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As autumn is upon us, and I observe my nice neighbors toil for hours on end, they are raking, blowing, vacuuming, etc., the millions of once beautiful leaves, alas, they are no longer attractive, just an enormous annoyance for the majority. I submit, as a former leaf raker, the following.
When investing, simpler is generally the correct option for millions of people not named “Buffett”, to wit, a 3 or even 2 fund portfolio would outperform a vast majority of more complicated accounts, a total world stock market fund, a short term treasury fund for liquidity, and so forth.
I am convinced, and the data appears to confirm , that simpler when maintaining the grounds is also the rock solid path to victory, the low cost “index funds” of the landscaping world, if you will.
I offer the following, clearing the leaves should be no more labor intensive than simply mowing the lawn. All we need to do is run the leaves over with the mower, if a mulching blade is on the machine, one pass does it. A conventional blade may require a second pass, but, voila’, the leaves are now shredded , and will soon compost into rich loam.
Mowing the grass and bagging the clippings and dumping them is not the right way , either. Remove the bag, and let the clippings rot into loam. I think of the clippings as the dividends of the grass, let them compound , and over the years, they will add a lot of nutrients and growth.
Having stock dividends and bond interest reinvested contributes a great deal to growth, of course, and is far better than spending the income on blue hair, tattoos and 20 dollar beer at a pro game.
Not too long ago, it could be a bit of a headache to reinvest dividends, as tracking cost basis was not pleasant, perhaps similar to having a tooth pulled with no anesthesia while suffering a hangover, and listening to Yoko Ono ” singing” ,etc.( Yoko, I am sure you are a great person and have many favorable qualities, but, singing is not one of them, IMO) Fairly recent changes in regulations now require that investment companies track cost basis for you.
I am sure that many of you do not mow your lawns, rather you hire a landscaper, but, if you ask him or her to recycle the grass and leaves,I am sure it would save some money, and truly,it is much better for the yard.
There are a few major errors when so many invest, market timing, buying high and selling low, letting the tax tail wag the dog, chasing performance, buying active funds, and the like. The major errors in lawn care are, cutting the grass much too short. Unless you are working for a country club, the Boston Red Sox or similar, set the mower on the highest level and the lawn will be much more resistant to dry periods, have less weeds and look fine.
Always mowing in the same direction, watering at the wrong time, etc., are not good practices, either. If you insist on watering, do it just before the sun comes up, and not at high noon, when up to half can be subject to evaporation.
It is frustrating to see my great neighbors scalp the grass, then set up the sprinklers to try and force the grass to grow. If all of the grass is cut to the same height, 4 inches looks fine, certainly better than 1 inch tall, turning brown and sprouting weeds.
I am probably the only person in the universe whom welcomes the leaves and I have often driven my lawn tractor with the cart, happily picking up the brown bags of leaves my neighbors put out on the curb. ( Next spring, they will eagerly buy yards of loam at 30 bucks a cubic yard, ….?)
Also, a bit of either pelletized or ground limestone will hasten the rotting of the grass and leaves, and pushing a spreader is fine exercise, for larger areas, a spreader towed behind a Deere works, also.
Why not let our dividends compound throughout the year, weekly,as well as the clippings, in the fall, reinvest the capital financial gains, and the capital gains of the leaves. Have you ever wondered why the woods are very difficult to walk , tangles of vines and trees, and so forth. It is because the leaves and dead trees are nurturing that soil, left undisturbed, trees grow so close together, and that soil is black gold, loaded with nutrients and earthworms.
Now, maybe we can compare active traders to the carpenter ants and termites , we certainly do not want active traders churning our investments, especially in non tax advantaged accounts, but, they are needed to keep the markets efficient, and we are free to use index funds.
As for the ants, no one wants them anywhere near the house, but they perform a valuable service, in the wild, as they do their business, helping return the brush to nature.
I respectfully ask that those whom are overwhelmed by the leaves, try my approach, just mow them, rather than employing those backpack leaf blowers, even on a paved driveway, set the mower at one inch, and the leaves will be shredded. The next breeze will blow them away.
If I am horribly wrong, please, and your lawn looks like a herd of elephants went on a rampage, let me know, and i will humbly never again write even a single word. But, why not try to save time and money, get better results, and institute the practices that are far superior in both investing and landscaping?
In many cases, easier does not pan out to superior results. But, in many cases, it does.
If everyone just used an ETF index fund, what would happen? I’ve read it could cause market stagnation.
We are currently in a drought here in the NY/NJ area. Not a drop of rain the entire month of October! If I did not run my sprinklers on at least an every other day basis, every bit of our well cared for lawn and landscaping would have died. Yes, simple is fine but we still need to monitor and tend to our “lawns” occasionally.
We have watering bans all summer. No sprinklers, etc. Heavy fines and shut offs, if ignored.
If there is a drought where is the water coming from to water the lawn? Should it be used for that purpose?
We have watering bans from May to October. No auto sprinklers, hand held only. Every other day, early morning and evening, etc. If ignored, warnings, fines, shutoffs. I agree with it. Water too precious to use for non essential. If people insist, they can have a private well drilled. They can use it 24/7.
