Cash Cow Farmer

Tag: Grain Marketing

  • 3 Ways to Manage Income With Real Estate

    [vc_row][vc_column][vc_column_text]More tips for tax management[/vc_column_text][vc_column_text]

     Don’t have time to read? Listen here:
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    Whether it’s farmland, commercial, or residential real estate, there are lot of income management techniques that real estate is good for.
     Last week, we talked about managing income. We’re revisiting that topic, but this time specifically around real estate.
     Today, we’ll be focusing on the tax advantages of real estate, which I learned from Paul Moore’s book The Perfect Investment, as well as a few real estate deals of my own.

     1) Passive Losses Through Depreciation
     Unfortunately, we can’t depreciate farmland, so farmland doesn’t apply here. Still, farmers can use this option for other real estate investments.
     Let’s say you buy a commercial multifamily apartment complex as an investor or partnering investor. Everything’s depreciable: the furnishings, the parking lot, the apartment building, and more. When you buy that asset, you’re depreciating everything a few years later; you have the depreciation expense.
     The depreciation expense and the operating costs are generally higher than the actual revenues coming from rents. And when you have expenses higher than rents, you don’t have to pay taxes on that. The depreciation is not actually a cash cost: it’s just a removal of the asset value over time. You’re not paying it every month.
     You can actually offset most of the income you get from rental property because of depreciation and operating expenses, which means most of that income will be tax-free.[/vc_column_text][ult_buttons btn_title=”TRY CASHCOW FARMER FREE FOR 30 DAYS” btn_link=”url:https%3A%2F%2Fcashcowfarmer.clickfunnels.com%2F30daytrial||target:%20_blank” btn_align=”ubtn-center” btn_size=”ubtn-small” btn_title_color=”#ffffff” btn_bg_color=”#00ab61″ btn_hover=”ubtn-fade-bg” btn_bg_color_hover=”#ffffff” btn_title_color_hover=”#00ab61″ btn_icon_pos=”ubtn-sep-icon-at-left” btn_border_style=”solid” btn_color_border=”#ffffff” btn_color_border_hover=”#00ab61″ btn_border_size=”2″ btn_font_size=”18″][vc_column_text] 2) Reverse Mortgage

     When you own land or other real estate free and clear, it’s possible to take out a “reverse mortgage” on the land. It’s 100% tax free, plus you can deduct the interest.
     Let’s say you buy $1 million in farmland. Over time, that land either appreciates or you pay down the debt and you have equity.
     If you have a million-dollar land and half a million dollars in debt that you’re paying down over time, you can go out and refinance that property. This is called a “reverse mortgage.” You can refinance it up to its asset value—$1 million—and put that money in your pocket, tax-free.
     That’s half a million in cash you’ve got for other investments, tax-free. And again, you can deduct the interest.[/vc_column_text][ult_buttons btn_title=”SCHEDULE A FREE GRAIN MARKETING STRATEGY SESSION” btn_link=”url:https%3A%2F%2Fcashcowfarmer.clickfunnels.com%2Fmarketing-strategy||target:%20_blank” btn_align=”ubtn-center” btn_size=”ubtn-small” btn_title_color=”#ffffff” btn_bg_color=”#00ab61″ btn_hover=”ubtn-fade-bg” btn_bg_color_hover=”#ffffff” btn_title_color_hover=”#00ab61″ btn_icon_pos=”ubtn-sep-icon-at-left” btn_border_style=”solid” btn_color_border=”#ffffff” btn_color_border_hover=”#00ab61″ btn_border_size=”2″ btn_font_size=”18″][vc_column_text] 3) 1031 Exchange
     Generally, when you sell real estate, it’s appreciated from the value you bought it at. You have to pay capital gains tax on assets on which you’ve realized the appreciated value. But you can do a 1031 exchange to counteract that.
     I did this last year when I bought some farmland from my grandma, who’s 91 now. She grew up on the land, and her base was basically nothing: let’s say roughly $500/acre. When I bought that land from her for around $3,000/acre, she would have had to pay capital gains on $2,500/acre, which is about 20%. Huge.
     So she sells me the farmland, and the money goes to an escrow agency. Within six months, you have to repurchase more real estate, and you can actually pass along that basis to future real estate.
     You can do that forever, as long as the new purchase is within six months of liquidating the old asset.. If somebody comes and says they want to buy your real estate, you’ll have to go out and find something to purchase in exchange.
     It’s a bit of work, but you never have to pay capital gains tax. When you pass away, the basis is reset for your heirs.
     Let’s say my grandma bought other real estate for the same price. She had a $500 basis and bought land for $3,000. She basically kicked the can down the road.
     If she passes away and the market is $4,000, because everything is in a 1031 exchange, if my dad inherits it it’ll be at whatever the market is at. My dad’s new basis is not $500, but $4,000 or whatever the market was when grandma passed.

