I Don’t Just Want a Nest Egg… I Want Chickens

My husband grew up on his grandpa’s farm.  From this experience we have several “grandpa-isms” in our house.  One of them is “I don’t count my eggs… I count my chickens.”   That’s a pretty smart man.  The more chickens you have the more eggs you will have.  It doesn’t really matter how many eggs you have right now.  If you want more eggs get more chickens.  The egg part will take care of itself.

So what does that have to do with money?  Think about your nest egg.  A lump sum that is available for you to use in retirement.  It’s your retirement savings.

Now imagine if instead of an egg you had a chicken… an egg laying chicken.  Wouldn’t that be better?

Our egg laying chicken in this case is a passive income source.  Maybe a rental property or a business that produces a passive income… or a blog.  Anything where money comes in where you aren’t “working”.   That’s a chicken.  A nest egg producing chicken.

Not to say that you couldn’t also have a nest egg.  It would be a good idea to get on track with building your nest egg before you start buying chickens.  Why?  Because owning chickens doesn’t always go as planned.  They have more risk than a little egg does.  They need to be fed.  They get sick.  They need attention.  None of that happens with your egg.  Your egg just sits there.

Example:  I have a rental property.  From this property I get a few hundred dollars a month in income.  That’s a chicken.  Each month that chicken flavored rental house lays an egg worth a couple of hundred bucks.  I like that.  But there is more risk there than if I had an investment that paid a monthly income of the same amount.  Why?  Well, not only do I have to deal with the housing market going up or down.  I also have to deal with the rental market going up or down.  Ok, well… market fluctuations are part of any investment.  However, it doesn’t end there.  I have the risk of a bad tenant.  I have the risk of repairs.  I have the risk of a bad property manager or handyman.  I have the risk of fire or flood.  I have a whole host of risks beyond just market risk.

Just this year repairs have eaten up 5 months worth of eggs.  That’s not something I would have had to deal with if I had stocks instead of rental property.

But just because they can be more risky doesn’t mean that they don’t have great value.  You just want to make sure you can handle that risk.  So once you are on track to have your nest egg start thinking about your chickens!