From Dirt to Dividends: Use Gardening and Preferred Shares to Supplement Your Homestead

Homesteading is about freedom from the world (large) and the daily grind (small). However, there is one thing that we will never be free of—money. Thus, we need to prepare financially before we run off into our homesteading haze. 

You must be thinking, “what a weird article.” In my last article, “How to Defeat Creator’s Block,” I randomly came up with this topic by combining multiple books I have read. I thought it would be fun and relevant to bring this subject to fruition. Enjoy.

What is homesteading? Homesteading is any combination of sustainability and self-ownership of your lifestyle. This includes creating energy, growing crops, collecting rainwater, and discarding waste. Homesteaders own the process.

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You don’t have to be on a huge farm to become a homesteader; you only need to have the mindset of controlling your destiny (to a certain extent). Homesteaders are more aware of their daily actions than city slickers.

For example, city dwellers may grab their coffee from Starbucks while homesteaders ground their beans. City folk may watch Hulu and Netflix, while homesteaders receive over-the-air broadcasts. 

Don’t run off yet. I plan on living a portion of my life as a homesteader. I want to make money online via content creation, but I want to live simple. Just because I want a simple life doesn’t mean I can be “dumb” with money. I need to understand how to “create money” if I want to survive.

So let’s look at two ways to create money on our homestead; one from the Earth and one online. We are printing our own money by combining these methods—creating an income stream “from dirt to dividends.” 

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I will do a quick review of how to earn money gardening and with preferred shares, then explain how to combine the process best to keep the money flowing. Let’s begin.

Can you start a garden? Everyone can create a garden; there are no excuses. If you doubt you have enough space for a garden, read the book “Apartment Gardening.” Every area has room for some form of plant life. 

The idea of gardening is to grow enough fruits, veggies, nuts, and herbs to provide for yourself. However, you can sell this for a profit when there is excess. It’s the perfect setup. You can also barter with your crops for goods and services around the homestead. 

Your gardening business can be as large or small as you’d wish. A large garden will take a great deal of your time but can sustain your lifestyle. You will need to support a small garden with additional income.

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On a side note, you can create tons of additional income when gardening. When running a small herb garden or large community farm, you can add a “u-pick-it” element, content creation, harvesting insects, or in-person or online courses. 

Prepare yourself for the rise of inflation, the conversion to remote work, and the love of all things organic. These changes mean gardening and sustainable living will be all the rage. Get ahead of the power curve today. 

Perfect preferreds. I choose preferred shares as of today’s investment strategy because they fit nicely with our transactions. We will be earning $25-$100/week from our small garden most of the time.

This is perfect because preferreds trade at or below their par value of $25. So if we make $50 from selling apples, we can buy two preferreds. It will be easy to understand how to convert our money into the preferred format.

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But what are preferred shares? In short, preferred stock is a mixture of bonds and common stock. Preferred shares are stocks, but they are higher on the food chain than common stock but lower than bonds. 

They start trading at their par value (usually $25), but the price fluctuates on the open market. Thus, we can find excellent yields by purchasing them below par. This occurs because the dividends remain the same no matter your price. 

Thus, if we buy a preferred share that pays $2/year in dividends, but we pay $20, our dividend yield is 10%. If we buy the same preferred for $15, our dividend yield is 13%.

I wrote an entire series on preferred shares (101, 102, 103, 104, 105), so you should read those articles to get a better handle on preferreds. Preferred shares are a straightforward investment strategy because you don’t have to worry about capital appreciation. It’s a numbers game—as long as you trust the company.

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Combining gardening and preferred shares. So how would I interact as a gardener who invests in preferred shares? I would create a weekly routine of selling crops, depositing money, and buying the best-priced preferreds.

First, you want to find a banking solution that works best for you. I would recommend Wells Fargo. I can deposit my earnings from my garden directly into my Wells Checking account. From there, I can transfer my new cash into my brokerage account.

Then, I can buy my sweet preferred shares. Wells Fargo will even tell me which ones are on sale by giving me their current dividend yield. Buying preferred shares at amazing prices is very addicting. 

As you can see, my shares of MIND.P are yielding 13%. Yikes. That is the power of understanding where to invest for the best yields. Yes, you have to assume more risk, but that’s everything in life. 

It’s also important to note that my preferred strategy is in addition to my emergency fund, index fund, and dividend growth techniques. So, I have multiple ways to hedge my risk with preferreds. 

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The long and short. In summary, the long and short of my process is this: Grow and sell fruits, veggies, nuts, and herbs. I can make even more income by maximizing additional income streams. 

Any money I make above my needs, I can invest into preferreds. Preferreds are great because I can spend $25 or less on them and get great returns.

By slowly adding $100 to $200/month into my preferred portfolio, I will see this money return to me in the form of dividends. Dividends are guilt-free money; thus, I am literally growing my dividends from the ground up. 

Conclusion. Focusing on compounding small amounts of money ensures you don’t overwhelm yourself on the farm. It doesn’t take much money to change your life with preferreds.

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As you can see with MIND.P, my $1450 produces $191 in income. Imagine you invested $1,450 in your first year of the garden; the following year, you would receive $47 every January, April, July, and October.

You can use these dividends for whatever you want. You can reinvest them into more preferreds or use them to treat your spouse to sushi (as I do). 

Now imagine you built up to $10,000 in MIND.P at 13%. Then you would receive $325 every quarter. I don’t know about you, but that is some adult money. That’s life-changing cash flow.

The only thing more life-changing than dividends is growing dividends from the ground. By combining these two methods of wealth creation, you are setting the framework to survive entirely off the Earth and the power of compounding. Good Luck!

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