     Conclusion
     I really think you should read Paul’s book. It’s an easy read and pretty short. There are so many ways to help yourself manage your income; it’s just a matter of learning all the tips available.
     This post was based on an episode of the Cash Cow Farmer Podcast. To hear more content like this in audio form, subscribe to the show here.[/vc_column_text][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”40″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”40″ screen_tablet_spacer_size=”30″ screen_mobile_spacer_size=”20″][/vc_column][/vc_row][vc_row dfd_row_config=”full_width_content” dfd_row_parallax=”off” dfd_row_responsive_enable=”off” dfd_enable_overlay=”off” css=”.vc_custom_1470889834038{background-color: #2d2d2d !important;}”][vc_column width=”3/4″][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”25″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”0″ screen_tablet_spacer_size=”0″ screen_mobile_spacer_size=”0″][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”25″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”25″ screen_tablet_spacer_size=”15″ screen_mobile_spacer_size=”10″][ultimate_heading heading_type=”customizable” heading_tag=”h3″ heading_content=”FREE GRAIN MARKETING STRATEGY SESSION!” main_heading_default_weight=”400″ main_heading_color=”#ffffff” subheading_type=”customizable” subheading_tag=”h5″ sub_heading_default_weight=”400″]DON’T LET THE MARKETS WIN…SCHEDULE YOUR FREE SESSION TODAY![/ultimate_heading][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”25″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”25″ screen_tablet_spacer_size=”15″ screen_mobile_spacer_size=”10″][/vc_column][vc_column width=”1/4″ column_responsive_mobile_classes=”dfd-remove-right-padding” column_responsive_mobile_resolutions=”dfd-apply-mobile” css=”.vc_custom_1470810100672{padding-right: 2% !important;}”][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”15″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”0″ screen_tablet_spacer_size=”0″ screen_mobile_spacer_size=”0″][bt_animation animation_type=”_flipX” duration=”2″ repeat=”2″ allow_margins=”yes” scroll_offset=”5px” no_hide=”yes”][ult_buttons btn_title=” FREE STRATEGY SESSION” btn_link=”url:https%3A%2F%2Fcashcowfarmer.clickfunnels.com%2Fmarketing-strategy||target:%20_blank” btn_align=”ubtn-center” btn_size=”ubtn-large” btn_title_color=”#ffffff” btn_bg_color=”#00ab61″ btn_hover=”ubtn-fade-bg” btn_bg_color_hover=”#ffffff” btn_title_color_hover=”#00ab61″ btn_icon_pos=”ubtn-sep-icon-at-left” btn_border_style=”solid” btn_color_border=”#ffffff” btn_color_border_hover=”#00ab61″ btn_border_size=”2″ btn_font_size=”18″][/bt_animation][vc_column_text]

    SCHEDULE YOUR FREE SESSION TODAY!

    [/vc_column_text][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”10″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”10″ screen_tablet_spacer_size=”10″ screen_mobile_spacer_size=”10″][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”15″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”15″ screen_tablet_spacer_size=”10″ screen_mobile_spacer_size=”10″][/vc_column][/vc_row]

  • 3 Simple Income Tax Management Strategies

    [vc_row][vc_column][vc_column_text]How Farmers Can Ensure They Enter a Lower Tax Bracket[/vc_column_text][vc_column_text]

    Don’t have time to read? Listen to the podcast here:
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     Income tax is a huge cost on any farming operation, because as farmers we can’t depreciate land purchases.
     Since tax season is coming up, it’s time to talk about some of the best income tax management strategies for farmers. Here are three of the best. (more…)

  • Improving Success With Escapism

    [vc_row][vc_column][vc_column_text]Why you need to escape work to be successful at it.[/vc_column_text][vc_column_text]

    Don’t have time to read it? Listen to the Podcast here:
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    Recently, I was reading a book (which is usually how these articles get started). It was called The Anatomy of Success by Nicolas Darvas.
     Darvas was an interesting guy. Back in the days of JP Morgan and Cornelius Vanderbilt, Darvas started as one of the world’s greatest dancers, then got into business. He made $2 million trading on the stock market.
     One thing he strongly advocated for in his book was escapism.
     Every truly successful person I’ve ever meet or read about has a hobby that provides him or her with escapism. The opportunity to escape somewhere at some time in our daily lives to free our mind and improve personal happiness is so important to obtaining and sustaining success. (more…)

