Understanding Your Investments - A Cow Analogy by Reg
Written by Regina Hocking, Financial Adviser & Director of Rebel Wealth Management Pty Ltd.
This whole idea came about while I was trying to teach a concept to my Dad years ago. We were talking about investment performance and that there is a difference between income and growth returns. I could see the usual financial terms weren’t quite clicking. So, I shifted gears and said, “Imagine your investments are cows. Even when there is a drought and the cows are skinny (value down) they can still pay milk money (dividends)". That’s when his eyes lit up and suddenly, it all made sense. Although now he loves asking why his cows aren't fatter? All. The. Time. 🙄😂 Love ya, Dad!
Let me tell you a little something: your investment portfolio is like a well-run farm.
And in that farm, we have a diversified herd of cows.
You’ve got dairy cattle, beef cattle, and a few clever hybrids. Each plays a role and together, they build resilience for the long haul.
Dairy Cattle = Income Based Investments
These are your milk producers: they can pay regular dividends or interest payments. They're steady, reliable, and keep cash flowing through good seasons and bad. These could be income focused equities, term deposits or cash products.
Beef Cattle = Growth Assets
These beauties take longer to mature and put on luscious weight as they grow. In the long term, we sell these cows when they are ready. Think global shares, vacant land you bought with good intentions or collectable cars, they might not pay you today, but hopefully they’re building long-term value for tomorrow.
Hybrid Herd = Balanced or Strategic Investments
These are the flexible ones, they give you some income and some growth potential. They’re your all-rounders, helping balance out the paddock when seasons shift. Generally, more blue-chip style Aussie shares or diversified assets will provide both.
Why Diversification Matters: Weathering Market Storms
Markets are like the weather: unpredictable. There’ll be droughts (downturns), floods (overheating), and ideal seasons too. But when your paddock has different types of cows, you don’t go bust when one part of the herd struggles.
And just like a smart farmer, you don’t sell all your cows the moment a storm rolls in.
You plan ahead, build cash buffers, and ride the cycles knowing each cow has a job, and together, they keep the farm going strong.
💡 The Rebel Wealth Mindset
At Rebel Wealth, we help build herds that make sense with the right mix of income, growth, and flexibility, so you’re not relying on a single cow to do all the heavy lifting.
It’s not about timing the weather. It’s about preparing for it.
So… what’s in your herd?
If this article has sparked your interest or you're seeking a dedicated financial (herd) adviser to help you soar toward your financial goals, you can book a complimentary discovery call here: Click here to take the reins on your financial future.
Regina Hocking
Director | Financial Adviser FChFP, GradDipFinPlan
Rebel Wealth Management Pty Ltd
Authorised Representative 001234469