Jerrold J. Johnson
Career Writer

The meticulous world of investment and agriculture. What could be the possible co-relation, many might ask. Sadly, in our modernised society many of us have moved away from agriculture and as such, often miss the positive principles that can be applied from farming to everyday life.

While thinking about the challenges we face in the coming months, possibly years, if people were to apply some basic farming principles to their financial lives, it would assist them in weathering these tough times.

Here are three of the actions that a farmer takes :

1. He considers the harvest he wants before he starts

2. He prepares for planting

3. He sows seeds

On the surface these three activities may seem both obvious and perhaps insignificant; obvious yes, but not insignificant. Let us look closely at the thought process of this smart farmer.

Before he starts he asks himself several questions so as to decide which crop he should plant. He considers such pertinent questions as:

How much money do I want to make from this crop?

When do I want the money in my pocket?

How much risk is involved and how much money am I willing to lose if something bad happens to this crop?

Do I know enough about the crop I am considering?

Are my expectations realistic?


Before investing a single dollar, we should think like this farmer! How much money do I want to gain from investing these funds? What is my time horizon? What type of risks am I willing to assume with these funds? Do I need more information about the investment instrument? Are my expectations based on the realities of the financial environment?

Once the farmer has chosen the crop in which he wishes to invest, the soil must be prepared. No seeds, seedlings, or suckers can be planted without the preparation of the soil. This would be the equivalent of getting the money ready to invest. For some, it could mean the budgeting process and deciding the amount of funds available to invest. For others, it could mean getting the appropriate financial advice from a professional.

When the ground is prepared, the farmer then sows the seeds or plants the suckers and seedlings. Importantly, a good farmer plants both in good and bad times. He may alter his strategies, but if he stops planting he will have nothing to reap at harvest time. This parallels the intelligent investor who recognises the significance of investing (with varying strategies and in different instruments) throughout his/her working life.

From all appearances we are entering a period of stormy weather. Look past the dark clouds and have the courage to think like a farmer. Sow your seeds today while being cognisant of the stormy times. Plan well and strategise with professional help if you need it. Prepare to reap a harvest when times improve.

"So now going forward in the New Year, the campaign 'grow what you eat and eat what you grow' should have a special meaning to you - the smart investor! Have a productive year ahead!

Jerrold J. Johnson is financial advisor - JN Fund Managers Ltd. He can be contacted via email, Jerrold@jnbs.com