That is especially true this late in the year. The irrigation sprinklers in our CCRC which is 25 miles north of NYC were turned off two weeks ago and that decision had nothing to do with the drought.
I am happy to say that I no longer have a yard. I am also happy to say that my portfolio is almost entirely in low cost index funds, with reinvestment turned on. I might rebalance once a year. Or not. I call this benign neglect, or productive procrastination, and it has worked very well for me. Of course, some might equally call it laziness, but that’s OK.
Some folks have get their mowers out every few days, worrying and fretting over every little leaf that falls, thinking they have to “do something” every time a few leaves fall (these are the “active leaf managers”). Me, I enjoy the color change of the trees, am entertained watching their leaves fall, and then mow all those leaves up at the same time–one and done (a “passive leaf manager”, if you will).
Hmm. I’m not really sure what this has to do with investing; maybe I’ll figure it out one day. In the meantime, excuse me, I need to get outside for a nice, long walk, and enjoy the beautiful fall weather…
I have a standing agreement with my wife to not cut the front lawn and leaves until after October 31 so the trick or treaters can crunch their way up to our front porch on Halloween.
I like your thinking both about lawn care and index fund investing.
Nice article. My yard either contains or is adjacent to three huge oak trees, in addition to others such as dogwood, star magnolia, ligustrum, and wild cherry. The fall of leaves in my front yard exceeds the capacity of my Honda self-propelled lawnmower to mulch, even with multiple passes. I blow that to the curb for eventual collection by the city for remote processing. I mulch in my much larger back yard, requiring multiple passes. When possible, I transfer the result to my vegetable garden to nourish the soil over the winter.
There’s an analogy here with my finances. My holdings are in two different forms: IRA and investment accounts. I leave the investment account alone for growth and reinvestment because I may need it some day. Sounds like mulching the back yard. I take a small monthly draw from my IRA (I’m not old enough for RMDs) and add that to my Social Security income. I’m not sure this entirely corresponds to blowing the leaves to the curb – other than it’s additional processing and use.
Your analogy is good, but as my son in MO just found out after re-seeding with a different grass blend, his mower (and many others) can’t be set to mow at a 4″ grass height. And, of course, mower settings don’t correspond to height either. They are arbitrary numbers relative to that mower.
Great analogy Mike. The average investor doesn’t realize how easy investing can be.
As a tax preparer I cannot tell you how happy I was when providing cost basis became the law of the land.
i don’t have a lawn now a days – not where I live anyway, but I have been reinvesting dividends for over fifty years and investments grow almost as fast as grass – and you don’t have to water them.
Connie once caused me to fire a landscaper because they kept cutting the lawn shorter than three inches.
Simple is always better in my book. The average saver/investor can’t handle anything more, me included.
I used to have the lawn cut, I also fired them . They also cut too short. I am able to maintain the lawn at least several more years, and I will try to not worry too much about after that. My guy would cut it even during droughts, and I didn’t enjoy paying 75 bucks for that.
I watch my next door neighbor’s lawn being scalped by so called lawn care “professionals” on a weekly basis, even when drought creates a dust storm. I so want to tell my neighbor they’re getting ripped of, but…
Well said. I feel that the term “landscaper”, is not appropriate for most of the guys mowing, etc. As with investing, a stranger mowing will most likely not care as much, nor do as good a job, as the owner of the yard and money.
I do not mean fee only people whom suggest index funds, and do not churn the investments and so forth. I mean the ones that use load funds, actively managed, and trade far too much.
My neighbor always asks me what he is doing wrong as far as the grass is concerned. I tell him your people are mowing too short, cutting too often, not watering properly and the like. He usually says, ” Well, they are the pros “I gave up.
In sunny areas, we would need to water at least every other day for at least 45 minutes, to keep it green. In shaded places, 30 minutes. And that is foolish. I cannot imagine how much water is used on golf courses in Nevada, Arizona, and other arid places, clearly a lot.
The landscaper I let go years ago was very talented, though. He would race around at a high rate of speed, drinking a coffee, smoking a cigar and talking on the phone via ear buds, and I submit, if there was ever some type race, using riding lawn mowers, he would be the Mario Andretti of landscaping.
Next up, I will try and convince my nephew that buying that brand new Land Rover, putting down a tiny down payment, and financing the remainder for 8 years was not a wise choice.
He has owned it for only 6 months and about 7,000 miles, and it has spent far more time at the dealer for repairs, than in the driveway. It is very nice looking and has all the bells and whistles. Meanwhile, my 2002 Toyota Corolla , with 326,000 miles, has had no major problems and although it does look a bit ratty, and uses a quart of oil between oil changes. I only paid 12k brand new, I think I did good.
When, not if , my nephew gets rid of the thing ,before too many years pass, he will suffer another tremendous hit, the resale value will be a fraction of what he paid.
As I write this, it is going on 16 days in a row at the shop, and no end in sight. Oh well. It is also the fifth time it has returned to the dealer. This latest visit required a tow truck, also.
For reference, Warren Buffett drives an 8 year old Cadillac, and, I hope everybody has a wonderful, low or zero stress day.