Does old money exist in farming?

[SASKFARMER]

Like I said earlier If the Bank was coming out to meet with potential borrowers most guys with cash don't give a rats ass. So you would have gone to people who borrow money.

I have a friend that farms close to us and he could buy out most neighbors today with Cash. Lock stock and barrel. Yes, he has never been married or gone anywhere.

Here is how it happened, get to know your history.

Back in the 70s land was cheap and guys who bought could double the farm or triple a farm in a few years. Equipment became better and away a farm went. These guys were in the 40s to 60s. They also were of the generation that saved. Then along came the 80s much like we have today. Land went Boom through the roof. We had some that were bought for 15000 total for three quarters and sold for 483,000 a few years later. Yes boys and girls the 80s were interesting. But if land went stupid smart farmers sat back and had lots of land so why buy or rent. Rent also was insane.

In came the stupid interest rate hikes. You could get for your money 15% on Savings. Oh, borrowing was 18% but hey it works, yea the borrowers didn't fair very well.

Take the $483,000. it was a year later $72,450 more. So now you took that and invested again $555,450.00 and so on and so on. Oh, but the taxman had to get some. Yes, he did but you were a farmer where do they make any money. Fertilizer and chem and droughts helped out min tax was paid over the 80s. Also, these guys never were big spenders. Had a good home, maybe a cottage, and a few minor toys.

That original investment could be worth in the end. Well over a million in tax paid CASH.

The 90s on the farm were not a time to spend money and most didn't.

Now these guys are gone and that amount is transferred down it would be like winning lotto 6-49. Some will piss it away some will quietly enjoy the time and play farm.

It's always about the money.

I also said earlier look at this weekends Telemiricle in Sask some farmer is going to always give a little to the cause.

Enjoy the day.

[Sheepwheat]

Interesting thread.

My one neighbor who admitted to have inherited his six quarters, mentioned to me once that the first million was much harder to attain then the next millions. With an ‘S’.

The thing that may be different in this area, is that it had been for most of history, literally a farming eden, with scarcely a blip of production difficulties. So that would have helped too.

Most I would say never inherited so much cash, true enough as they did in land and therefore leverage power. Being a third generation farm, and buying the exact same land over again each generation due to circumstances, tends to slow progress down, because the leverage factor never kicks in.

A thing often overlooked unless you didn’t have it: most farms, even if they didn’t outright get a bunch of ‘help’, according to them, did have help. They just don’t see it much. An example is a farm where he swears he built what he has on his own. Well, looking at rm maps from the sixties before he was born, it shows that his grandpa and dad had ten quarters of land in a block. Land he didn’t have to chase after or fight for. And his wife happens to have an 80 g job.

Another neighbor, very well off, fully admits and shows appreciation that he was very well set up. His dad paid for his first years inputs on 500 acres, co-signed his mortgage, etc. So you kind of have these extremes as well, where some will never see it, others do see it. It’s just interesting.

I’ll throw it out there now. I appreciate that my grandparents came to this spot. I appreciate my dads skills and his ability to make us never feel poor growing up. I appreciate that my mom helped me as much as she could. Just because it wasn’t easy for me, and that it still isn’t easy, because of financial constraints due to terrible circumstances, I want to say I am not bitter. I used to be quite self deprecating because I felt frustrated by my personal situation. But lately I have been coming to terms with it.

Just wanted to throw that out there, because I can see in text, how words could be construed. I ain’t jealous, I ain’t bitter. I just see things from a very different perspective due to circumstances. If you ain’t lived it, it’s hard to see, I get that.

[RTK]

SF3 - exactly... I never voluntarily visited a farm in my 12 year lending career without a reason and pebbles in my pocket to check on inventory or to ensure there was no excuse for the wife not to involved in the discussion.

Most guys that wanted to borrow money found away to come into my office.

Serious investors met advisers not me in the office as well. Why would anyone with a portfolio of any size invest with a lender?

My investment professional had a zoom meeting with my wife and I; my brother meets in person with his professional at least monthly. Pretty sure I know whose business is a priority.

[LEP]

Like I said earlier If the Bank was coming out to meet with potential borrowers most guys with cash don't give a rats ass. So you would have gone to people who borrow money.

I have a friend that farms close to us and he could buy out most neighbors today with Cash. Lock stock and barrel. Yes, he has never been married or gone anywhere.

Here is how it happened, get to know your history.

Back in the 70s land was cheap and guys who bought could double the farm or triple a farm in a few years. Equipment became better and away a farm went. These guys were in the 40s to 60s. They also were of the generation that saved. Then along came the 80s much like we have today. Land went Boom through the roof. We had some that were bought for 15000 total for three quarters and sold for 483,000 a few years later. Yes boys and girls the 80s were interesting. But if land went stupid smart farmers sat back and had lots of land so why buy or rent. Rent also was insane.

