
 
There were some sketchy moments, but thankfully I survived.  
 
There’s nothing quite like eating fruit from your own tree.
 
It always tastes the best (Clifford agrees).
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The older I get, the more I appreciate nature.
 
Nature can teach us a lot about life, business and investing. 
 
A few years back one of my mentors shared how trees can be related to investing.
 
In nature, there are two types of trees:
 
  1. Evergreen Trees
  2. Deciduous Trees
 
Evergreen trees keep their leaves all year around, whereas deciduous trees shed their leaves in autumn.
 
Then there are deciduous trees that produce fruit (like our mandarin tree).  
 
When it comes to investing – investments can be ‘evergreen’ or ‘deciduous’ in nature. 
 
It’s important you understand the difference. 
 
An evergreen investment is one that grows in value and size – but DOES NOT produce income.
 
A deciduous investment is one that grows in value and size – AND produces income.
 
Planting my First Deciduous Money Tree
 
In December 2015, I purchased my first parcel of shares on the stock market. 
 
I didn’t know it at the time, but I was planting my first deciduous money tree – because this particular company paid bi-yearly dividends. 
 
In February 2016, I received my first ever dividend payment of $86 from this company. 
 
That was when I realised money does grow on trees!
 
Because I had been diligently learning about investing, I knew it was important not to eat the fruits of my money tree before they were mature.
 
When you eat the fruit from your money tree too soon, you stop the mighty power of compound interest. 
 
And that is a bad idea. 
 
In September last year, we received a dividend payment of $1,060 from this same money tree.
 
This highlights how your money tree will grow and produce more fruit when you continue to water it and resist the temptation of eating its fruits too early. 
 
Over time, this money tree will continue to grow into a big and beautiful tree full of delicious fruit that my children and future generations will be able to enjoy.  
 
My Evergreen Money Tree Transformed into a Deciduous Money Tree!  
 
8 years ago, I watched a video from a guy called Tony Seba talking about ‘clean disruption’ and the electric revolution. In this video there was a slide that showed how many moving parts there were in an ‘internal combustion engine’ (petrol) vehicle vs an electric vehicle.
 
I wasn’t a great mechanical engineer at the time, but I understood the effect of having significantly fewer moving parts in a vehicle – more efficiency, less maintenance costs, etc. 
 
From this moment, I knew electric vehicles were going to be the future (at the time this was still a new technology and most people were sceptical). 
 
So I started to learn more about electric vehicles and what resources were needed to build them.
 
One of the key resources was ‘lithium’. 
 
After doing my research I found a lithium exploration company in WA – they were sitting on a world-class lithium resource and were run by a strong management team.
 
But they were a long way off turning their world-class resource into an operating mine and making a profit… (it takes a minimum of 5 years to go from exploration to mining – sometimes a lot longer).
 
At the time, this was very much an ‘evergreen’ investment (and still quite speculative in nature). But because I had done my research, and I believed in the electric revolution – I decided to put some skin in the game. 
 
I held this investment through YEARS of ups and downs and pain. 
 
At one time during COVID, our investment was down 90%… 
 
But my patience was rewarded. 
 
In 2023, this ‘evergreen’ money tree that almost died turned into an abundant ‘deciduous’ money tree. 
 
Because the mine was now up and running and they were making some serious money with the tailwinds of the electric revolution.  
 
This meant the company was in a position to start paying a dividend to their shareholders.
 
(Dividends are simply a share of the company profits that shareholders receive.)  
 
Last year, we received $17,628.57 of dividend payments from this money tree I planted 8 years ago! 
 
Buying an Evergreen Money Tree called Bitcoin 
 
In 2021, I hopped on a free webinar from someone I knew in the coaching world who was an expert in the crypto space (this was when Bitcoin was going through a boom cycle). 
 
I was super sceptical of Bitcoin, but I was curious to find out what all the hype was about.
 
By the end of the 90 minute presentation, my mind was opened. 
 
I could now see the problem Bitcoin was solving. I could see the value of it as a storage of wealth that could not be diluted from senseless money printing. 
 
But the thing with Bitcoin is – it’s an ‘evergreen’ investment. 
 
It grows in value and size, but it DOES NOT produce income. 
 
This means the only way to make money from Bitcoin (and similar evergreen money trees) is to ‘cut down a branch’ – meaning to sell a portion of your tree (at a higher price).  
 
The other thing to consider with evergreen investments (and all investments) is paying ‘capital gains tax’. 
 
When you sell an investment and make a profit – you now have to pay tax on that profit (if you operate under different business structures and have a good accountant you can be creative with this and move your profits into new investments without having to pay tax).
 
Here in Australia, if you hold an investment for over 12 months, you only pay tax on 50% of the profit (which is very generous). 
 
The main point here is you CANNOT live off the fruits of your evergreen money tree unless you start cutting down the branches. 
 
If your tree is small, this strategy won’t last long…  
 
Our Home Became a Deciduous Money Tree
 
My wife bought a property when we were in the early stages of our relationship.
 
This was an ‘evergreen’ investment. 
 
Because the property would likely go up in value in the future, but it did not produce any fruit (income).
 
(Unfortunately she bought at the WORST time – the property market crashed hard the following year…)
 
When we moved to the city, we held onto that property and rented it out.
 
This meant the ‘evergreen’ money tree had now transformed into a ‘deciduous’ money tree!
 
Because we started receiving weekly rent from our tenants. 
 
So much wealth is stored in evergreen money trees that people live in.
 
The problem is, you cannot live from the fruits of an evergreen money tree you live in… 
 
What Money Trees are Growing in your Backyard?
 
There are so many factors that go into determining what kind of money trees you should plant in your backyard. 
 
What is a good money tree for me is not necessarily a good money tree for you…
 
I hope this newsletter has helped you understand the nature of different money trees you can plant to build your wealth and produce fruit for you and your family to enjoy in the future. 
 
The most important thing is that you plant the first seed.
 
“The best time to plant a tree is 20 years ago. The second best time is right now.”
 
Happy Planting,
Marshy
 
Disclaimer: This newsletter is for education and entertainment purposes only and does not consider your personal financial situation. Always seek professional independent advice from your financial team before making any investment or financial decisions. 

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WHO IS MARSHY?

Financial Habits Mentor & Host of the Podcast 'Money Mastery with Marshy.

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