  • Real Estate Valuation Strategy for Farmland – Cap Rate

    [vc_row][vc_column][vc_column_text]1-jpg
     It’s always a challenge to value real estate, especially when it comes to farmland.
     After reading Paul Moore’s book The Perfect Investment, my perspective on valuing real estate at a professional and investment level was changed dramatically.
     So many farmers only think about the dollar per acre amount and not what Paul talks about in his book: “cap rate.” Today we’re going to unpack cap rate and how that makes a difference when you’re valuing real estate. You’ll learn how you can put a number all the real estate values that you operate on your farm. (more…)

  • 7 Sources of Off Farm Income

    [vc_row][vc_column][vc_column_text]1
    Don’t have time to read? Listen here:
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     Let’s set the stage: you’re a farmer with a can-do attitude, but unfortunately you’re on the brink of having to give up the farm. Your main operation just isn’t making what you need.
     But there’s a wonderful reality working in your favor: there are people out there who aren’t like you. In fact, they will pay you to do certain work for them in more places than just the farm. This extra work just might help you keep the farm.
     I recently interviewed Matt Brechwald, co-host of the Off Farm Income Podcast, about what that extra work might look like for you. Today, we’re going to go over seven sources of off farm income. (more…)

  • Financial Principles of Ancient Babylon (Part 4): Inheritance

    [vc_row][vc_column][vc_column_text]1
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     Farmers as a group are extremely wealthy—at least with the assets they own.
     Think about it: if you own a combine, you own a $200,000-$300,000 machine. And if you own a quarter of land, you own half a million to a million dollars worth of agricultural real estate. Once you own a quarter of land, you’re pretty much automatically in the 1% or 2% of most wealthy individuals.
     At least on paper (though that may not translate to cash), farmers are wealthy. Many are understandably concerned about passing those assets down and not having the next generation ruin the business. Some don’t even let their kids make business decisions until they’re almost completely out of the picture, which might not be until they’re in their 80s.
     There are two really good stories from The Richest Man in Babylon that deal with the concept of inheritance. I think they hold a lot of wisdom for farmers and landowners today.[/vc_column_text][ult_buttons btn_title=”SCHEDULE A FREE GRAIN MARKETING STRATEGY SESSION” btn_link=”url:https%3A%2F%2Fcashcowfarmer.clickfunnels.com%2Fmarketing-strategy||target:%20_blank” btn_align=”ubtn-center” btn_size=”ubtn-small” btn_title_color=”#ffffff” btn_bg_color=”#00ab61″ btn_hover=”ubtn-fade-bg” btn_bg_color_hover=”#ffffff” btn_title_color_hover=”#00ab61″ btn_icon_pos=”ubtn-sep-icon-at-left” btn_border_style=”solid” btn_color_border=”#ffffff” btn_color_border_hover=”#00ab61″ btn_border_size=”2″ btn_font_size=”18″][vc_column_text] Story #1: Goodbye and good luck, my son
     A certain father sent his son away for 10 years with a clear rule: if he came back broke, his father would donate all his assets to the church. But if he became a hard-working man, his father would hand over his “keys” and leave his son in charge of his own business and wealth.
     The kid found himself broke, having lost his gold, but out of desperation he read the five laws of gold that his father had written on a tablet. He put the laws into practice and came back extremely wealthy. For the bag of gold he’d been given, he repaid his father five times.

