How To Grow Wealth (Feat. Cows)

You've recently inherited a cow. Before that, you had nothing to your name. You were hungry. Now, upon acquiring this cow, you can do either one of two things:

1. You eat the cow. You feed your cravings and are full. The steak and ribs are nice. That tongue is scrumptious. When you are done, the cow is done. And you go back to hunger.

or

2. You keep the cow healthy. You take it to a nice field and have it eat good grass. The cow gives you milk. It's not as appetizing as steak but it gets you by. You drink its milk.

Upon realizing you cannot drink it all, you start selling milk. From the proceeds, you decide to buy another cow.

You can either eat this second cow or repeat the same process of selling its milk until you have enough to buy a third cow. (Alternatively, you can either sell the meat of this cow. Hopefully, the proceeds are enough to buy another cow).

The cow is your "Capital". The grass/pastureland is your "Investment". The milk is the "Income" you make passively from your Capital.

When people get money (bonuses, inheritance, casino winnings, etc.), they are quick to eat the capital. But if they save the c(ow)pital by keeping it healthy and investing it, they can use the income to make new capital.

This is the essence of investing. You use what you have to create more. Savings accounts, investment accounts, bonds, shares, property; are places where your cows can thrive and grow and give you more money. You can spend what you earn from these cows, or you can reinvest them to buy more cows that are different breeds (diversification).

Use your cows wisely.