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Re: Would u pass on the farm?

Wglassfo

I had to take a break in the middle of your post couldn't finish it all in one setting! LOL. I sure hope you didn't type that out on your phone.
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Advisor

Re: I don't know your circumstances

I agree with don. the farm doesn't have to cash flow, but your total operation has to. this year, some of my "paid for" ground might subsidize some of my rented! My other advice is to use any extra liquidity to "pay ahead". Now you have to maintain working capital to function, but extra funds are well spent paying down principle. (this was a biger deal whhen interest was high)

 

I regret not buying some farms, but i will survive.

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Senior Contributor

Re: I don't know your circumstances

I guess what we are doing is investing with today's income and expecting return on the investment tomorrow. There is a lot of satisfaction in owning a farm and knowing what you did to pay for it plus the improvements you made to it. It's also pretty nice to retire and allow your land to support you.

 

Prepaying is a good policy. You pay for it sooner and most of your dollars are used for principal rather than interest. When i bought my last house, I recieved an amortorization schedule. Every month I paid three months of principal payments and one months interest. Every payment eliminated two interest payments. After about three years of that I paid the house off.

 

Besides it's rather painless to make additional principal payments when you have ample cash on hand.

 

 

 

 

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Contributor

Re: I don't know your circumstances

kudos to OKdon's post........frequent reader but hardly ever post but just had to put my two cents in on this one........dont think anyone has mentioned if there is anyone young entering the picture in the next few years.......it will open your eyes to his (or hers) perspective.........i know it did for me........if you hold back just for the sake of past generations conservatism then think back to some of the better opportunities that were passed up even in rough times......make the young mind do some figures and go through the process with him or her.........then if you dont get it through this opportunity .........then it will better prepare you for the next!....good luck!

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Senior Contributor

Re: I don't know your circumstances

I'm reminded of my cousin that bought his first 80 a number of years ago. His dad told he was crazy and was going to lose the farm. He landlord expressed deep concern for his financial health. No whe has several hundreds of acres of prime north Iowa land and he just bought another 80 at age 85. Thinking about the next generation I guess.

 

But anyway, he is commited to buying land and he has the discipline to make it work.  Working hard saving money and making wise decisions.

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Advisor

Re: Would u pass on the farm?

To me the big obstacle is coming up with the down money and cash flowing it with your other land. If you can take care of that and payments are the same as rent, go for it. I just bought a chunk this year and it is scary but you can't be like other farmers that sit on the land mommy and daddy gave them, and never improved their long term ownership goals. It is a solid retirement plan to own land and all interest is tax deductible.
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