     Story #2: The luckiest man in Babylon
     Story #1 is a bit hard to translate to modern life. You can’t really kick your kids out for years and force them to make it or break it. Well, I guess you technically could…
     The second story is probably closer to what you should do. It’s one of my favorite stories in the book, the very last one in the volume. The title is “The Luckiest Man in Babylon.”
     An older gentleman was riding across the desert in a caravan with all his merchandise. He rode with the grandson of his recently passed business partner.
     When he looked over, he saw a cocky kid with jewelry all over and fancy robes. The grandfather had been well-respected, while the father was one of those men who spent all the money that came in. The kid was well on his way to following in his father’s footsteps.
     The old business partner saw an opportunity to help the young man. He said, “Would you like to learn how your grandfather and I became partners?”
     “No,” the young man said. “I just want to make money.” Yet, something happened that allowed the old man to tell his story anyway.[/vc_column_text][ult_buttons btn_title=”TRY CASHCOW FARMER FREE FOR 30 DAYS” btn_link=”url:https%3A%2F%2Fcashcowfarmer.clickfunnels.com%2F30daytrial||target:%20_blank” btn_align=”ubtn-center” btn_size=”ubtn-small” btn_title_color=”#ffffff” btn_bg_color=”#00ab61″ btn_hover=”ubtn-fade-bg” btn_bg_color_hover=”#ffffff” btn_title_color_hover=”#00ab61″ btn_icon_pos=”ubtn-sep-icon-at-left” btn_border_style=”solid” btn_color_border=”#ffffff” btn_color_border_hover=”#00ab61″ btn_border_size=”2″ btn_font_size=”18″][vc_column_text] They were coming up to Babylon and saw farmers. The old partner knew the slaves, even knew they had been farming there for 40 years. The kid asked how he knew, and he said he knew because he was shackled as a slave himself 40 years ago.
     He had become a slave unfairly and bounced around to a handful of cruel owners. In the midst of his misfortune, another slave he was chained to told him, “Hard work is the best friend I’ve ever known. You work hard, you’ll get recognized, and you’ll progress.”
     Eventually, the business partner met the kid’s grandfather, who was also a slave. When the kid learned his grandfather had been a slave, he could hardly believe it. How could it be so? His grandfather had been so well-respected by all!
     But he’d bought himself out of slavery by working hard; his work ethic was what led to his respectability.
     Later, the partner was transferred to the most brutal slave owner he’d ever had. But on the second day, the kid’s grandfather showed up and bought him out of slavery. They became business partners and became extremely successful because of how hard they both worked.
     By the end of the story, the kid had done a total 180 in his thinking. He took off his jewelry and started being respectful to everyone around. His life was changed forever.

     A suggestion for passing down the farm:
     Story #2 reveals a better way to onboard the next generation. You may not want to throw them to the wolves for 10 years. Probably, the best alternative is coaching them along and introducing them to your mentors and the people who brought you along.
     The relationship between parents in children is always filled with strife and tension. The kid will never be smarter than the dad, in the dad’s eyes, and vice versa.
     It’s hard to be a mentor to your own children; sometimes it’s better to introduce them to other mentors that can impact them.

     Conclusion
    2-1_5
     I strongly recommend reading The Richest Man in Babylon or listening to it once a year. It’s so valuable, and it’ll change your perspective on making money, spending it, and on how to handle your family.
     You’re riding on your combine all day anyway. Why not listen to material that will change your life while you’re at it?

    This post was based on an episode of the Cash Cow Farmer Podcast. To hear more content like this in audio form,     subscribe to the show here.[/vc_column_text][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”40″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”40″ screen_tablet_spacer_size=”30″ screen_mobile_spacer_size=”20″][/vc_column][/vc_row][vc_row dfd_row_config=”full_width_content” dfd_row_parallax=”off” dfd_row_responsive_enable=”off” dfd_enable_overlay=”off” css=”.vc_custom_1470889834038{background-color: #2d2d2d !important;}”][vc_column width=”3/4″][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”25″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”0″ screen_tablet_spacer_size=”0″ screen_mobile_spacer_size=”0″][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”25″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”25″ screen_tablet_spacer_size=”15″ screen_mobile_spacer_size=”10″][ultimate_heading heading_type=”customizable” heading_tag=”h3″ heading_content=”FREE GRAIN MARKETING STRATEGY SESSION!” main_heading_default_weight=”400″ main_heading_color=”#ffffff” subheading_type=”customizable” subheading_tag=”h5″ sub_heading_default_weight=”400″]DON’T LET THE MARKETS WIN…SCHEDULE YOUR FREE SESSION TODAY![/ultimate_heading][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”25″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”25″ screen_tablet_spacer_size=”15″ screen_mobile_spacer_size=”10″][/vc_column][vc_column width=”1/4″ column_responsive_mobile_classes=”dfd-remove-right-padding” column_responsive_mobile_resolutions=”dfd-apply-mobile” css=”.vc_custom_1470810100672{padding-right: 2% !important;}”][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”15″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”0″ screen_tablet_spacer_size=”0″ screen_mobile_spacer_size=”0″][bt_animation animation_type=”_flipX” duration=”2″ repeat=”2″ allow_margins=”yes” scroll_offset=”5px” no_hide=”yes”][ult_buttons btn_title=” FREE STRATEGY SESSION” btn_link=”url:https%3A%2F%2Fcashcowfarmer.clickfunnels.com%2Fmarketing-strategy||target:%20_blank” btn_align=”ubtn-center” btn_size=”ubtn-large” btn_title_color=”#ffffff” btn_bg_color=”#00ab61″ btn_hover=”ubtn-fade-bg” btn_bg_color_hover=”#ffffff” btn_title_color_hover=”#00ab61″ btn_icon_pos=”ubtn-sep-icon-at-left” btn_border_style=”solid” btn_color_border=”#ffffff” btn_color_border_hover=”#00ab61″ btn_border_size=”2″ btn_font_size=”18″][/bt_animation][vc_column_text]

