Spend Savings Or Cut Back On Inputs?

[BA Deere]

I shouldn`t find this funny, but these gurus like Dave Ramsey and Bruce William have business owners call up all proud about what they accomplished and get demolished and told "The hours you put in, you`re just buying yourself a job!".  IDK, but sometimes before one does get traction, you have to work for free, if you do have a long term plan, you just can`t cut and run at the first down turn.

What has happened in grain farming isn`t something that those of us with a little gray hair didn`t know was coming, it was just a matter of "when" and here we are.  "This time" is different from the 80`s in that a job in town could`ve bought alot of $50/bag seed corn, today that job in town is probably no longer there and if it is it will take a substantial number of more hours needed to work to buy the $200/bag seedcorn.

With working off-farm, bosses aren`t as accomedating to give time off for planting and harvesting, they want you 40 hrs a week..or more or they don`t want you.  I know a guy with a good off-farm job, but he hires his harvest and hauling and elevator sprays, his brothers do tillage, he hires his hay mowed and baled.  If he adds it all up, he`s just making jobs for alot of people.

But I don`t know about that Dave Ramsey and these "debt free" people.  They had $90,000 in debt and pay it off in 2 years, but the husband and wife both have jobs making over $100,000/year...whoopty-doo I could do that too.   The only thing (and it`s a big thing) that they never mention is how do they pay taxes on this money before they pay their debt off, it has to come from "after tax dollars" and once someone is in too deep of hole, you just can`t service both the taxman and the banker.  Alot are going to find this out if they are in the Schedule 179 hamster wheel.

[Kay/NC]

I do think that a few of the financial gurus have helped a good number of people, to see what the credit card/HELOC ratrace was costing them.  It is a lot easier to sleep at night in a paid-for home with paid-for furnishings, compared to on a pillow owed on at 33%. 

I am not comletely sold on the gurus having the same answers for us in business - especially the farming business - as wage-earners.  There are times when we have had to carry a LOT of debt.  If it is related to expanding a good existing buusiness, or building a new one with good potential, then it is a different thing than riding a big balance on a VISA bill for a vacation you couldn't really afford to take, clothes you couldn't afford to wear, etc. 

There are a lot of people who earn prodigious amounts of money, who still haven't got two dimes to rub together when the day is done.  I had an interesting conversation about a couple of mutual acquaintances last week, with a young adult who had been sort of screwed over by them. 

My comment was that the husband hates what he does, so has to spend himself broke to force himself to do it.  All because the guy thinks he is really too good to have to work to start with...if I were earning as an MD, and had to still drop back and ask my widowed mother for money fairly often, it would feel like failure to me. 

Our monetray management is not the best, since we do enjoy some of what we earn, instead of piling it up to rest on until we die.  Still, as I told this young guy, "If my refrigerator quits, I can walk in and buy one with the cash in my pocket.  If the car quits, we can write a check for a new one.  If we needed another house, we can cash a CD and buy a damn house." 

When it's all said and done, the couple with the money problems probably have more "fun".  We have more "peace".  It guess it matters which you value most....

[dennymal]

I'm not talking about owning the finishers. You sell the integrator 10 acres-you get the manure and if you want to manage the building the integrator will pay you.

[sw363535]

That is pretty profound denymal,,, I mean that....  a part time farm can be pretty big compared to the old days...

Stress builds character and focuses priorities...

Kay....... You point out my reason for saying....... I hate television....

I think there was a time when TV reflected US society...... Now it is all a fantacy world....

"Reality" TV is no where close to reality.....  In every way most everything presented on television is unrealistic, but "we" expect to be attainable.....

Homes are bought and remodeled by newly weds spending 1/2 million for old depressed structures.   Young couples with less than 100K incomes......

Careers in food preparation are presented as glorified high paying careers............ Is that a truthful presentation for a high number of young people.....

Sports ,,,,,,   As a carreer ........ No other career in the US has so many young (and old) spending so much time and energy preparing for so few actual paying jobs....

The list of false presentations on TV is endless......Mostly geared to extract $$$$ from viewers or promote an industry.... We should be paid to watch it...

And the media, or news promotion is just as unrealistic......... and just as promotional of lifestyle and fictional futures...... and destructive of tradition and history.... 

I know this is getting dicy,  but I have friends that actually believe that you can get filthy rich making duck calls and live a life of 90% free time......... 🙂

[Shaggy98]

My wife and I completed the Dave Ramsey FPU course this past winter.  I'll admit that some of the on air conversations do seem a little far fetched, but I'll also admit that his program works.  We weren't anywhere close to hitting our financial bottom, but since I've been a long time Ramsey listener I wanted to see what his classes were about and this particular 9 week course plugged right into our schedule so we enrolled.  I agree with most of his teachings but there are a few that we tend to bypass.  I will say that he is spot on when he says it's 20% head knowledge and 80% behavior, but that goes for anything.  We cannot help anyone with anything if they don't believe that they need help.  I would encourage any married couple to complete his FPU course, there are many christian messages within the classes that relate both to money as well as bringing a couple closer together even if you've been married for many many years.

[dennymal]

What I am saying SW is this. Grainfarming has been great the last 4 years. I think that led to a false sense of security that we would always see 4.50-6.00 corn. Sons and daughters came home and made rockstar income on relatively small acres. Now things are a little different, cashflows are in the red. If you are renting your ground or have bought ground you are probably facing a pretty grim meeting with ones banker. I am just saying their are options out their to pull a person through in the hard times.

[BA Deere]

It`s always a good thing to be out of debt, however in a business like farming it`s nearly impossible to remain competitive and be debt free. Perhaps, if one had LLC for their farming operation and had their personal household "debt free".  That way if their debt ridden farm went under, it would take their personal belongs with it, likewise if their household got sued they wouldn`t lose their debt ridden farm 🙂

I think Dave Ramsey is spot on about a debt free household, but if you listen to other gurus like Bob Brinker he says to NOT pay off your home mortgage because it will have to be done with after tax dollars and you`ll lose the tax deduction.

[Shaggy98]

I agree with the tax deduction loss, but with the savings in interest I can afford to pay a little more taxes.  Everyone has there own style and beliefs, it's all who you wish to follow.  Personally I don't think one is right and one is wrong.  If we're all here to live and work another day we must be doing something right.

[sw363535]

Ramsey gives good personal spending advice.  Where frugality makes it easier whether we like it or not. But business management is not the same.  I have listened to Dave tell folks asking business advice that they need to seek other advice.

[idalivered]

denny, your reference to "my higher priced rents" is a slippery slope. do your landlords know that some of them get more than others?? how does one decide who gets more than who?? Do they or your neighbors read this here??  Just curious one would handle that?? 

I agree with your what you are saying. Alot of operations are cash flowing because of "paid for" farms.