Making money in cattle!

[50/50Farms]

That's the great thing about cattle.....their liquid....

I've yet to see a blender that big...

 

[kenny thomas]

You ever deal with CH catle Co? I have twice. Was happy both times.

I need to learn what sells best at the places around me. Just so I know. I don't rightly have the funds to be trading week to week.

Like the penhookers at Greeneville. They just hoping to run them through the ring and get more than they paid outside or what? Seems like such a gamble. Unless they lowball off the jump. Never dealt w them.

Don't deal with CH Cattle. Nothing wrong with it but I don't like the idea of taking calves to a place and the price being take it or leave it. I like several buyers being there.
You know the penhookers are going to lowball the price. Plus most of the time they have a buyer inside that's sharing in the profit so they have more control on the price.

 

[Warren Allison]

Yes, I understand that. Whether it’s a loan or an investor putting up the money it means you’re just an employee

Nope. When I choose a bank or credit union to let them give me a line of credit, than I an their customer, I am their boss, not an employee. I give them an opportunity to make money off of interest. And I actually, I am not the one getting the credit line...it is one of my S corps. Don't ever let them treat you like they are doing you a favor

 

[Warren Allison]

Nothing wrong with using someone else’s money if yours is making more. Debt is when you can’t pay it off anytime you want.

Yes, that is the key. I may want to buy a bunch of cattle for $100k. I probably have that much or more in several accounts. I may have $500k in an account for cattle. Don't matter, I write the check on a credit line account, and leave MY money alone. When I do whatever I bought them for, say to resell, then when I sell them, I have the buyer pay whatever S corp, and the S corp pays back the credit line.

 

[Brute 23]

Mathematically, your balance sheet still says it's your money. You didn't fool any one.

 

[Warren Allison]

I'm with you completely. I don't have a clue what yall even mean by OPM.

And I definitely would like to gain a better understand, if only for conversation sake.

OPM is "Other People's Money".

 

[Lucky]

Nope. When I choose a bank or credit union to let them give me a line of credit, than I an their customer, I am their boss, not an employee. I give them an opportunity to make money off of interest. And I actually, I am not the one getting the credit line...it is one of my S corps. Don't ever let them treat you like they are doing you a favor

When I went to talk with my current banker for the first time a lady came out sat me in the lobby and gave the wife and I credit apps. I told the wife not to fill them out. When we walked in his office he smiled at me and ask why I wouldn't fill out the paperwork out. I told him this is supposed to be a partnership and we need to talk about what he can do for me before I fill any paperwork out. He actually got excited and talked to us for an hour. This is a small bank in a town of 5,000 people too. We have a good relationship now. I am definitely not his employee, he helps me I help him...that's the way it should be.

 

[Lucky]

I've yet to see a blender that big...

There's a place called a salebarn that can turn 20 truckloads into something small enough to fit in a shirt pocket on any day but Sunday.

 

[Brute 23]

So you have $500K in a bank...

They lend you $100K at 5%...

You think you are paying to use some one else's money 🤔

 

[Warren Allison]

So you have $500K in a bank...

They lend you $100K at 5%...

You think you are paying to use some one else's money 🤔

No. you pay it to protect YOUR money. Say 1 of my S Corps borrows $100k . And say that deal it borrowed money for goes belly up. MY personal assets nor my other companies' assets can be taken. I can bankrupt that company, if I choose, or I can loan that company some of MY money to pay it off. But if I don't want to do that, the bank can not go after my personal money. Yes, I am paying to use the bank's depositors' money ( including mine).

That 5% would be $5k a year, if you used it all year. Most of the time when I get money to go to a sale, or buy a herd from someone, I probably already have them sold. So I may pay interest from a couple of days to a few weeks. The last couple of herds I bought , the person sent me the money ahead of time, so that is really using OPM!

 

[Brute 23]

No. you pay it to protect YOUR money. Say 1 of my S Corps borrows $100k . And say that deal it borrowed money for goes belly up. MY personal assets nor my other companies' assets can be taken. I can bankrupt that company, if I choose, or I can loan that company some of MY money to pay it off. But if I don't want to do that, the bank can not go after my personal money. Yes, I am paying to use the bank's depositors' money ( including mine).

That 5% would be $5k a year, if you used it all year. Most of the time when I get money to go to a sale, or buy a herd from someone, I probably already have them sold. So I may pay interest from a couple of days to a few weeks. The last couple of herds I bought , the person sent me the money ahead of time, so that is really using OPM!

No. You should meet with an attorney.

 

[Lucky]

No. You should meet with an attorney.

I think that part goes without saying. What Warren is saying is the way 99% of businesses and business people operate. If you think anything different your fooling yourself. Elon Musk was worth around $300 Billion when he bought Twitter for $44 Billion. He borrowed the bulk of that money and was considering bankruptcy rather quickly. Hopefully he's got it straightened out now.

 

[Brute 23]

I think that part goes without saying. What Warren is saying is the way 99% of businesses and business people operate. If you think anything different your fooling yourself. Elon Musk was worth around $300 Billion when he bought Twitter for $44 Billion. He borrowed the bulk of that money and was considering bankruptcy rather quickly. Hopefully he's got it straightened out now.

Not even close to the same.😄

 

[50/50Farms]

Well, there's more than one way to skin a cat, whatever he's doing seems to be working for him.

 

[Lucky]

Not even close to the same.😄

So you think the majority of businesses operate on a cash only basis? No operating, inventory, or construction loans? 🤔 Owning Cattle is a business or a hobby for people. If you treat yours as a hobby I can understand why you disagree with people that treat theirs ar a business. Mine have to make money, they are part of a bigger picture. They've been paid for for several years now but I'd borrow money against them tomorrow if it would benifit my operation.

 

[Jeanne - Simme Valley]

I owe noone. But, I keep a line of credit with Farm Credit. If something comes up (like a good deal to buy something), I just call them and they transfer $ to my checking account. Quick, immediate cash. I don't know about most of you, but I do not keep all my money in my checking account!

 

[kenny thomas]

I have a line of credit also as you state just in case I run onto a bargain.

 

[Brute 23]

So you think the majority of businesses operate on a cash only basis? No operating, inventory, or construction loans? 🤔 Owning Cattle is a business or a hobby for people. If you treat yours as a hobby I can understand why you disagree with people that treat theirs ar a business. Mine have to make money, they are part of a bigger picture. They've been paid for for several years now but I'd borrow money against them tomorrow if it would benifit my operation.

You are running down a rabbit hole that has nothing to do with what Warren said and nothing to do with my response.

 

[gcreekrch]

I owe so much money people gotta be nice to me….. 😂

Paid for this fall with a few hundred cows left here

 

[libertygarden]

What that sayin, “when you owe the bank $1 million, the bank owns you. When you owe the bank $100 million, you own the bank.”