How to Get into Farming with No Money (1980)

Re:How to Get into Farming with No Money (1980) by taneq on Thursday August 08, 2019 @09:19PM (#20650531)

> An important item here, as well as in the future, is to deal on a CASH basis. You MUST NOT borrow to pay later. I don’t want to give all the reasons for everything I’m recommending — you will have to trust them. Pay as you go, EXCEPT for a SINGLE exception (later stated) is the best.

A farm is a business. Starting a business on a cash-only basis is possible and arguably safer than borrowing, but it's very slow going.

The way most farmers get started is they take out a great stonkin' loan from the bank ($10mil+) and buy land, stock, machinery etc. They then run their newly established farm and try to turn enough of a profit to pay the interest plus a bit of capital.

That's why farmers tend to be "asset rich and cash poor" for the first 20-30 years and then (if they're both diligent and lucky) are suddenly super wealthy once they've paid their loans off.

(Source: dairy-farming relatives)

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Re:How to Get into Farming with No Money (1980) by toasterlovin on Thursday August 08, 2019 @10:20PM (#20650827)

Small bit of pedantry: the nature of paying off a large loan over 30 years is that you gradually become wealthier at an accelerating rate. The sudden change after the mortgage is paid off is to cash flow, not wealth.

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Re:How to Get into Farming with No Money (1980) by taneq on Thursday August 08, 2019 @10:42PM (#20650928)

True, I should have said "suddenly have loads of cash once they've paid their loans off."

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Re:How to Get into Farming with No Money (1980) by sertorius on Friday August 09, 2019 @08:29AM (#20653676)

Worth pointing out that at the time the article was written in 1980, it was the 100-year high in interest rates, possibly north of 20% in many countries.

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Re:How to Get into Farming with No Money (1980) by taneq on Friday August 09, 2019 @11:05AM (#20655020)

While this is true, most of the aforementioned relatives in farming have had their farms going since before mid-2000s. So not the heady days of 16% and above, but still high single digits.

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Re:How to Get into Farming with No Money (1980) by User23 on Thursday August 08, 2019 @11:59PM (#20651237)

Used to be the federal government offered sweetheart deals on loans to people who wanted to be farmers. I'm talking $300k+ in the 70s.

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Re:How to Get into Farming with No Money (1980) by daniel-cussen on Friday August 09, 2019 @12:42PM (#20655990)

This was written in 1980, with crazy (~17%) interest rates and commensurate glamorization of taking out debt.

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