    SCHEDULE YOUR FREE SESSION TODAY!

    [/vc_column_text][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”10″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”10″ screen_tablet_spacer_size=”10″ screen_mobile_spacer_size=”10″][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”15″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”15″ screen_tablet_spacer_size=”10″ screen_mobile_spacer_size=”10″][/vc_column][/vc_row]

  • Financial Principles of Ancient Babylon (Part 3): Debt Management

    [vc_row][vc_column][vc_column_text]1
    Don’t have time to read? Listen here:
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     One thing is clear in my conversations with farmers: the biggest challenge they face is making their debt payments.
     Part three of our series on the financial principles of ancient Babylon pulls from The Richest Man in Babylon. Today’s lesson is about managing your debt and working with the holders of your debt to have a realistic plan in place.
     Debt can just pile up. Have you ever had credit card debt? If you make the minimum payment on $5,000, it takes something like 40 years to pay off. The interest rates can really crush a person.
     Thankfully, a story from ancient Babylon can help us today.

    The story of Dabasir, the camel trader
    2-2_6    [/vc_column_text][ult_buttons btn_title=”SCHEDULE A FREE GRAIN MARKETING STRATEGY SESSION” btn_link=”url:https%3A%2F%2Fcashcowfarmer.clickfunnels.com%2Fmarketing-strategy||target:%20_blank” btn_align=”ubtn-center” btn_size=”ubtn-small” btn_title_color=”#ffffff” btn_bg_color=”#00ab61″ btn_hover=”ubtn-fade-bg” btn_bg_color_hover=”#ffffff” btn_title_color_hover=”#00ab61″ btn_icon_pos=”ubtn-sep-icon-at-left” btn_border_style=”solid” btn_color_border=”#ffffff” btn_color_border_hover=”#00ab61″ btn_border_size=”2″ btn_font_size=”18″][vc_column_text] Dabasir, a man recently married, was living over his means and had a lot of debt. He sent his wife back to live with her father and tried to figure out how to hide.
     He fell in with the wrong crowd, a group of robbers who robbed merchants. One day, they robbed the wrong merchant, one who had a local tribe protecting him. Several of Dabasir’s fellow robbers were killed, and he himself was enslaved.
     He was sold to a tribe, where one of the four wives of the tribesman soon had mercy on him.
     He told her he was not born a slave but a free man. She asked, “Do you have the heart of a slave or a free man? Because you’re a slave now.” That question troubled him.
     She gave him a chance to escape, and he took that chance, trekking across the desert back to Babylon. He had decided that the will of a free man was to face his debt like a challenge and overcome it rather than collapse under the weight of it.
     After almost dying in the desert, he made it back. He met with all his debt holders and laid out a plan. He would live off 70% of his income, use 20% to pay off the debt, and keep the final 10%. (Remember, the first cure for a lean purse is to pay yourself 10% of what you earn.)
     That’s what he did. He divvied out his 20% proportionally. As a camel trader his income fluctuated, but he paid more when he could and less when he couldn’t.  In that way, he paid off the debt in three years.[/vc_column_text][ult_buttons btn_title=”TRY CASHCOW FARMER FREE FOR 30 DAYS” btn_link=”url:https%3A%2F%2Fcashcowfarmer.clickfunnels.com%2F30daytrial||target:%20_blank” btn_align=”ubtn-center” btn_size=”ubtn-small” btn_title_color=”#ffffff” btn_bg_color=”#00ab61″ btn_hover=”ubtn-fade-bg” btn_bg_color_hover=”#ffffff” btn_title_color_hover=”#00ab61″ btn_icon_pos=”ubtn-sep-icon-at-left” btn_border_style=”solid” btn_color_border=”#ffffff” btn_color_border_hover=”#00ab61″ btn_border_size=”2″ btn_font_size=”18″][vc_column_text] What this means for farmers
     Debt plagues many farmers and business people who aggressively grow their business during high prices and live high on the hog. Eventually, they feel buried.
     I know debt management is a lot less personal today. It’s not like you can go to Fanny Mae and Freddy Mac and say you’re not able to make your payment right now.
     But you can get all your debtors together and say, “This year is going to be a hard year for me, but I’m going to live off of rice and beans and minimize my personal expenses. Don’t increase my interest rate; don’t kill my credit.”
     A lot of farmers did this in the ‘80s. I’ve met them. They told me they went in with their bankers, made deals, then made good on those deals. On the Cash Cow Farmer Podcast, my co-host James even told the story of a friend who negotiated his student loan debt down from $120,000 to $40,000 by paying more in a shorter amount of time.
     Also, it’s not popular, but bankruptcy is a financial reorganization. If you’ve watched The Big Short, you know how people got crushed by adjustable rate mortgages.
     As a farmer, you might have a closer relationship with the holders of your debt and have an opportunity to make due on it. Many farmers still work with small banks, and they’re a lot more flexible than larger institutions.

