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<blockquote data-quote="Hunter" data-source="post: 1542745" data-attributes="member: 25000"><p>The profitability thread and the statement "Bottom line, at retirement a farmer should be in a better financial position" got me thinking. If one was to buy acreage and farms it and then sells at retirement would they be better off?</p><p>Example: one buys 250 acres for 2K per acre at a total cost of $500,000 w/ 50K as down payment. For a 30 year 2.5% loan that payment is $1,778 (no insurance or taxes). Total cost of $640,080.</p><p></p><p>If I put $50K initial investment and $1,778 every month in S&P 500 fund with an average return of 7% (historical avg adjusted for inflation) I would have over $2.5 million in cash.</p><p></p><p>It is not as simple as this example as there are lots of variables that go into it. But, I am not sold on a farmer being in a better position unless the city person saved nothing.</p><p></p><p>I am all ears on what I may be missing as this could be a good discussion.</p></blockquote><p></p>
[QUOTE="Hunter, post: 1542745, member: 25000"] The profitability thread and the statement "Bottom line, at retirement a farmer should be in a better financial position" got me thinking. If one was to buy acreage and farms it and then sells at retirement would they be better off? Example: one buys 250 acres for 2K per acre at a total cost of $500,000 w/ 50K as down payment. For a 30 year 2.5% loan that payment is $1,778 (no insurance or taxes). Total cost of $640,080. If I put $50K initial investment and $1,778 every month in S&P 500 fund with an average return of 7% (historical avg adjusted for inflation) I would have over $2.5 million in cash. It is not as simple as this example as there are lots of variables that go into it. But, I am not sold on a farmer being in a better position unless the city person saved nothing. I am all ears on what I may be missing as this could be a good discussion. [/QUOTE]
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