What Chicken Farming Teaches Me About Passive Income

charlie_imageAs I write this post, D.C. is getting pounded with 30″ of snow, and I'm sure it will have the entire city on lock-down for days! In my neck of the woods (the Midwest), we probably have about 3-5 inches of accumulated snow residing on the ground, and our temps have been varying between -8 to a high of 30 degrees. It hasn't been anything super catastrophic, like the meteorologists want you think, but it is cold.

With that said, the cold temps have had a huge affect on my chickens. My hens have decided to close up shop on egg producing and are doing everything they can to conserve energy and heat. I have about 30 hens and over the last week I've been getting 0-1 egg per day!

chicken farming and passive income

As I've been writing about in my passive income stream report, I rely on my egg sales to supplement one of my income streams. I've been using these egg sales to feed my lending club and Schwab monthly income investments.

So, as I've watched my chickens go through this low egg producing season it got me thinking. How does this relate to passive income streams? What can I learn from this?

Here are a few things that winter molting in chickens has taught me about passive income streams:

  • Analyze the environment – with my decreased egg production I've determined that the cold, decrease in sunlight (length of day), and also losing a few chickens to predators has affected my overall production. In your income streams you need to look at what is causing a decrease in your revenue. It could be the market, increased competition, lower demand due to seasonal trends, or price pressure due to unforeseen circumstances (i.e. predators). Regardless, it is important to spend time on investigating what is impacting your overall performance and not just sit back and watch your income stream wither.
  • Make adjustments based on your analysis – in my example, I installed a few heat lamps, heaters, and added some additional fencing to keep out predators. A lot of these adjustments took a little time and money to do, but can be well worth it if I want my income stream to continue. Consider what adjustments you need to make in your income streams and make adjustments. Do you need to make some pricing adjustments, re-balance your dividend portfolio, market your product a little more, or adjust your product prices to be more competitive?
  • Lock in savings or profits when you can – if I can capture a good deal on corn or protein to feed my chickens then I want to bulk buy this to save money. On the revenue side, if my prices are moving up and to the right, then it might be smart to see if I can establish contracts with people. Take for instance, I'll sell 12 dozen eggs to an individual for the next 3 months at $4/dozen versus $4.50/dozen. This will help me lock in $4 in case there is a big fluctuation in prices down. What about your existing passive income streams? Are prices moving up and to the right? Think outside the normal box and consider using contracts or dollar cost selling to sell your product or investments as they move up and to the right. This trajectory won't last forever!
  • Passive income streams take continual work – a true passive income stream usually requires a majority of upfront work, and the continued (small amounts) of upkeep on an ongoing basis. Don't think that just requires a little initial work and then forget about it. In my chicken examples, I can't just stand up a chicken coop, buy some chickens, and plop down a months worth of food & water in there coop and expect to get eggs for the next 30 days with no work. No! I have general maintenance, cleaning, and inspecting of my birds. With your passive income streams consider keeping enough wiggle room in your daily schedules to account for regular maintenance that is needed to keep them profitable.

As I've been raising backyard chickens for the last five years I've seen year after that winter egg production drops every year. It shouldn't come as a surprise. Winter comes just like drops in passive income streams. It is a matter of how you adjust and bounce back.

I'd love to hear from some of our readers on how you've made adjustments to you winter seasons in your passive income streams. What adjustments have you made?

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