In came the stupid interest rate hikes. You could get for your money 15% on Savings. Oh, borrowing was 18% but hey it works, yea the borrowers didn't fair very well.

Take the $483,000. it was a year later $72,450 more. So now you took that and invested again $555,450.00 and so on and so on. Oh, but the taxman had to get some. Yes, he did but you were a farmer where do they make any money. Fertilizer and chem and droughts helped out min tax was paid over the 80s. Also, these guys never were big spenders. Had a good home, maybe a cottage, and a few minor toys.

That original investment could be worth in the end. Well over a million in tax paid CASH.

The 90s on the farm were not a time to spend money and most didn't.

Now these guys are gone and that amount is transferred down it would be like winning lotto 6-49. Some will piss it away some will quietly enjoy the time and play farm.

It's always about the money.

I also said earlier look at this weekends Telemiricle in Sask some farmer is going to always give a little to the cause.

Enjoy the day.

Actually the clients that I met were picked by the Branch Manager. Some were top borrowers, many had the largest deposits. Those were the people that actually just about fell over when you came to visit because they didn't know they mattered.

I still think over the years I saw a good cross section of the "real" numbers.

[bucket]

I will say this. Not many farms that are 3rd , 4th , 5th generation would still be here without some sort of government handout through out the years.

The people representing farmers with bios of being a 3rd, 4th , 5th generation farm don't realize this..

IF you do the math on some of the handouts and indexed them what most farm groups are asking for is peanuts.

For perspective. The federal government funded Merit 100 million dollars for 25000 tonnes of annual raw material through that plant.

70 million tonnes are grown in western Canada.

My guess in a lot of instances guys didn't know how to write a cheque until they were in their 50s.

IMHO some guys on boards are sent there because they do less damage and are less irritating away from the farm...

Like John Dutton said to Beth in Yellowstone.." now go ruin someone else's day"

[jazz]

There are all sorts of ways to make a situation work, but leveraging on an already established business is certainly a big leg up just from a lending point of view.

You can stumble into the bank all day with your good looks and a job wage, but the bank knows that can all end in a heartbeat, so they want an asset and most assets will ride inflation. Look at some of the richest families in the world. They add new members every generation to their establishments but I dont see their kids sent off to get jobs pumping gas.

My dad had already retired and sold his place off before I entered the business. This was the late 90s when everyone wanted out and like a fool I got in. I had a six figure job in the cube farm in downtown Calgary and gave up 15 yrs of vacations trying to farm at the same time. I had a city mortgage and commuting and hour a day on top of that. My boss always wondered why I was more tired after my vacation than before. Then they found out I was moonlighting and then the flexible vacation time stopped pretty abruptly.

[Old Cowzilla]

The young pups around here on OLD money farms work very hard to keep it running smoothly. With labor shortages ,expanded acres and diverse crops it's a spray,seed,spray,spray, combine,spray,fert and go like hell to get crop sold. Some sell there campers cause they never get to use them and the kids choose other careers .

[foragefarmer]

I'm a 2nd generational farmer, my parents picked up and left one farming area and started farming in another area.

My parents slowly bought a 1/4 at at a time. Our mixed farm grew slowly with out dated equipment and lots of hard manual work. My parents were extremely frugal and kept their debt load to a minimum.

My parent's frugalness was pasted down along with expanding slowly but surely. Newer and better equipment along with more land. More net income.

So when there was money left over from the farm it was put to work, off farm investments in real estate, stock market, and also off farm jobs. Anything was done to earn more income with the goal to prosper and independency.

The farm is a business and the money it makes can be put to work in any matter I see fit to improve my net worth.

Diversification with net income from the farm is the most important thing a farmer can do, it spreads the risk out. There is always two or three sectors pulling the load if one is hurting.

If you were to dissect the the majority of successful farms you would find that off farm diversification would be found in several areas.

[bucket]

I'm a 2nd generational farmer, my parents picked up and left one farming area and started farming in another area.

My parents slowly bought a 1/4 at at a time. Our mixed farm grew slowly with out dated equipment and lots of hard manual work. My parents were extremely frugal and kept their debt load to a minimum.

My parent's frugalness was pasted down along with expanding slowly but surely. Newer and better equipment along with more land. More net income.

So when there was money left over from the farm it was put to work, off farm investments in real estate, stock market, and also off farm jobs. Anything was done to earn more income with the goal to prosper and independency.

The farm is a business and the money it makes can be put to work in any matter I see fit to improve my net worth.

Diversification with net income from the farm is the most important thing a farmer can do, it spreads the risk out. There is always two or three sectors pulling the load if one is hurting.

If you were to dissect the the majority of successful farms you would find that off farm diversification would be found in several areas.

Then it isn't really the farm that is successful its the other businesses...why drag down profit with a farm?

[Sheepwheat]

Then it isn't really the farm that is successful its the other businesses...why drag down profit with a farm?

Eye opening isn’t it? Ugh