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<blockquote data-quote="mwb" data-source="post: 139566" data-attributes="member: 2671"><p>Good points. I also wanted to say that I enjoy reading everything on this message board and I certainly am thankful for all the advice here. </p><p></p><p>I guess different people can have different view points of the financing issue <u>depending on their circumstances</u>. I feel that many of the people that have posted on this issue and feel that one should stay away from the bank are speaking from a view point of HAVING to make a profit to live. Then there are others who do not neccesarily NEED to make a profit and are just doing it on the side. If it takes 5 years before a profit occurs, so be it. From that person's standpoint, it seems like using the bank's money is ok. </p><p></p><p>For example, like me. I have a job. My wife has a job. I plan to buy 25 cows and a bull. In no way will I need the income from the cattle to live. I plan to use my income from my job to buy feed, and everything else I need. So, my plan is to have the calves pay my loan, the cost of my lease each year, and then the rest will go to taxes. If I am short, then I will pay taxes out of my own pocket. Long term, I would not want to go on operating like this, but of course when the cows are paid off in a few years, I won't. Some people say that if you are using your own income from your job to pay for feed and other expenses then you are just wasting your time with cattle because you could just put that money away in savings. But again, you have to look at it from the point of view from a guy like me...a guy who wants to do this on the side. Some people spend thousands of dollars on golf, others on boats and jet ski's. If my money is being "thrown away" on cattle that will one day be paid for and will turn around and pay me, then it makes sense. I look at it as a forced-savings plan. In other words, when I go to the feed store and buy cubes, that is money I probably would have spent on movies, going out to eat, and other junk I don't need. At least this way I am spending my money on something I enjoy doing and on something that will one day make me money. It may take longer than I plan, but I don't care. </p><p></p><p>The last post mentioned the issue of high cattle prices. That is a great point. You are right, its like buying into the stock market when its up and selling when its down. But again, the example I refer back to is my friend. He borrowed $25,000 and bought himself 25 cows and a bull. His annual payments were somewhere in the ballpark of $7,000 per year. He was making approx. $12,500 from his calves each year (obvisouly that varied, but I am using that as an average). Let's say cattle prices cut in half for some reason, and I am in that same situation...meaning, my payment is $7k annually to the bank. Well, I'd still be making $6 to $7k per year on my calves which would go to the bank. I'd have to pay taxes out of my own pocket, along with feed and everything else. That is fine with me. Why? Well, I know that prices will go back up someday and I am able to stick it out and still do what I enjoy doing. Of course I have to point out that is basically a worst case scenerio.</p><p></p><p>I guess what I am saying is, for some people, a profit is not always something that has to happen. Of course, I want to make a profit. And I belive long term, I will make a profit. If I have some down years, so be it. But in the long run, I am confident I will make money. Especially when my loan is paid off. Some people would say this is crazy...to throw money away on cattle that are losing you money. But I say, does throwing your money away on golf, boats, jet ski's, whatever, ever make you money? No it never does. But putting your money into cattle will one day be a way to generate residual income for yourself in the future eventhough you may not make a penny for a few years.</p></blockquote><p></p>
[QUOTE="mwb, post: 139566, member: 2671"] Good points. I also wanted to say that I enjoy reading everything on this message board and I certainly am thankful for all the advice here. I guess different people can have different view points of the financing issue [u]depending on their circumstances[/u]. I feel that many of the people that have posted on this issue and feel that one should stay away from the bank are speaking from a view point of HAVING to make a profit to live. Then there are others who do not neccesarily NEED to make a profit and are just doing it on the side. If it takes 5 years before a profit occurs, so be it. From that person's standpoint, it seems like using the bank's money is ok. For example, like me. I have a job. My wife has a job. I plan to buy 25 cows and a bull. In no way will I need the income from the cattle to live. I plan to use my income from my job to buy feed, and everything else I need. So, my plan is to have the calves pay my loan, the cost of my lease each year, and then the rest will go to taxes. If I am short, then I will pay taxes out of my own pocket. Long term, I would not want to go on operating like this, but of course when the cows are paid off in a few years, I won't. Some people say that if you are using your own income from your job to pay for feed and other expenses then you are just wasting your time with cattle because you could just put that money away in savings. But again, you have to look at it from the point of view from a guy like me...a guy who wants to do this on the side. Some people spend thousands of dollars on golf, others on boats and jet ski's. If my money is being "thrown away" on cattle that will one day be paid for and will turn around and pay me, then it makes sense. I look at it as a forced-savings plan. In other words, when I go to the feed store and buy cubes, that is money I probably would have spent on movies, going out to eat, and other junk I don't need. At least this way I am spending my money on something I enjoy doing and on something that will one day make me money. It may take longer than I plan, but I don't care. The last post mentioned the issue of high cattle prices. That is a great point. You are right, its like buying into the stock market when its up and selling when its down. But again, the example I refer back to is my friend. He borrowed $25,000 and bought himself 25 cows and a bull. His annual payments were somewhere in the ballpark of $7,000 per year. He was making approx. $12,500 from his calves each year (obvisouly that varied, but I am using that as an average). Let's say cattle prices cut in half for some reason, and I am in that same situation...meaning, my payment is $7k annually to the bank. Well, I'd still be making $6 to $7k per year on my calves which would go to the bank. I'd have to pay taxes out of my own pocket, along with feed and everything else. That is fine with me. Why? Well, I know that prices will go back up someday and I am able to stick it out and still do what I enjoy doing. Of course I have to point out that is basically a worst case scenerio. I guess what I am saying is, for some people, a profit is not always something that has to happen. Of course, I want to make a profit. And I belive long term, I will make a profit. If I have some down years, so be it. But in the long run, I am confident I will make money. Especially when my loan is paid off. Some people would say this is crazy...to throw money away on cattle that are losing you money. But I say, does throwing your money away on golf, boats, jet ski's, whatever, ever make you money? No it never does. But putting your money into cattle will one day be a way to generate residual income for yourself in the future eventhough you may not make a penny for a few years. [/QUOTE]
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