3 Things I Learned From Investing in Cows In South Africa + 10.2% returns after 1 year

3 Things I Learned From Investing in Cows In South Africa + 10.2% returns after 1 year

After finding out about crowdfarming back in January 2019, I started investing in cows in South Africa via livestockwealth.com.

It cost me 10,980 South African Rand (at the time, $807 USD).

After 6 months, the cow was slaughtered, sold for meat, and I got a portion of the profits, a 5% return.

I have since bought 3 cows and sold 2 of them from that same initial investment.

Shown below is the picture of the statement.

graphic showing me investing and selling cows and their worth

However, over this past year to a year and a half since investing in cows in South Africa, here are 3 lessons I learned so you either 1) don’t make the mistake I did, and 2) learn from my mistakes and do better to make more money.

#1: Be Careful of International Exchange Rates

From the picture shown above, you can see that after 2 cows, my initial 10,980 Rand investment is worth 12109.96 Rand.

To calculate the growth, we do this math:

Current worth of investments minus initial investment equals returns.

12,109.96 Rand minus 10,980 Rand = 1,129.96 Rand

Then we will divide the returns by the initial investment in order to calculate the percentage of the returns.

1,129.96 Rand divided by 10,980 Rand then times that by 100% = 10.2%

So that shows I have a 10.2% growth in my investment after 2 cows, or about one year’s worth of investment.

Not too shabby, right?

A guaranteed 10% return is awesome.

Because at this rate, my money would double in less than 7.2 years.

How do you calculate your rate of return till your money doubles?

You can use the “Rule of 72” where you take whatever is your projected return rate, and divided 72 by that number.

Issue with these nice returns

If I were living in South Africa forever, these returns would be GREAT.

Only issue?

I am not living in South Africa.

I live in America.

So my money needs to usable in USD.

If I were to exchange the 12,109.96 Rand back into USD right now as of October 30th, 2020, I would get $745.27 USD.

Remember my initial investment was $807 USD in January 2019.

That’s actually a LOSS of 7.64% from my initial investment.

It didn’t make sense for me to take my money out of the South African cows market just yet for 2 reasons:

  1. I was too lazy to do the work needed to take the money out via international money exchange etc.
  2. Out of my laziness, I wanted to see how far I can take this cows investment experiment, and for how long, and how much money could I make from it

So I reinvested in another cow instead of cashing out and realizing my -7.2% loss.

Even though if I got that money back when I did back in June 2020, I could have used that money to buy stocks that were low in price from the stock market drop, and be sitting on a nice 20% growth right now…

How to use this new exchange rate in your favor

With the drop of value of the Rand to the USD, this means that if you’re trying to convert your USD to buy cows in South Africa, you could actually get more cows NOW than over a year and a half ago.

So if you don’t care about ever moving your money back to America, then yeah, you can now buy more cows because they’re at a discount rate compared to a year ago.

#2: Be Careful of Liquidity

I had trouble moving my sales back to my American bank account.

The issue?

It was so easy to just link my debit card to make the first purchase of my first ever cow.

So 6 months later, I expected it to be that easy to bring money back to my linked debit card and back into my American bank account.

Twas not to be.

Apparently to bring money back to America from South Africa isn’t as easy as bringing money there.

I had to input international bank codes and international routing numbers etc. that I couldn’t be bothered to do because they made it so convulsed and bulky and not user-friendly at all.

So I just reinvested that money back into another cow.

I wish they would make transferring your money back as easy as transferring it there.

So be careful of your liquidity.

Only play with money you can stand to lose forever if something goes wrong.

Only play with money you can keep locked up in South Africa for many years.

#3: Keep Track of Sell Dates To Make Money Faster

Look at the red circle in this picture of my statement of sales and purchases of cows.

You’ll see that there’s a 5 month gap between when I got money from the sale of my second cow to when I invested it.

That was complete oversight on my part and I missed out on 5 months of interest because the cows are slaughtered every 6 months when they reach sale weight.

I have since set reminders on my phone to alert me every 6 months from the date of my purchasing so I can check back to see if money’s available to reinvest in more cows.

This way, I can take full advantage of making that full 10-14% returns annually (or 5-7% returns every 6 months, as reported by the company).

So pay attention to your purchase dates and sell dates to take full good use of your investment cycles.

Conclusion on Cows

If my investment were to get 10% returns every year, I would double my money in about 7.2 years.

That means my initial 10,980 Rand would be worth 21,960 Rand.

However, let’s assume that nothing changes between the Rand to USD currency exchange rate.

That means my 21,960 Rand would be worth $1,351.46 USD if I tried to bring it back to America.

So my initial $807 USD investment would be worth $1,351.46.

That’s a return of $1,351.46 minus $807 = $544.46

$544.46/$807 = 67.46% returns.

That means my investment would only have grown by 67.46% in 7.2 years if I bring that money back to America.

Not ideal.

Just to give you an example, in 7.2 years if I had invested that money in Apple, Microsoft, Netflix, Tesla, Amazon, etc. I would most likely more than double, triple, quadruple, quintuple my money with any of these tech stocks.

But here’s the thing.

If you’re investing in cows in South Africa to diversify your income against future losses, than go ahead.

They say wealthy people have more than 7 streams of income.

Cows could be one of them.

Plus, think of it as investing in the future of South Africa as more South Africans come into money in the 21st century and invest in these platforms to grow their wealth and their country in the process.

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Jack The Dreamer

I'm a dreamer. But you know what? All the best people are. And if you're one too, join the revolution! My blog is about being financially independent and working towards that goal each and every single day so that we can all start living the life we've always dreamed of! Jack the Dreamer, over and out!