If you are on a quest to achieve self-sufficiency, it can be like a never-ending cycle of learning. You are always looking for ways to become more self-sufficient. And, it is surprising where you can find your inspiration. In this blog post, we are going to take a look at some of the homesteading lessons you can learn by mirroring the stock market. So, let’s take a look…
Homesteading Lessons You Can Learn From The Stock Market
So, how should you mirror the stock market when homesteading? Well, there are three key things you can take from the stock market. These are as follows…
- Make sure you create a diverse portfolio
- Opt for some stock that is low risk but sure to grow
- Add in some stock that is high risk but will give you a big reward
If you follow this three-step approach, you will certainly find it easier to achieve self-sufficiency.
Diversification
Let’s begin by looking at diversification. If you ask any investor, the key to their portfolio will be to diversify. Not only does this mean investing in different stocks, but also it can mean bringing other investments into the mix too.
For instance, if you research investing in real estate v stock market, you will see that the two are different. The stock market is deemed more volatile while real estate is usually steadier. Savvy investors will invest in both options so they can build a more stable portfolio. This is the sort of thing that you need to do when homesteading.
A diverse portfolio will protect you from complete failure. If you don’t have this, you will not be protected from extreme highs and lows. Yes, you may get those moments whereby you spend a couple of hours in the stand and you end up shooting a massive doe that provides you with tons and tons of meat. However, you could have an awful season, where you end up eating tag soup week in week out and spending time sitting in the tree seeing absolutely nothing.
These extremes are no good. Instead, by thinking like a stock market investor and building a diverse portfolio, you will ensure you have a backup for all scenarios so you are never staring down the barrel of complete failure.
One option to consider would be a best investment app. These apps allow you to keep track of your stock portfolio as well as buy and sell at the click of a button.
Add Low-Risk Stock
All investors invest in some low-risk stock. The lower your risk the better your chances of profit. Homesteading works the same way. Sometimes it is better to make purchase decisions that are less risky and cost less. This is especially true if your return on your investment could be potentially higher. It is a regular practice in the stock market game.
An example would be buying chickens. The initial investment is relatively small but if you sell the eggs, and even baby chicks, your return may be greater. It is worth the risk.
Add High-Risk Stock
Sometimes, like in the stock market, we purchase high-risk stock. We do so because we are willing to take some risks. This is exactly why so many investors are looking to invest in SpaceX, as soon as it becomes publicly tradable – because it will be high risk but with the opportunity for huge profits. You can click here to learn more about the SpaceX Börsengang (initial public offering) if you are interested. Homesteading works the same way. Buying equipment like tractors or combines is a large investment. Large investments mean taking the risk of spending a lot of money to attempt a bigger return.
If you purchase a combine for your fields and don’t use it, you lose money. It would have been a bad investment. However, if using the combine makes your homestead more productive quicker, you have the potential to make a higher profit on your harvest. That’s the game of buying high-risk stock in the stock market. You take a chance and hope for a good return. This relates to our large purchases during homesteading.
As you can see, while the stock market and homesteading may seem worlds apart, there are actually a number of important lessons you can learn by studying the stock market. In particular, by assessing your attitude towards risk and building a diverse portfolio, you can achieve more on your quest for self-sufficiency.
