Income Streams: Thinking Like a Farmer

The average employee receives his salary at the end of the month. He goes ahead to spend it, and typically in the next month (or before then), all the money is gone with nothing saved. He is not enthusiastic about the coming month because the same scenario will play out. The common expression is that the money is already spent before it hits the account. The only thing that can make things better is higher pay, he believes. Soon higher pay comes, and for a couple of months, he gets used to more money. Expenses creep up and it is back to square one, more money.

Somehow, he believes that better days are coming – higher pay through better-paying jobs, promotions, pay hikes, etc; more and more money. Yet year in and year out, the ends stubbornly refuse to meet. Expenses always rise up to catch up with income, threatening to overtake it in some instances. Some have concluded sadly that anything named salary will never be enough. It is a lost battle.

However, when you look at your salary or wages the way a farmer looks at seed, you can turn your finances around. Rather than focus on consumption (spending), you will start to focus on saving and investing. You will be thinking return on investment of your money instead of what it can buy. When you start to think in terms of cash flow and streams of income, it becomes easier to delay gratification.

A farmer chooses the best part of the harvest as seed for the next planting season, not the bottom of the barrel. He takes the seed off the top. He puts aside the seed before he consumes the rest. This means you save off the top, not off the bottom. You save first before you start spending, rather than spend first before you start saving. Often nothing is left to save.

The farmer is patient, and understands the seasons and when to harvest. He nurtures his crops after planting, and harvests in due season. A good investor knows how to keep an eye on his investments and when to take a profit. He reinvests his profit for accelerated returns.

When the harvest comes, the cycle is repeated. He takes the seed for the next planting off the top and repeats the cycle. So seed, time, and harvest never cease. His crop grows larger in the planting season as he plants more seeds and gets more harvest. He does not consume his seed or allow his farm to be overrun by weeds. He is a net producer, not a net consumer. He grows what he needs, not pray and hope for it to come to him. He decides what the next harvest will be by the size of land he puts under cultivation. He does not just hope and pray, he works hard and prays for good weather. He does not leave the land uncultivated and hopes for a bumper harvest.