Food Storage & Other Adventures in Motherhood

Food Storage as a Financial Investment

by heather

Recently I was reading in Food Storage for Clueless about the idea of food storage as an investment. I just loved the way that the authors, Clark & Kathryn Kidd, explained it and thought that it was an idea that was worth sharing. And just for the record, this is not just an investment plan for only those who are in love with food storage like myself and the Kidds. Investment guru, Andrew Tobias is quoted as saying “People who don’t have time or interest to learn about investing can often make the same return on their money simply by investing in food storage.” More proof that food storage is a good idea for everyone, not just neurotic Mormon moms.

Ok, before you write this off as a ‘crazy scheme’, consider this hypothetical scenario. Let’s say we have two moms, Jessica and Mandy. Jessica invested $500 in the stock market in January. Her stock did so well that she sold them for $750 in October, making a 50% return on her investment. She then took all of this $750 and spent it on food storage. For a family of four, she need 1200 lbs of grain for a year supply. Just to keep the math simple, let’s say that Jessica bought all wheat.  If she orders her wheat and has it shipped to her at current prices (80 cents per pound after shipping), she can get about 9 & 1/2 months (946 lbs) worth of grain for $750. That’s great. Jessica has a good start on her food storage.

Mandy also wants to get started on her food storage. But instead of starting with the stock market, Mandy starts by watching for sales. She waits for a good sale on wheat, and when it hits 51 cents per pound, she decides to buy 946 lbs worth. (Because she likes it when the story problems match up.) With Utah state food tax, that comes to $498.14.

So what’s the difference between Jessica and Mandy? At the beginning of the year they each started with $500. At the end of the year, they each had the same amount of wheat in their food storage. The thing is Jessica had to work a little harder. First she had to pick a stock that would give her a 50% return on her investment (Not an easy feat, even for professional investors.) Then she had to put her money at risk. Sure, in our lovely story problem where the numbers are contrived to prove my point, she gets a 50% return. But she could just as easily only gotten 10 or 20%, or she could have lost money. Plus Jessica would pay state and federal taxes on the profit from her investment, meaning less money in her pocket. She would also have to stockbroker fees that would cut into her profit. And because her total food purchase was more, she would have to pay more in sales tax (I forgot to include Jessica’s sales tax in her total. Oops. Moving on.)

Mandy on the other hand took virtually no risk. She purchased her wheat and was done. What’s the worse that could have happened? Maybe the wheat didn’t go on sale. So she we would have to pay full price, or substitute some cheaper grain like rice. But the wheat did go on sale and she also received a 50% investment on her return, with change to spare. And that wheat will be a resource she can rely on for years to come, when food prices are more likely to rise than to fall. Yes, investing in food storage is not as exciting as making money on the stock market, but you can get more bang for your buck with less risk or experience required. And we are all about being practical here.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Scrappy Theme by Caroline Moore | Copyright 2019 Secrets of a Food Storage Mom | Powered by WordPress