     Conclusion
     Remember Dabasir’s breakdown: live off 70%, pay debts with 20%, and keep 10%. Even if you’re living in your car, keep that 10%.
     Meet with holders of your debt to have a realistic payment plan in which you don’t get harassed if your income is down. If you present a solid plan and hold yourself to it, your debt holders will be happy to receive a timely payoff…

     This post was based on an episode of the Cash Cow Farmer Podcast. To hear more content like this in audio form, subscribe to the show here.[/vc_column_text][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”40″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”40″ screen_tablet_spacer_size=”30″ screen_mobile_spacer_size=”20″][/vc_column][/vc_row][vc_row dfd_row_config=”full_width_content” dfd_row_parallax=”off” dfd_row_responsive_enable=”off” dfd_enable_overlay=”off” css=”.vc_custom_1470889834038{background-color: #2d2d2d !important;}”][vc_column width=”3/4″][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”25″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”0″ screen_tablet_spacer_size=”0″ screen_mobile_spacer_size=”0″][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”25″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”25″ screen_tablet_spacer_size=”15″ screen_mobile_spacer_size=”10″][ultimate_heading heading_type=”customizable” heading_tag=”h3″ heading_content=”FREE GRAIN MARKETING STRATEGY SESSION!” main_heading_default_weight=”400″ main_heading_color=”#ffffff” subheading_type=”customizable” subheading_tag=”h5″ sub_heading_default_weight=”400″]DON’T LET THE MARKETS WIN…SCHEDULE YOUR FREE SESSION TODAY![/ultimate_heading][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”25″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”25″ screen_tablet_spacer_size=”15″ screen_mobile_spacer_size=”10″][/vc_column][vc_column width=”1/4″ column_responsive_mobile_classes=”dfd-remove-right-padding” column_responsive_mobile_resolutions=”dfd-apply-mobile” css=”.vc_custom_1470810100672{padding-right: 2% !important;}”][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”15″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”0″ screen_tablet_spacer_size=”0″ screen_mobile_spacer_size=”0″][bt_animation animation_type=”_flipX” duration=”2″ repeat=”2″ allow_margins=”yes” scroll_offset=”5px” no_hide=”yes”][ult_buttons btn_title=” FREE STRATEGY SESSION” btn_link=”url:https%3A%2F%2Fcashcowfarmer.clickfunnels.com%2Fmarketing-strategy||target:%20_blank” btn_align=”ubtn-center” btn_size=”ubtn-large” btn_title_color=”#ffffff” btn_bg_color=”#00ab61″ btn_hover=”ubtn-fade-bg” btn_bg_color_hover=”#ffffff” btn_title_color_hover=”#00ab61″ btn_icon_pos=”ubtn-sep-icon-at-left” btn_border_style=”solid” btn_color_border=”#ffffff” btn_color_border_hover=”#00ab61″ btn_border_size=”2″ btn_font_size=”18″][/bt_animation][vc_column_text]

    SCHEDULE YOUR FREE SESSION TODAY!

