If you’re a parent, this is one of the greatest lessons in financial education to pass on to your child – 07/23/2023 – From Grão to Grão

I don’t know anyone who didn’t plant a beanstalk as a child. It seems magical to see it germinate and grow. I planted several in cotton. However, that moment that seems magical passes and soon we get tired. So it is with investments. The teacher needed to teach me that the magic moment was the end and not the beginning. Today I know and I will explain to you.

As the Myfarm portal explains, “every crop has its defined phases, and the combination of these phases make up the phenological cycle of the crop.”

To my surprise, the bean phases are similar to our independence investment cycle.

The bean phenology has 9 phases:
I – Germination;
II – Emergency;
III – Primary Leaves;
IV – Third trifoliate leaf;
V – Pre-flowering;
VI – Flowering;
VII – Formation of vargens;
VIII – Filling of the vargens;
IX – Physiological maturation.

The coincidence is huge. In our plan for financial independence, we start with the decision to save and invest. This would be the germination phase of investments.

Soon after, we move on to phase II, which is to create the emergency reserve.

When the portfolio starts to show some result, which is in phase III and IV, most do as in the beanstalk, they abandon it. As a child, I would get tired at this stage and abandon the beanstalk.

I’ve never seen a beanstalk grow to full size, and I believe most people do in investing. Hardly anyone manages to have the discipline and patience to wait for the last phase, which is maturation. Ends up spending the reserve created.

In the last phase, the maturation phase, the bean pods begin to produce the planned results. This would be the stage where you reach financial independence. Your portfolio is capable of generating income for you to cover your expenses and live peacefully.

However, as with beans, the path to reach this stage is laborious. You have to water every day, take care of the soil, the temperature and that pests don’t attack the plant.

It’s all the same in your portfolio, you have to invest regularly, take care of the portfolio, the risk and that bad decisions do not destroy your portfolio for financial independence.

If well cared for, a beanstalk takes about 100 days to reach the last stage.

If well planned, your financial independence can be achieved in 10,000 days.

Time is a hundred times bigger, but let’s face it, the beanstalk that represents your independence is worth much more.

I didn’t know how to wait for my beanstalk, but I’ve already passed the last phase of the investment part and I’m helping others in this plantation towards financial independence.

I can say with complete confidence that the magic is at the end and not at the beginning.

Have the discipline to invest regularly, take care of your portfolio, the risk and that bad decisions do not destroy your portfolio and financial independence will be a matter of time.

If your child plants a bean, don’t let him abandon it before maturity. When you get there, explain this relationship with investments. This will be one of the best teachings for him to prepare himself in a simpler way to support the process for his financial independence.

It is not for nothing that this column is called De Grão em Grão.

Michael Viriato is an investment advisor and founding partner of Investor House.

Talk directly to me via email.

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