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I just bought a cow in South Africa from my laptop in New York!
I don’t have to lift a finger to take care of it and I pocket the profit when the cow gets sold.
Sounds like sorcery?
It’s called “crowdfarming.”
What the heck is crowdfarming?
And how can it help you diversify your income stream on the road to financial independence?
What is crowdfarming?
It’s where you pay to “adopt” something directly from a farmer, the farmer takes care of it, and then sends you the product.
The benefit of this model is you know exactly where your food is coming from.
Also, by pooling together money from different people all over the world, the farmer is able to start, and take care of, the farm without much upfront costs to him.
It’s like crowdfunding, but for farming!
Dictionary result for crowdfunding/ˈkroudˌfəndiNG/noun
- the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.
- “musicians, filmmakers, and artists have successfully raised funds and fostered awareness through crowdfunding”
If you google “crowdfarming,” the first result brings you to Crowdfarming.com where you pay to “adopt” fruit trees, cows, sheep, etc.
The products collected from these “production units” will be shipped to you when they’re in season.
However, after perusing their website I realized, “Wait, where do I make money?”
It turns out, this website doesn’t help you make money.
It’s merely a way for you to adopt something, have the farmer take care of it, then send you the actual product.
No monetary dividends here.
So how do you make money by crowdfarming?
How to Make Money and Diversify Your Income With Crowdfarming
This is where the magic happens.
Brendan from Your Money Blog’s article talked about how he was investing in cows in South Africa (he’s from there).
Hold the phone.
Invest in cows?
The website he talked about is called Livestockwealth.com.
The website had minimal information but I found a brief description on how I could make money from buying their cows.
You can invest in 2 types of cows.
Pregnant cows and free-range calfs.
Investing in Pregnant Cows
You make money from pregnant cows after they give birth and their calfs are weaned and sold.
From my understanding, and I’m going based on the limited info from their website so please excuse me if I’m wrong, you get the cost of the money you put into the pregnant cow, on top of your portion of the profit from the sale of the calf.
You can choose to either invest again in the same cow or a different cow.
This process takes about 12 months from when you buy the pregnant cow till when the calf is sold.
The website says you can get anywhere from 10-14% returns.
If something happens to the pregnant cow, they will replace it free of charge.
They take care of all the costs related to feeding, insurance, farm labor, etc.
Investing in Free-Range Calfs
For calfs, my understanding is that you buy them and after 6 months of grazing, they’re sold.
You pocket your portion of the profit.
You also get your original money back and can invest in another calf.
How Easy Is It To Buy a Cow?
Making an account took less than 5 minutes.
I spent another 5 minutes going over the list of available cows to buy.
There was a waiting list to buy a pregnant cow, not to mention it cost around 18,700 South African Rand, which is ~$1,400 USD.
So I bought a calf, which was cheaper at 10,980 Rand ($807 USD).
The whole process can be done in under 15 minutes and you can pay by credit card.
It was amazing.
Just like that, I was the proud owner of a cow!
In two days, they sent me a digital certificate of ownership, along with this information of the cow.
I assume November 2017 is the month it was born and July 2019 is the month it will be sold and I get dividends.
Because I bought it in January 2019, July 2019 is 6 months away, which is along the lines of what they said on their website for profit.
My Concerns With Livestock Wealth
1) Expect Discrepancies Between What You Read Online to What You Actually Experience
I think their business model and overall business is evolving and growing so fast that they can’t keep up with demand.
Because the info on their website doesn’t match what this CNN article talked about just last year.
When I asked about the Livestock Wealth app that they mentioned in the CNN article, they said to check their website for more information.
I replied that I’ve been all over their website for days and couldn’t find it.
They then replied that they shut down the app to focus on the website (like you couldn’t have told me that originally bro?).
So expect discrepancies between what you read online and what you actually experience.
This is another example of what you see versus what you experience.
They say they will reply immediately if you message them here.
I messaged them and have never heard back via this instant messaging on their website.
It’s been weeks.
2) Lack of Information on Their Website
I found their website clunky to use.
Not to mention it lacked clear information on how the process actually worked.
There was lack of information on the process of getting my dividends, how the cow is sold, how much money is the cow even being sold for, and will there ever be a detailed breakdown of the cow’s weight, the profits the company made, and my portion of the profits?
I’m assuming the short term answer to all of that is NO.
They’re slow to respond via email, taking up to 2 days to respond to my questions.
They’re faster on twitter, with replies usually within a day.
Again, I think this is because they’re growing so fast they don’t have enough people hired yet to handle the volume of questions, processing, and overall business functions to make the process smoother.
3) Ponzi/Pyramid Scheme?
To me, it smells a little like the Ponzi scheme from Bernie Madoff where they were using new investors’ moneys to give returns to the older investors (also called a pyramid scheme).
To my ears, 10-14% returns off of every cow you buy sounds too good to be true.
That means in 6 to 8 years, your money would double if you just invest in these cows.
Not to mention, if you bought a calf for $800, and in 6 months get a return of $80 (10%), and you use your money to buy ANOTHER calf for another 6 months to get another $80 (10%) return, you’ve effectively made about $160 off your $800 investment in 1 year, a return of 20%.
Too good to be true?
If my math is wrong, please let me know.
At some point, something’s gotta give, you know?
Warren Buffet or my dad once said something like, “In the investment world, if it’s too good to be true, it usually is.”
Which is why I’m hesitant about this whole thing and only investing a little at a time instead of a sizable percentage of my assets.
4) Market Conditions (and Your Profits) Might Change
You can only saturate the market with so much beef.
Either you raise too many cows and the price of beef drops, thus lowering your profit per cow, or you find a way to ship them to other markets that aren’t saturated yet and continue making your profit.
From their website, the free-range cows gets sold to meat companies that, I assume, sell the beef to grocery stores throughout South Africa.
If consumers’ diets change or a disease wipes out the cows, even though the company guarantees us back our initial money plus returns, I’m still doubtful that they can pay us back if they suffer a loss so severe they have to shut down the business/file bankruptcy etc.
Summary: Is Cow Investing For You?
At the time of this writing, Livestock Wealth is brand new (2 years old), and applying a modern concept to one of the oldest investment vehicles in civilization, a cow.
You invest in cows and make money when the cows are sold.
You don’t have to take care of the cows and Livestock Wealth’s farmers do all of the work.
If that sounds like a good way to create a passive income stream that’s not based on stocks or bonds, then cow investing could be for you.
Plus, you’ll have a great topic to talk about at your next dinner party.
Questions You Should Ask Yourself
“Why do I want to buy a cow?”
“How much money can I invest?”
“Will I be alright if I lose all my investments in these cows because of some bad market conditions or business circumstances?”
I wanted to buy a cow because I thought it was a cool and novel way of investing and diversifying my income stream.
There’s a saying that “Wealthy people have at least 7 different sources of income.”
You can now add cows to one of them.
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