Tale of the monkey puzzle investment

The tale of the Monkey Puzzle investment. In our front garden we have a Money Puzzle tree.  We think it is about 40 years old and about 20 feet tall.  We love it!   The tree is quite a feature in our front garden and when we give someone directions to our house, we often say “look out for the monkey puzzle tree on the left”.

Monkey Puzzle trees are not very common in the UK, ours is the only one we have seen in our neighbourhood.   They can be worth quite a lot of money, with someone telling us they are worth about £100/foot which makes ours worth £2,000, assuming you could ever dig it out of the ground in one piece. Every year the tree produces a kind of “flower” and numerous seeds fall down onto the grass below.  Generally these simply get sucked up in the lawnmower which always seems a waste.

We could be sitting on a gold mine!

Once I looked into seeing if we could germinate these seeds and grow some little trees ourselves.

“At £100 a foot we could be sitting on a gold mine! – every year we get hundreds of seeds” I explained to Rachel who was slightly dubious about my latest hair-brained scheme.  If we needed a green house or some other bit of kit, well I’d be up for it.  Nurturing monkey puzzle trees seemed very attractive and could even support my pension fund!

Rachel, having an interest in horticulture and knows a thing or two about trees, explained the reproduction requirements of the monkey puzzle tree.  I felt as if I was a youngster having a talk about the birds and the bees from my mum. Except it wasn’t my mum, it was my wife of 22 years.  So I gave up on the idea.

Later, imagine our delight when Rachel spotted a tiny little monkey puzzle tree growing in our front garden!  We keep watering it hoping to see if it will flourish in our chalky, well drained soil.  The seedling itself is about 2.5cm high and must have grown all of 2mm this year, so arguably this is not a stunning growth rate.  I am resigned to agreeing this is not a lucrative, alternative investment after all.

Lessons learned from 20 years ago?

We once read in the newspaper about a company which had just registered the patent on a new kind of syringe.  It was designed to minimise the danger of cross infections where the needle would spring back into a protective sleeve once an injection had been given to a patient.  We were so impressed we decided to buy some shares in the company.

The value of the shares soared high very quickly.  I think it went from about 5p/share to over £1.20/share.  We sold them and made a handsome profit, all within the space of a month.  Encouraged by this get-rich-quick move, we thought we would try again when we later read about an undervalued British engineering company winning a new multi-million pound deal.  So we invested our profits and bought some shares.

You guessed it.  After an initial rise the price fell.  I made the very foolish decision to sit it out, thinking it was some short term volatility and decided to average the cost of the shares by buying some more at the lower price.  The value remained steady for a little while and gradually fell further and then the company became insolvent.  I had lost the investment completely, including the profits of the original investment. I felt so bad and regretted that immensely.

A tough lesson to learn

This little foray into the stock market was not far removed from gambling.  I have always known gambling was bad news and yet for a short time I got sucked into that mentality.

Far better is to invest money in pooled funds.  This is where fund managers will buy stocks, or other forms of investments, in a wide range of companies, sectors and even countries.  This spreads the risk well.

Add to that the merits of having a balanced portfolio of different investments, so we are not dependent on one fund or sector performing well.  Hopefully any fluctuations would simply be averaged out with a resulting growth rate which is reasonable.

Although we were clients of our independent financial advisors in those days, we never told them about our little flutter.  Almost like a school child with a guilty conscience, perhaps?  This all adds weight to a number of principles:

• Take advice.  If you pay for advice, you’re foolish not to follow it.
• Don’t gamble.  There’s a world of difference between short term speculation and long term pooled investments.
• Consider what is important to you and, as an example, you can choose to invest ethically and avoid putting your money into alcohol, tobacco, weapons and so on.
• Get-rich-quick schemes are doomed to failure 99% of the time.
• Never put your hopes in something which is purely a chance; always seek genuine assurance (and this includes the Christian faith).

Related: why financial planning is important