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  • Financial Principals of Ancient Babylon (Part 2) : 5 Laws of Gold

    [vc_row][/vc_row][vc_row][vc_column][vc_column_text]1-1
    Don’t have time to read? Listen here:
    [smart_track_player url=”http://traffic.libsyn.com/cashcowfarmer/Financial_Principals_of_Ancient_Babylon_Part_2.mp3″ social=”true” social_twitter=”true” social_facebook=”true” social_gplus=”true” ]

     One weekend, my son and I went to Minneapolis, and I had him listen to The Richest Man in Babylon. I wanted him to hear it, since it’s had such an impact on me.
     Then I found that the one listen wasn’t enough for me. I listened to it again the next day after our trip, and I couldn’t help thinking about how much rich wisdom it held.
     It’s especially helpful for where farming’s at right now, when things are tight and stress is high. I just had to share what I’ve learned with you. (more…)

  • Financial principals of ancient Babylon (Part 1) : 7 Cures for a Lean Purse

    [vc_row][vc_column][vc_column_text]The 7 cures for a lean purse[/vc_column_text][vc_column_text]1
    Don’t have time to read? Listen to it here:
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     The Richest Man in Babylon is one of my favorite books of all time. It’s so good, I read it twice in one weekend.
     Babylon was one of the wealthiest cities of ancient times, because of the financial principles of its people. They recorded stories and fables with these lessons on clay tablets which were unearthed not too long ago. Those tablets are the foundation for the several stories that make up The Richest Man in Babylon.
     One of my favorite principles from the book is the one we’ll be discussing today: seven cures for a lean purse. (more…)

  • 5 of Ghengis Khan’s Strategies To Conquer Modern Farming

    [vc_row][vc_column][vc_column_text]Strategy learned from the great Khan[/vc_column_text][vc_column_text]0_22
    Don’t have time to read? Listen t it here:
    [smart_track_player url=”http://traffic.libsyn.com/cashcowfarmer/5_of_Ghengis_Khans_Strategies_To_Conquer_Modern_Farming_Master.mp3″ social=”true” social_twitter=”true” social_facebook=”true” social_gplus=”true” ]

     You may be wondering: what was I reading to come up with this title?
     It’s true that I finished a book called Genghis Khan and the Making of the Modern World. But I’ve studied Genghis Khan quite a bit in the past as well.
     The reason why is that the Mongol dynasty made Alexander the Great’s look pitiful. Genghis Khan reorganized the world: he connected China to the west and developed gunpowder. For around 100 years in the 12th and 13th centuries the Mongols dominated from Italy to China, to Russia, to India, to Turkey—basically most of the known world.
     The Mongol warriors would easily defeat the huge European armies. After engaging in battle for a short while the Mongols would ride away as if in retreat. They would then lead the overconfident European armies into a trip and easily defeat them.
     Granted, Genghis Kahn was about the worst human being you can imagine. He would go into a city and kill everyone if they didn’t cooperate.
     But on strategy alone, there’s a lot for farmers to learn from Genghis Khan and the Mongols.

     1) Speed and efficiency
     Speed and efficiency were the Mongols’ secret weapons. They would travel lighter than everyone, unlike big armies with huge caravans. Even though each warrior had five horses, as long as they had good pastures they were good.
     The Mongols would eat mice and birds, and their armor and clothing were sewn-together skins of field mice. They’d drink muddy water and turn raw meat into a form of jerky by sticking it under their saddles. While frozen lakes were a barrier to most, the Mongols would make skates and speed across them.
     Let’s connect that to farming. If you’re efficient, farming same amount of land with half the machinery as another farmer, that’s going to pay big dividends.
     I’ve got a neighbor with a 120-foot corn planter, and he can plant all of his corn in less than a week. It blows me away, since most farmers take a month or at least a couple of weeks.
     Everyone thought he was nuts buying that planter, but it’s paid off.[/vc_column_text][ult_buttons btn_title=”TRY CASHCOW FARMER FREE FOR 30 DAYS” btn_link=”url:https%3A%2F%2Fcashcowfarmer.clickfunnels.com%2F30daytrial||target:%20_blank” btn_align=”ubtn-center” btn_size=”ubtn-small” btn_title_color=”#ffffff” btn_bg_color=”#00ab61″ btn_hover=”ubtn-fade-bg” btn_bg_color_hover=”#ffffff” btn_title_color_hover=”#00ab61″ btn_icon_pos=”ubtn-sep-icon-at-left” btn_border_style=”solid” btn_color_border=”#ffffff” btn_color_border_hover=”#00ab61″ btn_border_size=”2″ btn_font_size=”18″][vc_column_text] 2) Winning battles without fighting
     The Khan would intimidate cities into submission before losing any of his men, which is why he was able to conquer so much, so fast. He’d go to the smaller cities and scare everybody, then overwhelm large cities who were brimming with refugees and conquer them.
     With farming, what I’m talking about here is reputation management. I know some farmers who say, “I don’t know why they wouldn’t sell land to me or rent the land to me.” The answer could be related to reputation.
     It doesn’t mean you have to go out and donate all your money, but getting things without fighting for them is the moral of this one. If you can have a good reputation in your community and give back, you’re going to get opportunities when people retire and so on. The community of farming is tight-knit, so keep your reputation positive. Pay it forward as they say…

