WestTNguy said:Hemp is now legal to grow here too, and the government has been generous from what I understand. My only fear is that 1.) the rush to get in will drive prices down 2.) I've heard it is extremely time-intensive.
farmerjan said:One other thing I wanted to comment on. You said that at 4% interest, you have been told to just keep making the payments, not pay it off. And that you didn't want to take it out of your savings to pay it off. Not to be nosy, but what is your savings paying you? I have PART of my retirement account money in a guaranteed return account at 2.5% but it is liquid so I can get at it if I need it. The rest is in higher risk, and usually higher return, but at my age, I don't want to carry a big risk because there aren't the years to "come back" if we have another drop like in 2008/2009.... I lost half of my small retirement and when I made it back, I moved a bunch of it to a safer account. A regular savings account is less than 1% ??? If I had debt that was costing me 4% and I was only earning 2%, then I am losing money. I would pay off the debt, then I wouldn't be paying any out and even at a very modest interest, I would be gaining a little. You are looking at "losing money" in a small return account against inflation, but it is still better than paying out a 4% interest rate. You could take money out of your savings, pay off/down on that debt and the money saved from the initial monthly payment could be socked back into the place. Equity ......
I don't think he has all the answers..... But have you ever read anything by Dave Ramsey? He is big on not having any debt, except a mortgage, and then how to invest to be "rich" and there are all kinds of tax shelters to be able to take advantage of. I think that it might be of some benefit to spend a little time studying some of what he "preaches". Not saying you can't still do some of what you want with the farming.... no one said you have to do it all his way or no way. But it sounds like you are fairly disciplined, so ......
Just thought I would throw that out there.
WestTNguy said:farmerjan said:One other thing I wanted to comment on. You said that at 4% interest, you have been told to just keep making the payments, not pay it off. And that you didn't want to take it out of your savings to pay it off. Not to be nosy, but what is your savings paying you? I have PART of my retirement account money in a guaranteed return account at 2.5% but it is liquid so I can get at it if I need it. The rest is in higher risk, and usually higher return, but at my age, I don't want to carry a big risk because there aren't the years to "come back" if we have another drop like in 2008/2009.... I lost half of my small retirement and when I made it back, I moved a bunch of it to a safer account. A regular savings account is less than 1% ??? If I had debt that was costing me 4% and I was only earning 2%, then I am losing money. I would pay off the debt, then I wouldn't be paying any out and even at a very modest interest, I would be gaining a little. You are looking at "losing money" in a small return account against inflation, but it is still better than paying out a 4% interest rate. You could take money out of your savings, pay off/down on that debt and the money saved from the initial monthly payment could be socked back into the place. Equity ......
I don't think he has all the answers..... But have you ever read anything by Dave Ramsey? He is big on not having any debt, except a mortgage, and then how to invest to be "rich" and there are all kinds of tax shelters to be able to take advantage of. I think that it might be of some benefit to spend a little time studying some of what he "preaches". Not saying you can't still do some of what you want with the farming.... no one said you have to do it all his way or no way. But it sounds like you are fairly disciplined, so ......
Just thought I would throw that out there.
Jan, I have read a Dave Ramsey's book. Unfortunately, my family did not come from much at all. We were very poor. I've had to teach myself everything, and fortunately get to pick up tidbits from folks at work who are much better off than I am. I believe Dave Ramsey is very good for most people IN GENERAL. Everyone has their own personal financial situations. Would he tell me to pay off my student loan debt? Yes he probably would. But for me personally, my employer matches my retirement contributions (free money). I also keep a large part of my savings in Index Funds, since historically the market has returned an average of 7%. The rest I keep in a "high interest" savings account for stuff like emergencies. I plan to diversify some with real estate once I get married (that's a whole other story) and maybe some with the cows. If I can have a tractor I can depreciate each year, that holds its value...I can sell it later and recover some cash (just an example). I hope. I'm not an expert at this, but I feel like this is the best method for me.
The stock market could tank any day, and I lose a lot. It has always come back up. Having some diversification is your only insurance. I figure that people still need to eat, so this is where the cows (hopefully tax breaks) come in.
TennesseeTuxedo said:WestTNguy said:Hemp is now legal to grow here too, and the government has been generous from what I understand. My only fear is that 1.) the rush to get in will drive prices down 2.) I've heard it is extremely time-intensive.
And labor. In addition it requires a lot of water.
WestTNguy said:Hemp is now legal to grow here too, and the government has been generous from what I understand. My only fear is that 1.) the rush to get in will drive prices down 2.) I've heard it is extremely time-intensive.
cowgal604 said:WestTNguy said:Hemp is now legal to grow here too, and the government has been generous from what I understand. My only fear is that 1.) the rush to get in will drive prices down 2.) I've heard it is extremely time-intensive.
Prices always go up and down. Weed is like oil. You see the ebb and flow. Right now we are on a downward trend after coming off a really high market. We tend to see the same ups and downs every year. But, it's always best in this market to be niche. I produce the heavy stuff. Medical always has a market but recreational is by far more profitable.
Around here, if you sell something for more than its depreciated value, that's taxable income.. We don't have some of our equipment listed in our taxes because we bought it cheap enough we'll never sell it for less, it is probably appreciating in valueWestTNguy said:If I can have a tractor I can depreciate each year, that holds its value...I can sell it later and recover some cash. I hope. I'm not an expert at this, but I feel like this is the best method for me.
Nesikep said:Around here, if you sell something for more than its depreciated value, that's taxable income.. We don't have some of our equipment listed in our taxes because we bought it cheap enough we'll never sell it for less, it is probably appreciating in valueWestTNguy said:If I can have a tractor I can depreciate each year, that holds its value...I can sell it later and recover some cash. I hope. I'm not an expert at this, but I feel like this is the best method for me.
Jeanne - Simme Valley said:When you buy a farm item, you choose on each item whether you are going to expense the whole cost that year, or part of it and depreciate the rest, or depreciate each year based on full cost. You do that with ASSETS, not costs like fuel, fertilizer, etc.
If you bought something for $10,000 and you depreciated for a few years then sell it, you take the orig cost, less the depreciated amount, then figure out loss or profit.
$10,000 - $4,000 depreciation = $6,000.
Sold for $7,000, you have to claim a $1000 income.
If you sold it for $4,000, then you would have a $2000 expense/loss.
Nesikep said:I think that choice would come to if you chose a flat rate for charging mileage, which if the vehicle is mostly used for non-farm use (like going to your day job) would be appropriate, in which case you can't deduct the expenses of owning it.. There's probably a "reasonable rate" listed somewhere for what you can charge...
If the vehicle is mostly used for farm business, then parts, fuel, insurance, and depreciation ought to apply to expensable items.. I know our tax codes are a bit different up here, but what you're suggesting sounds ridiculous.
The tax man has a very difficult time telling if that CR 23990 seal you bought is for your tractor or your truck BTW!
Nesikep said:Around here, if you sell something for more than its depreciated value, that's taxable income.. We don't have some of our equipment listed in our taxes because we bought it cheap enough we'll never sell it for less, it is probably appreciating in valueWestTNguy said:If I can have a tractor I can depreciate each year, that holds its value...I can sell it later and recover some cash. I hope. I'm not an expert at this, but I feel like this is the best method for me.