From Dirt to Dividends 3: Use Insects and Business Development Companies to Supplement Your Homestead

Do you want to spend your retirement in a major metropolitan city with smog, cars, noise, and rude people? I sure as heck don’t. That’s why I am planning my escape from the city now.

However, just because I plan to retire to a homestead doesn’t mean that I will be broke. In fact, I am going to be rich as hell. I will use my knowledge of living off the Earth and investing in the stock market to ensure my income increases every year. 

Welcome back to the From Dirt to Dividends series (part 1, part 2), where I discuss living off the Earth while becoming wealthy. Let’s dig into using beneficial insects and business development companies (BDCs) to build wealth on your homestead.

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What are beneficial insects? The creator made everything work in harmony. We can use insects to balance our homestead and nature in general. We can also help others, turning a profit in the process. 

I wrote an article titled “Harvest Beneficial Insects for Passive Income,” which describes some insects we can use on our homestead. Let’s review.

Bees. Bees are probably the best insects to use on our homestead. First, you would have to get over your fear of bees, but after that, you can exploit them to grow your business.

Bees give us honey, which we can use to consume or sell. You can also sell beeswax, pollen, and propolis. We can derive even more revenue from bees, including bee venom therapy and pollination services.

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Bees are a great option if you want to earn money from insects and help out nature—this would be the first place I start my insect journey.

Butterflies. Butterflies are a huge deal, especially for weddings. They are more challenging to cultivate than bees, but that may give you a “first-mover” advantage in your area. 

Worms. Do you love using compost to grow your garden? We can use worms to expedite our composting conquests. We can also sell our composts, worms, or the leachate they produce. 

Crickets. There are many uses for crickets, but the main one is to feed other organisms such as humans, birds, bait, and reptiles. Crickets don’t take up much space as worms. 

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Other beneficial insects. There are many beneficial insects to raise for various reasons. Some of them include silkworms, ladybugs, praying mantis, cockroaches and mealworms. 

Rent space to beekeepers. If you have a ton of acreage, you can rent space to other beekeepers. This is an excellent source of passive rental income. 

From bees to BDCs. Now that we are earning money from our insects, we need to invest it into the stock market. Remember, we want to invest as much of our active income to convert it into passive income. 

What are Business Development Companies? BDCs are corporations that make loans and invest in small to medium-sized businesses. BDCs were vital lenders after the pandemic, giving companies much-needed cash flow.

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BDCs are unique from banks because they also can take equity stakes in companies. As I discussed in “Debt vs. Equity,” understanding these two concepts is vital to your investing success. 

Because BDCs sometimes take equity stakes in companies, BDCs can benefit when the company performs well. As the fortunes of the various companies increase, so do the BDCs’ prospects.

How to invest in BDCs. Luckily, it’s easy to invest in BDCs because they are akin to high-yield blue-chip stocks like Altria (MO) and Phillip Morris (PM). BDCs pay massive dividends (6-8%) and grow slowly.

Thus, you can set up monthly deposits into BDCs, so you can dollar-cost average without much fuss. You don’t need to micromanage your BDCs very often. 

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I use STASH to invest in my favorite BDCs: Owl Rock Capital Corps (ORCC) and Ares Capital Corp (ARCC). I also invest in another BDC via Wells Fargo: Capital Southwest Corp (CSWC).

There is also a dividend ETF that focuses solely on BDCs: VanEck BDC Income ETF. If you want exposure to BDCs, without picking individual companies, this is the route. 

Putting it all together. Investing in BDCs is very similar to dividend growth investing. You don’t have to micromanage your reinvestments like with income investing. 

As we sell our insects and insect products, we can just deposit our cash into a checking account and have STASH do the rest. We can also build a BDC investment pie on M1 Finance. 

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With insects and BDCs, we can ensure our dividend portfolio and farm are growing at a solid rate. Investing in BDCs will remove you from the computer and give you time to grow your insect business.

Don’t forget that there is a learning curve to dealing with insects. Thus, once you learn the process, you can teach the process. 

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You can teach your experiences on YouTube, on blogs, and in online courses. Plus, if you can throw in investment strategies, you will offer a truly unique voice on the internet.

Conclusion. Not too many people can speak farm language and stock market vocabulary. However, if you can learn both, nothing can stop you. 

You can make money from the Earth that you invest into growing your income forever. What a fantastic dirt to dividends story. Until next time, good luck!

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