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Financial Planning
Apr 2022

The Money Tree

By Alex Black, CFP®

As a kid, I would wonder with friends why money doesn’t just grow on trees. Why can’t I just pluck a dollar from a tree? Life would be so easy. What if I told you there is such a tree. For those willing to take the journey, I assure you the money tree is real, and anyone can make one. Below is a step-by-step guide to grow your very own money tree.

STEP ONE: Start with the seed

To grow any tree, even a money tree, you need to start with the seed. The seed I am referring to is savings. Depending upon who you are, savings may be big, or small, but savings of any kind, even $1, is enough to start your very own money tree.

STEP TWO: Plant it

Once you have your seed, you have to plant it so it can become a money tree. The ground, for a money tree, isn’t made up of dirt, but rather is an investment account. Any investment account will do, but an account at a well-established bank or brokerage is preferred, because like good soil, a long-standing bank or brokerage will provide a strong foundation from which to grow.

STEP THREE: Add water

A money tree’s sustenance, as opposed to water, is the right mix of investments to help it grow big and strong. Generally, it is best to use a broad mix of globally diversified stocks and bonds, which can be accomplished through a mutual fund or two.


Much like a good crop, you won’t see your money tree grow overnight. It takes time and discipline before you notice any growth. However, if you are patient, you will see the fruits of your labor.

STEP FIVE: “Harvest” your money, maybe

After the long wait, like money falling from a tree, dividends and interest will “fall” into your account. If chosen correctly, the investments you’ve selected will have produced returns that can be taken from the account and spent on your goals and desires. A word of caution though, taking too much fruit from your money tree will cause it to whither, weaken, and eventually die. Someone who wants their money tree to continue to bear fruit each year, will take only an amount that allows it to continue flourishing for years to come.

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