Unsure where to invest your money? I experienced this same feeling and so researched into the best options available. It can be overwhelming when it comes to choosing the correct investment as investing is a big deal, and you want to get it right. After thorough research on the topic, I’m here to tell you that Livestock investment is an option for those of you trying to improve your monetary assets in the future.
Why is Livestock farming a good investment for you?
Livestock investment, put simply, is buying an animal or plant-based resource from a farmer, which will then grow under their care, and be prepared ready for sale. The farmer will buy back the asset when the resource has grown at harvest, making a profit on your purchase. The interesting part of this process is that you earn profit from real farm assets; this creates wealth for you and the farmer. This is the indirect way of investing.
You may be thinking, why does a farmer need investment? They have the skills to manage and grow their assets, but they need more working capital. This is where the investment comes in, and you are guaranteed to get a return. This is a minimal risk investment, so it really begs no questions about whether this is a good idea.
If you want to invest directly, you buy the asset as your own and then sell it to a buyer.
Let’s go a little further into this topic now and look at what Livestock investment really means, why it is beneficial and if it is trusted.
Investing in livestock: What does this mean?
You can either invest directly or indirectly. Directly involves investing in a farm and investing directly into livestock so that you own it for that time before a sale. Indirect investment is when an investor puts money into livestock owned by others, providing working capital for livestock raisers. In simple terms, you invest by buying livestock or a plant-based asset from a farmer. The asset will grow under the farmer’s care, and then the farmer will buyback this asset when it has fully grown at harvest. The investor, you, makes a profit from the sale. For example, if you were to invest in a pregnant cow, the profit margin is 10-14% in a term of 12 months.
To make it even simpler, ‘Livestock wealth’ – a company that manages the indirect investment, has an investment calculator where you can put in how much you plan to invest, how many years for it, and how it will calculate your return rate for you. The interesting part of this process is that you earn profit from real farm assets at harvests; this creates wealth for you and the farmer. The investment brings liquidity and capital for the farmers, which boosts their productivity. You can invest from anywhere in the world and the profits advertised are guaranteed because of the farmer’s insurance.
One example of where you can do this is the Livestock Wealth Corporation. Livestock wealth, since 2015, has gained over 2,800 unique investors that invested more than R70 million. Investing is as simple as creating a free account on their app. An important aspect and reassurance is the ethical farming they ensure.
Another option is Livestockrewards.org that allows users to purchase livestock from small farmers for investment or charity.
Why should you invest in Livestock?
The livestock industry has steady growth, and it has a minimum risk. For example, with Livestock Wealth, if your asset accidentally died, it would be replaced at no extra cost to you. The Food and Agriculture Organisation of the United Nations, using the statistic if the global population is to reach 9 billion by 2050, estimate that this will increase the demand for high-quality meat. This sector is the largest natural resource use, with 80% of all agricultural land used for animal feed production. This is showing the demand for the products in the livestock sector that you would be investing in. The more the population grows, the higher the demand for food and consumption levels increase. We can take from this that an investment in livestock will continue to create returns as food demand continues to grow.
How do you go about investing in Livestock?
The creator of ‘Livestock Wealth’ wanted to change how the world works and allow people from anywhere to profit from farming in South Africa. For providing this working capital, an investor gets their money back with interest. Livestock Wealth company offer investors a free-range ox, pregnant cow, macadamia nut tree or a connected garden. According to the founder, Shezi, the most popular product in their portfolio is the free-range ox. You can get started by downloading their free app. Another option is Livestockrewards.org that allows users to purchase livestock from small farmers for investment or charity.
Types of Livestock you could invest in
- Cattle – but it is important to consider the breed if investing directly as some cows are more tailored for meat or better dairy produce.
Direct or Indirect Investment: Pros and Cons
There is a lot to consider in deciding whether you want to go down the indirect or direct investment route. Below are a few aspects to think about.
Pros of direct investment are that you are solely in control of the livestock. This means that you buy the animal for example and then you own it and decide how to profit from it, either through sale or use. However, a con of this is that the responsibility to make money lies solely on you and your decisions.
Pros of indirect investment include benefiting the farmer you are investing in, allowing them to boost their work. Another benefit is the guarantee of a product. If the livestock were to die, it would be replaced for you, rather than if you owned it and were solely responsible, like in direct investment.
Cons do include entrusting people with your investment, but this is the same as with any kind of investment. Usually, in all investments and companies, they have to go through many checks. Livestock investment is no different so this adds reassurance.
Can I trust these investments?
Using Livestock Wealth as an example, they are a registered credit provider with the National Credit Regulator (NCR) and registration and accreditation under the Agricultural Produce Agents Act. They also run credit checks on the farmer and their company so that you can trust in your investment. This is similar to many other providers.
Are there any risks or downfalls to this investment?
Whilst many people believe that livestock investment would survive an economic recession as people always have to eat, there are risks to any investment. Perhaps in terms of the rise in vegetarianism, it would mean a decline in meat consumption and livestock assets. However, this is not a massive portion of the world, so it would not have too great an impact.
So, that’s it. We’ve gone through and considered both the risks and benefits of Livestock investment. We hope you’ve found it a useful read and that it will help you make an informed decision.