I’m feeling mighty wealthy today. That is because I have dividends coming in from all sorts of high yield products, such as closed-end funds and preferred shares.
Currently, I am still working; however, I will retire, and my dividends will continue to pour into my accounts one day. With dividends incoming, I can spend my days quietly on my homestead with my wife.
Welcome to the From Dirt to Dividends series (part 1, part 2, part 3, part 4, part 5), where we prepare ourselves for homesteading by creating an income portfolio.
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Today, we have a great show discussing vermiculture, better known as “worm farming.” Yes, you can harvest worms to make a great living on your homestead. We can invest profits from our worms with high-yield blue-chip companies to create a high-yield dividend growth portfolio. Let’s begin.
What is worm farming? I read “How to Start a Worm Farm Business” in preparation for this article. A worm business is where you breed, grow, and sell worms or worm by-products.
Some products from worms are worm castings, worm tea, composting, and the worms themselves. The book is fascinating because I never knew how vital worms are to the environment.
Worm by-products could be the best natural fertilizer on Earth. In particular, we can use worm castings to help grow healthy plants more resilient to natural forces.
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How to start worm farming. There are four parts to a worm farm: worm bedding, worm food, worm bins, and worms. You have to understand how worms function to keep them safe from the food they harvest.
The worm bedding is the material you place on the bottom of the worm bins. This is where the worms rest after eating during the day. We mustn’t cover their entire worn bin with food.
Sometimes, different food combinations can heat up as it decays, causing the worms to overheat in an acidic environment. It’s a good practice only to fill half the tray with food; therefore, the worms can escape to the safe side in case of danger.
How to make money with worms. You can breed and sell the worms to composters, gardeners, and fishers. Healthy worms are always in demand, and plump worms for fishing bait can fetch a premium.
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You can also breed your worms to make a worm farm. Here, you focus on harvesting worm castings and worm tea. Gardeners call this “black gold” because it is some of Earth’s best, most organic substances.
You can sell the compost materials created by worms. Worms can eat half their weight every day. The compost will have worm castings throughout the soil. High-quality compost is always in demand.
As we start to turn a profit from our worms, what should we invest our money into to keep generating cash flow?
High-yield blue-chip companies. If you love the idea of dividend growth investing but want a higher yield than 3-4%, I’ve got the solution for you.
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High-yield blue-chip (HYBC) dividend companies will not grow at fast rates. These companies are mature and in mature sectors. Most of these companies fall into energy, tobacco, and business development.
Dividend growth investing differs from income investing because of the focus on growth. With DGI, you want to create a nest egg that produces income. With income investing, you want to recreate a paycheck.
High-yield blue-chip DGI gives us the best of both worlds. Income investing is not for the squeamish because it is highly correlated to interest rates.
HYBC are not as sensitive to interest rates because they are already mature companies. Usually, growth companies do not fare well in a high-interest rate environment. HYBCs are solid companies that many consider “value.”
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My top 10 high-yield blue-chip companies. These would be my selections and approximate dividend yields if I were to start an M1 finance pie with ten HYBC.
- AT&T (T) ~5%
- Verizon (VZ) ~5%
- Philip Morris (PM) ~5%
- Altria (MO) ~7%
- British Tobacco (BTI) ~7%
- Kinder Morgan (KMI) ~5%
- Antero Midstream (AM) ~7
- Owl Rock (ORCC) ~7%
- Ares Capital (ARCC) ~7%
- Abbvie (ABBV) ~5%
I would feel confident investing in this portfolio at all times. I could literally send my money to my M1 Finance as I receive it. I wouldn’t even need to check on this account much.
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Investing for the long-term. These companies are top-rated and are on pretty much all the investing apps. You can invest as you wish, which contrasts with other high-income products like closed-end funds and preferred shares.
Over the long term, you want to create a high-yield nest egg that produces a great paycheck. You could probably average growth at 3% annually and 5-6% dividends.
If you could live off of 4% dividends, you could still reinvest 1-2% to continue building your portfolio over time.
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The good part about these companies is that you trust their business models. They are not always trying to evolve new ideas like Apple (APPL), Microsoft (MFST), and Amazon (AMZN). These growth companies are great for other portfolios, but we want small growth and significant income today.
Combining worms and blue chips. Our worm business should produce steady profits for us. It doesn’t take much money to start a worm business. Once you buy your first batch of 500 worms, you can breed those into thousands of worms.
Thus, if done right, you can be profitable rather quickly. As soon as you have a nice rhythm of cash flow, I will open an M1 Finance portfolio with my HYBCs. I would transfer most of my profits to M1 Finance at the end of the money.
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You can also invest some of your profit in a Cash App portfolio with the same stocks. This would allow you to use those dividends with your Dividend Debit card. While M1 Finance would be for the long term, receiving AT&T and Verizon dividends on the 1st of February, May, August, and November are very nice!
Conclusion. I think raising worms is one of the best things someone could do for the environment. Worms define sustainable living as they help the Earth remain balanced.
There will be an even greater demand for high-quality worms in the future. Society can use worms to convert our waste into “black gold.”
We can use “black gold” to fund our high-yield blue-chip dividend growth portfolio. Life is good when you understand how to leverage nature and finance to build a great future. Good Luck!
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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
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