From Dirt to Dividends 2: Use Livestock and Closed-End Funds to Supplement Your Homestead

Going off-grid is a fantastic accomplishment. However, building a homestead close to the city is just as awesome. You get the benefits of farm living and still have a Wal-Mart nearby.

This is part 2 of my Dirt to Dividends series (Part 1), where I discuss growing our farm and retirement nest egg concurrently. Today, we will look at livestock and closed-end funds. 

Why Livestock? If you want to be self-sufficient, you’ll need to grow your own food source. In part one, we talked about gardening. But, many of us eat meat and eggs as well. The book “The Homesteading Encyclopedia” gives us a look at some valuable livestock we can raise.

To Be Truly Free: You’ll Need $20,000/month in Passive Income

Chickens. Chickens will be our most popular animals because we can raise them for eggs and meat. They eat leftover food, grass, and bugs. 

Geese & Ducks. Geese and ducks also lay eggs. They require more space than chickens. If you want your ducks to be happier, give them a water source so they can swim.

Rabbits. Rabbits are suitable for your new farmers as they are docile. They also consume garden leftovers and are easy to breed. Rabbit meat is healthy for us to eat. We can use fur from various rabbits to make yearn and pelts. 

Pigs. Do you like bacon? I love bacon but probably wouldn’t want to raise pigs. Pigs eat scraps from the table—reducing the cost to feed them. We can have a butcher slaughter them and return the meat and bacon to us for consumption.

The Value in Commodities 

Sheep. Sheep are low maintenance and graze on our grass. We can sell any excess wool. 

Goats. Goats take up less space than cows but can give us meat and milk. Goats eat herbs, trees, and bushes. Goat milk could be easier on the stomach than cow milk, and their meat is lean, red meat.

Cows. Cows require a significant commitment from our farm because of their size. We need to milk dairy cows multiple times a day. Although cows require a large commitment, they can give us a huge return on investment in milk, meat, and offspring we can sell. 

Livestock and your farm. Of course, you want to pick the best livestock to meet your farm and time requirements. I believe chickens are a must for most farms—maybe add some rabbits, goats, or sheep.

Once we adjust to our new livestock, it’s time to take our excess wool, fur, milk, meat, eggs, and offspring to market. In Part One, we talked about preferred shares as our investment choice. Today, we will turn our dollars into closed-end funds.

I Have Everything I Want in Life… and Then Some

Why Closed-End Funds? CEFs are similar to dividend ETFs. However, CEFs have a limited amount of shares that don’t automatically increase with an inflow of cash. This gives CEFs a Net Asset Value (NAV).

Many CEFs use leverage to give us out-sized dividends. Leverage is good when it’s good and bad when times are hard. Prepare yourself for the bad days, and view them as buying opportunities. 

There are tons of CEFs across all different sectors. There are CEFS for real estate, infrastructure, and bonds. One of the main advantages is that we can dollar-cost average into them over time. 

We want to monitor our buying habits with preferred shares, only buying when we get amazing deals. With CEFs, we can set a great investment strategy to keep buying periodically. 

How Would You Invest $300,000?

CEFs also give us options to buy monthly-payers. You can build a monthly paycheck just from CEFs. Another excellent option for CEFs is tax-free bond funds. So potentially, you create an entire income stream where you don’t pay taxes. Amazing. 

How to invest in CEFs. Now that we have livestock, we may not have much time to track the market. However, we want to get the best deals when we invest. The best solution would be to use a brokerage like M1 Finance.

With M1 Finance, I can create a portfolio (they call it a “pie”) that purely holds monthly paying CEFs. I can drop my cash into the one pie, and they will automatically spread my money across my stocks in the pie.

Over-Budgeting 2: Low Expenses, High Income

Even better, M1 Finance’s algorithms will find me the best deals of the day. So, I will be getting the highest yield of the day when I add my cash. The only issue is that if I see a tremendous individual deal, it’s challenging to get my money where I want it precisely. 

But that’s why we keep multiple brokerages like Wells Fargo so that I can buy great deals one by one. How do your livestock and CEFs look together?

Living on livestock & CEFs. First, we build our M1 pie. Then we head to the market to sell our wares. Once we get cash for our eggs, fur, wool, meat, and offspring, we deposit it into our checking account. 

We then go into M1 Finance to transfer money into our pie. M1 Finance does all the heavy lifting from there. As you can see above, my M1 Finance pie has all monthly-paying securities. The closed-end funds are UTF, UTG, XLFT, PFFA, PDO, PTY, and NVG (tax-free).

Over-Budgeting: You Can Only Cut So Much Before…

I love this pie, which yields about 6% because I added other securities like JNK (bonds) and O (REIT). Each month, our income can grow by adding more and more cash from selling our products. 

Eventually, we can live entirely on our dividends. It may be years away, but even having a small cash flow from dividends is life-changing. 

My wife and I are close to reaching $1,000/month in dividend income, and I can tell you it is an amazing feeling. Knowing that you have an additional $1,000 coming in from “the sky” feels heavenly. 

The Woman’s Guide to Investing

Conclusion. Dividends make you feel like there is always someone there to help you. Our goal is to convert all of the income from our livestock into dividend income.

This way, if things get hard on the farm, we always have a source of income. If you pay expenses directly from your livestock proceeds, you will ALWAYS have to sell your wares. You’ll be on the hamster wheel, just like the workforce. 

We want to break the cycle by always converting livestock income into dividends. Then we can live on the dividends, eventually freeing ourselves from selling our wares. I can tell you that dividends will be the best thing to happen to your life.

Can you imagine living on a farm, growing your crops and livestock, and having $4,000-$6,000/month coming in from dividends? That’s the goal!

1. PDF of the Month: 505 Takeaways from 101 Books (pdf)
2. Free PDF Downloads: Download FREE PDF books here
3. Financial Mindset: Become CEO of Yourself 2 (Free 196-Page PDF)
4. Retirement Planning: Your Retirement Planning Guide 2 (Free 255-Page PDF)
5. Investing: How We Plan to Retire on Dividends 2 (165-Page Free PDF)
6. Cryptocurrencies: Counting on Crypto 2 (Free 159-Page PDF)
7. Real Estate: Financial Independence through Real Estate 2 (Free 123-Page PDF)
8. Business: Retire Rich, Retire Comfortable with a Business 2 (Free 185-Page PDF)
9. Latest DGWR: Don’t Gamble with Retirement 6 (Free 409-Page PDF)
10. Everything!: The Biggest Book on Passive Income Ever 2! (book)(Web Edition)(Art Edition)
11. I bought a Kindle Oasis: Check it out on Amazon
12. Read My Books for Free: Free Kindle Books Schedule
13. Crypto Exchange: My Favorite Crypto Exchange VOYAGER (Join Voyager)
14. Kindle Unlimited: Why I Finally Subscribed Kindle Unlimited (learn more)
15. Book Reviews: 505 Takeaways from 101 Books (pdf)
16. Writing: Can Grammarly Make You a Better Writer? 
17. My Favorite Chromebook: The Ultimate Chromebook (direct)
18. Follow us: On our Facebook Page and Join our Facebook Group
19. Monthly Dividend Tracker (XLSX): Check it out on Etsy
20. For more detailed analysis, join my Youtube: MFI YouTube Channel

Monthly Dividend Tracker Template: Buy on Etsy

Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.  I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing