Where do you put your profits?

[shaz]

We're profitable but I lost my job after 16 years and my income comes from cattle and stock options. We are under no illusions about having to downsize the farm in a few years. None of the kids want it

 

[1982vett]

Like you i dont need the cattle but like doing it.
Also we have no children and no nephews or nieces that are interested in it. Big sale sometime i guess.
Might do like greybeard and sell out and lay around the pool getting a tan.

I'd bet just about every kid or person in line of succession that "isn't interested" in a farm is quite interested in how to turn it into $$$ after we are gone. They just aren't interested in the work or time investment to run one.

I've pretty much made peace with the fate of ours. Part of it has been in the family for 123 years as of November. Brother in law sold off my sisters share within 7 months of her passing. I would have bought it except for the financial strain it would have put on us in our "retirement" years. That and having no one with the agriculture passion to leave it to. As for selling out and laying around a pool.... it is very tempting. Wife and I want to and have been traveling more. This year I will have let all (except for what I own in part with another cousin) of my leased acreage go to someone else. My health and age are a big factor. I've been feeling pretty good the past year and letting go of some leased land has helped a lot. Just a matter of equipment lasting a few more years. Fencing is in pretty good shape for the most part. I had the clutch and ac fixed in the main tractor (again). Bought a new bull for a bunch of old cows. So that says I'm not read totally ready to throw in the towel but I am letting go of a lot of responsibility. I suppose some distant cousin could possibly buy the land at some point that would keep it in the family, but I don't have plans to sell it in my lifetime. Farm would have cash flowed positive had I not "fixed" the tractor and bought a new mule. I don't think I'm asking for much, just want a positive cash flow that comes close to matching the efforts put into maintaining the place.

 

[Dave]

There is a couple of kids who might want the place but I don't think they could afford to buy the others out. We have just had it a little less than 7 years now so there is no long term family tie to the place.

 

[gcreekrch]

Like you i dont need the cattle but like doing it.
Also we have no children and no nephews or nieces that are interested in it. Big sale sometime i guess.
Might do like greybeard and sell out and lay around the pool getting a tan.

Parent's are gone and I'm adoptable……..

 

[gcreekrch]

I'd bet just about every kid or person in line of succession that "isn't interested" in a farm is quite interested in how to turn it into $$$ after we are gone. They just aren't interested in the work or time investment to run one.

I've pretty much made peace with the fate of ours. Part of it has been in the family for 123 years as of November. Brother in law sold off my sisters share within 7 months of her passing. I would have bought it except for the financial strain it would have put on us in our "retirement" years. That and having no one with the agriculture passion to leave it to. As for selling out and laying around a pool.... it is very tempting. Wife and I want to and have been traveling more. This year I will have let all (except for what I own in part with another cousin) of my leased acreage go to someone else. My health and age are a big factor. I've been feeling pretty good the past year and letting go of some leased land has helped a lot. Just a matter of equipment lasting a few more years. Fencing is in pretty good shape for the most part. I had the clutch and ac fixed in the main tractor (again). Bought a new bull for a bunch of old cows. So that says I'm not read totally ready to throw in the towel but I am letting go of a lot of responsibility. I suppose some distant cousin could possibly buy the land at some point that would keep it in the family, but I don't have plans to sell it in my lifetime. Farm would have cash flowed positive had I not "fixed" the tractor and bought a new mule. I don't think I'm asking for much, just want a positive cash flow that comes close to matching the efforts put into maintaining the place.

If we sell out there is a 63% capital gain tax put in by our current socialists in charge. We are going to mentor a young couple and left them pay our kids what we would end up with if we sold once we are gone. Part of the deal is they have to look after two grumpy old farts until we need extended help.

 

[Cowman42]

Low cost S&P 500 index fund is very safe and very successful over the long term as long as a person is disciplined enough to not cash out in a big long down market.

Used to be true. The S&P is now dominated by the "Magnificent 7" big tech stocks. They make up somewhere near 40% of the index and have been moving counter to the other 493 stocks in the index.......There is a whole lot more risk in the market indexes now than there used to be. Most folks don't realize how risky it is nowadays. Kinda like the housing market before '08. It was the safest place to put your money.......Right up until it wasn't.

 

[simme]

Used to be true. The S&P is now dominated by the "Magnificent 7" big tech stocks. They make up somewhere near 40% of the index and have been moving counter to the other 493 stocks in the index.......There is a whole lot more risk in the market indexes now than there used to be. Most folks don't realize how risky it is nowadays. Kinda like the housing market before '08. It was the safest place to put your money.......Right up until it wasn't.

Still, the 500 has provided a lot of growth/return over the long term. About 10% average annual over the last 70 years. The total market index funds are available for a broader exposure and diversification. For the long term investor, there needs to be tolerance for short term risk. Shorter term safety seems to come at a cost of lower returns. In 1999 (dot com bust), I lost a good bit of money. In the 2008 depression, I lost (on paper) 42% of my money. But never cashed out. By retirement time in 2019, I was in very good shape.

Everyone has to determine their tolerance for risk, but a long term (never sell) approach worked for me. People can select individual stocks and funds and might do better. But that usually leads to a more concentrated investments (way less than 500 stocks or funds). The issue is the time and effort required to manage the investments. I am just too lazy to watch all that every day. S&P 500 is up over 25% this year.

 

[Brute 23]

If the S&P goes to poop the world is over and it won't matter. It's one of the best places to put your money. If you know nothing about the stock market, put your money it the S&P, DJ, etc and turn off the news.

 

[Dave]

Parent's are gone and I'm adoptable……..

Wait a minute. If someone needs to be adopted I am available and need a chance o make my case.

 

[gcreekrch]

Wait a minute. If someone needs to be adopted I am available and need a chance o make my case.

Maybe we can both move in to Kenny's basement…….

 

[Dave]

If we sell out there is a 63% capital gain tax put in by our current socialists in charge. We are going to mentor a young couple and left them pay our kids what we would end up with if we sold once we are gone. Part of the deal is they have to look after two grumpy old farts until we need extended help.

I knew of a similar case. The young couple took out life insurance on the older people for an amount to cover the kids.

 

[Dave]

Maybe we can both move in to Kenny's basement…….

Does Kenny have a basement? What condition is it in?

 

[gcreekrch]

Does Kenny have a basement? What condition is it in?

Doesn't matter, he has lots of money and still wants to work.

 

[Silver]

If we sell out there is a 63% capital gain tax put in by our current socialists in charge. We are going to mentor a young couple and left them pay our kids what we would end up with if we sold once we are gone. Part of the deal is they have to look after two grumpy old farts until we need extended help.

This is what my wife and I have been discussing for the last while.

 

[kenny thomas]

Maybe we can both move in to Kenny's basement…….

Don't have a basement. Try another plan.

 

[gcreekrch]

This is what my wife and I have been discussing for the last while.

You two are still kids yourselves.

 

[farmerjan]

I am going to throw a monkey wrench in it a little bit.... for farms where one kid works with the parents or helps out alot.... they should get the farm... and there is NOTHING that says that the parents HAVE to leave anything to anyone... or that it HAS TO BE divided up between any of them or evenly....
I get parents want to be fair... BUT...... it also is not fair to the one or "ones" that have helped for years, even in their spare time/vacations/etc..... to have to buy out the others in the name of EQUAL..... not saying the others should not get something.... but not to force the sale of the farm in order to make sure everyone gets an equal part...
I like the idea @gcreekrch has... so that the farm/ranch can still be a working entity... and to get someone to have some sweat equity in it so that they would be wanting to keep it down the road... blood relative or not.... the kids will get something, but they are not entitled to anything....
It is not easy to find one to mentor so that they can take it over.... but if there is no one that wants to keep it intact in the family... then that is the best way for someone to insure their hard work, and belief in farming, is continued.....

The kids are NOT ENTITLED to inherit anything.... it is the parents job to get them raised up and to become productive members of society.... especially if it is a farm that you have bought and have worked to make it something.... unless it is long term family land that you want to keep in the family.....if no one has stayed to help, or put effort into it after they have become an adult... it is for the CURRENT farmer/rancher/owner to decide what they want to do with it and if it means finding another that wants to farm and is willing to work for that opportunity... then they should be the recipients of the farm... in some manor... let them buy into it and when the current farmer passes on, they should become the owner with mortgage payments or whatever... and no one else should have their greedy fingers into it.... especially family.
I have seen so many that get sold off to satisfy the heirs getting their "fair share".....
I say BS to that.... there are too many greedy heirs that can't wait for the parents hard work of their lifetime...something that meant something to them... for them to die so the heirs can reap the benefits...

 

[Silver]

You two are still kids yourselves.

Well, there's that. But I'll be 55 in a couple months, and a person needs to think about how long he will be able to do this, and what kind of shape he wants to be in should he want to travel around some in retirement.

 

[gcreekrch]

Don't have a basement. Try another plan.

Spare bedroom? Barn loft? Root cellar with no snakes or bugs?

 

[Tomcolvin]

Just like the headline says. What do you put your cattle profits in to? What has been the most effective money you have spent? For the longest time I put mine in a low cost index fund and that proved to be a solid strategy. Now even the stock market seems top heavy and not a very good value. I always set aside a small portion to reinvest back in to the farm but for the most part I try to use the majority of any profit to diversify outside of cattle.

PROFIT???