The Hidden Math of Farm Success
- Grant Wiese
- Jun 9
- 2 min read
SW Financial Literacy
The Hidden Math of Farm Success
Your Financial Destiny
You have heard the sayings:
Don’t put all your eggs in one basket.
Don’t go all in.
Diversify your risk.
Have a Plan B.
We all know it’s bad advice to walk into a Las Vegas casino and put every dollar on black. The odds are stacked against you, and betting everything on the first spin isn’t exactly a good time. At the very least, spreading your money around lets you stick around longer and enjoy the ride—even if you know you’ll probably lose it all by the end of the weekend.
We understand that diversification is a smart move in so many areas of life, especially in finance. If you empty your checking account and all your savings into a single stock, you’re basically making the same bet as going all in on black. That’s why retirement accounts are spread across various funds—to protect your future.
A Simple Scenario
Imagine you’re playing both Monopoly and The Game of Life at the same time, while everyone else at the table can only play one. They’re stuck in one game, but you can move money between both to your advantage.
That gives you a huge edge.
Let’s say you pull a low-income career card in Life—you can use Monopoly money to cover the gap. Or, if you land on Boardwalk in Monopoly and need cash to buy it and build, Life money can help you take the leap. That opportunity might never come around again.
"But It Takes Money to Diversify"
I can already hear the objections:
“It takes money to diversify a business.
“You don’t get double the money when you start farming.”
That’s true. Diversifying is hard.
But if you don’t have extra capital, you do have two major advantages:
Diversification on the farm often includes equipment and resource overlap.
Sweat equity and hard work cost time, not cash.
Young producers who are long on time but short on cash should focus on using sweat equity to add revenue streams. That’s exactly what I did with my first farm. My time and labor helped it cash flow from Day 1—and that success helped me jump into a much larger farm just two years later.
Why It Works
Diversification helps you gain efficiency through resource overlap, and it opens up new income streams with lower downside risk.
Let’s break it down:
1. Grain farmer = not diversified
2. Grain + livestock farmer = diversified
By diversifying, your odds of a “Big Loss” drop from 50% to 25%—thanks to offsetting cycles across industries.
The best financials I’m reviewing right now=Row crop farmers with cattle.
Crop cash flow is weak, but cattle are selling at all-time highs. I’m watching this play out in real time.
Was it easy to get there? No. But the hidden math of farm success is clear—you’re better off than putting everything on black.
Have a great week!
Grant
