I love the garden analogy Julie. You're absolutely right that the value of your home grown veggies is much greater than any pale excuse for a vegetable you buy at the grocery store (plus all of the additional benefits such as health and happiness).
The costs of your gardening could come down year after year if you make your own fertilizer (compost) and save seeds from previous harvests. In this way your hurdle amount could be much lower.
What would be ways to reduce the hurdle amount in investing then (aside from finding a better rate)? I been noticing that it's pretty hard to beat 7%.
Thank you for these recommendations on reducing the cost of gardening. I have begun composting and have an update on this process coming soon.
I've also begun saving seeds. It's so funny (sad?!) how I've often believed that bought seeds were somehow superior. That said, perhaps I or others may think of certain companies as being more exciting when they are being talked about and promoted, when in truth, staid companies like those humble seeds I'm gathering from my butternut squash, green pepper, and apples are just as good as those purchased from a shiny catalog.
Also, now that I think of it, efforts in creating a better backyard ecosystem could also lower my annual hurdle rate going forward, as it would hopefully make the garden and orchard more productive.
If you're considering a portfolio return and how that intersects with financial stability, reducing or controlling expenses can help you to live comfortably without needing higher returns to pay your bills (if you're using investments to pay bills). Developing DIY type skills and using what's readily available or easily made (like compost and seeds) can help control costs. Generating income from other sources also helps.
You've prompted me to think more deeply about hurdle rates. The 7% isn't guaranteed but rather an average from the past. The idea isn't so much to find ways to beat that number (that's a separate game) but to consider whether a potential investment in a specific company would deliver more -- and warrant the time to research the investment and take a risk on a lower return with that company.
If projections on this company indicate the return might be 3%, then taking on this risk wouldn't make financial sense. Projections are guesses, but I find them useful in making basic evaluations. For investing, you'd want to set the hurdle rate fairly high to compensate you for the uncertainty -- and possibly prevent you from investing in the stock of companies unlikely to perform better than average.
This feels similar to me to ROI - return on investment. But comparing it to what you've already spent puts it in a different frame. Thanks for this Julie - and Great Photo!
I love the garden analogy Julie. You're absolutely right that the value of your home grown veggies is much greater than any pale excuse for a vegetable you buy at the grocery store (plus all of the additional benefits such as health and happiness).
The costs of your gardening could come down year after year if you make your own fertilizer (compost) and save seeds from previous harvests. In this way your hurdle amount could be much lower.
What would be ways to reduce the hurdle amount in investing then (aside from finding a better rate)? I been noticing that it's pretty hard to beat 7%.
Thank you for these recommendations on reducing the cost of gardening. I have begun composting and have an update on this process coming soon.
I've also begun saving seeds. It's so funny (sad?!) how I've often believed that bought seeds were somehow superior. That said, perhaps I or others may think of certain companies as being more exciting when they are being talked about and promoted, when in truth, staid companies like those humble seeds I'm gathering from my butternut squash, green pepper, and apples are just as good as those purchased from a shiny catalog.
Also, now that I think of it, efforts in creating a better backyard ecosystem could also lower my annual hurdle rate going forward, as it would hopefully make the garden and orchard more productive.
If you're considering a portfolio return and how that intersects with financial stability, reducing or controlling expenses can help you to live comfortably without needing higher returns to pay your bills (if you're using investments to pay bills). Developing DIY type skills and using what's readily available or easily made (like compost and seeds) can help control costs. Generating income from other sources also helps.
You've prompted me to think more deeply about hurdle rates. The 7% isn't guaranteed but rather an average from the past. The idea isn't so much to find ways to beat that number (that's a separate game) but to consider whether a potential investment in a specific company would deliver more -- and warrant the time to research the investment and take a risk on a lower return with that company.
If projections on this company indicate the return might be 3%, then taking on this risk wouldn't make financial sense. Projections are guesses, but I find them useful in making basic evaluations. For investing, you'd want to set the hurdle rate fairly high to compensate you for the uncertainty -- and possibly prevent you from investing in the stock of companies unlikely to perform better than average.
You are amazing!! Your work in gardening and money is something so many can appreciate, and hopefully, relate!!
This feels similar to me to ROI - return on investment. But comparing it to what you've already spent puts it in a different frame. Thanks for this Julie - and Great Photo!