Re:Just Be Rich (2021)
by FrustratedMonky on Monday July 15, 2024 @01:27PM
(#40969792)
Sorry. don't have a good example with math.
I think the issue is that in the 70's the cut off was lower, below 13M. And stocks/bonds were also not doing as well so the concept of selling and investing and living off that wasn't possible. And possibly a lot of farmers had loans, large debt.
I'd need to find all the pre-inflation 70's examples. I just remember at the time the farmers were kind of stuck in a catch-22. Probably does not apply to todays farmers.
But you are correct, with your numbers. If the land really is worth that much, they could sell and re-invest.
Using my example, how is the business worth $14M if it's not making, say, $1M a year? If it's not making any money, wouldn't the value be much less? Maybe the current business value is very low, but the land is worth $14M because someone else could make more money with it. In that case, the wisest decision would be to sell it, use the proceeds to pay off the taxes and whatever liens are hanging around, and then invest the balance more productively. Say you have $10M left over after settling taxes and debts. That's still a huge windfall, and anyone living on that farm would never be poor again. Invested wisely, and that family never works a day in their life again. Hell, a risk-free 30 year US Treasury bond is paying in the neighborhood of 4.5% now. That windfall could be turned into a risk-free salary of $450,000/yr, with zero investing skills.