Unconventional Strategies for Financial Growth
While the world of finance is often associated with fast-paced markets, cutting-edge technologies and high-risk investments, there is a group of individuals who approach investing in a unique and more traditional way—the Amish. Investing like the Amish thus needs further explanation.
In this article, we will explore the principles and strategies behind Amish investing and how you can apply them to your own financial journey. Investing like the Amish – you might be surprised. Additionally, I loved this book by Erica Wesner on this subject too.
Embrace Simplicity
The Amish lifestyle is characterized by simplicity. This principle also extends to their approach to investing. Instead of chasing complex investment schemes or constantly seeking the latest trends, Amish investors prioritize simplicity and stability. By focusing on investments that they can understand and control, they minimize risk and ensure long-term financial stability. This makes me think about my investments – are they simple and easy to control?
Invest in Tangible Assets
You must be able to physically touch them – there is something real about that. Unlike many modern investors who primarily focus on stocks, bonds and other intangible assets, the Amish prefer tangible assets. They often invest in farmland (real estate) and physical businesses. By investing in these tangible assets, they have a sense of security and control over their investments. Additionally, these investments often generate steady cash flows, income for their families and provide a hedge against market volatility.
Community and Cooperation
The Amish community places a strong emphasis on cooperation and mutual support. They often invest collectively in community projects or businesses, pooling their resources and sharing the risks and rewards. This approach not only strengthens their sense of community but also spreads the financial burden and enhances the chances of success.
Patience and Long-Term Perspective
Patience is rarely seen as a virtue in business anymore – it’s all about high energy results. Conversely, Amish investing is characterized by patience and a long-term perspective. They are not so interested in quick profits or short-term gains. Instead, they focus on investments that will provide long-lasting income, value and sustainability. By just being patient, they can weather market fluctuations and capitalize on the compounding effects of long-term investments.
Avoid Debt and Interest
The Amish prefer to adhere to an avoidance of consumer debt and interest. This alone sets them apart from conventional investment practices. They believe that debt ties them down and adds unnecessary risks. Instead, they save and invest their own money, enabling them to maintain control over their financial future. By adopting a debt-free approach, they avoid the burden of interest payments and reduce financial stress. This might be simple, but it’s far from easy. Hats off to this generational Amish discipline.
Diversification within their Means
While diversification is a widely recognized investment strategy, the Amish practice it within the limits of their lifestyle and beliefs. They diversify their investments by engaging in various income-generating activities such as farming, carpentry or retail businesses (or a combination of all). This diversification spreads their risk and ensures a stable, multifaceted income stream.
Prudent Risk Management
Amish investors are inherently risk-averse and prioritize preserving capital over chasing high returns. They conduct thorough research and due diligence before making any investment decisions. By carefully evaluating the risks and potential rewards, they make informed choices that align with their values and financial goals. It’s not unusual for the Amish to use the services of an “English” (non Amish) broker and advisor to assist them with the purchase of farmland. This avoids them getting taken advantage of by the complexities of non-Amish transactions.
Conclusion – Investing Like the Amish
Investing like the Amish offers a fresh perspective on wealth accumulation and financial security. By embracing simplicity, investing in tangible assets, promoting community cooperation and adopting a patient approach, you can apply these principles to your own investment strategy. Avoid debt, practice prudent risk management and diversify your investments within your means. By incorporating these Amish-inspired strategies into your financial journey, you can cultivate long-term stability and growth. Investing Like the Amish might just be a perfect match for your temperament and life outlook. It’s worth a thought.
Cheers