     3) Strength in intelligence—not in numbers1-1_8
     Every morning, Mongol scouts had a routine making sure things were good within their army. Then they would scout everything, sometimes for years in advance, seeing what kind of weaponry and tactics various civilizations used.
     In agriculture, think about what happened when commodity prices drove way up. A lot of farmers, because of poor intelligence, set themselves up for failure with huge purchases and liabilities that could only be sustained under such inflated market prices.
     Khan was known for going into a situation way before and being smarter than the competition (in his case, they were enemies). If you can analyze the value of expanding your farm to certain properties, or buying certain machinery, you’ll be looking at basic return on investment and making sure your operation will be positively impacted.
     At the end of the day, it doesn’t matter how much you farm. What matters is the bottom line. [/vc_column_text][ult_buttons btn_title=”SCHEDULE A FREE GRAIN MARKETING STRATEGY SESSION” btn_link=”url:https%3A%2F%2Fcashcowfarmer.clickfunnels.com%2Fmarketing-strategy||target:%20_blank” btn_align=”ubtn-center” btn_size=”ubtn-small” btn_title_color=”#ffffff” btn_bg_color=”#00ab61″ btn_hover=”ubtn-fade-bg” btn_bg_color_hover=”#ffffff” btn_title_color_hover=”#00ab61″ btn_icon_pos=”ubtn-sep-icon-at-left” btn_border_style=”solid” btn_color_border=”#ffffff” btn_color_border_hover=”#00ab61″ btn_border_size=”2″ btn_font_size=”18″][vc_column_text] 4) Swift and reliable communication
     The Mongols were illiterate. Can you imagine trying to communicate across a growing empire or on a battlefield without written words? They would communicate by sound, with arrows that they would drill holes in.
     And all the orders would have to be spoken man to man. Remember telephone? Imagine playing it while in war. What they would do was develop the orders into a rhyming song and add verses as information got added, making sure it was catchy so it never got distorted.
     In agriculture, we’re not developing rhymes, but we are communicating with our employees. I’d say communication is one of the biggest causes of inefficiency in most modern farms. Almost everything that goes wrong ties back to miscommunication, whether it’s a truck driver who sells under the wrong entity or one who goes to the wrong field, or whatever.
     Have systems in place where your team has a daily huddle, a weekly recap, or something of the sort.

     5) Undeniable loyalty
     The Khan was ingenious in securing loyalty. He was extremely generous to his troops.
     Most generals would take all the good stuff and leave the leftovers to their men, so they were never loyal and would leave for the next best opportunity. But he had a rule that if a soldier died, his family would get a soldier’s share in the proceeds. So people were not afraid to die, whereas most of the time back then if you died your family was done for.
     You can garner that same loyalty in your own employees. If you reward them for their good work, you’ll have a loyal team that takes ownership for their work, and you’ll see tremendous results.

     Conclusion
     Farmers can take all the good strategies of Genghis Khan and be set to run a very successful operation.
     You should probably avoid all the murdering and pillaging, though.

     This post was based on an episode of the Cash Cow Farmer Podcast. You subscribe to it on iTunes here.
     Or if you don’t use iTunes, you can listen to every episode here.[/vc_column_text][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”40″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”40″ screen_tablet_spacer_size=”30″ screen_mobile_spacer_size=”20″][/vc_column][/vc_row][vc_row dfd_row_config=”full_width_content” dfd_row_parallax=”off” dfd_row_responsive_enable=”off” dfd_enable_overlay=”off” css=”.vc_custom_1470889834038{background-color: #2d2d2d !important;}”][vc_column width=”3/4″][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”25″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”0″ screen_tablet_spacer_size=”0″ screen_mobile_spacer_size=”0″][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”25″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”25″ screen_tablet_spacer_size=”15″ screen_mobile_spacer_size=”10″][ultimate_heading heading_type=”customizable” heading_tag=”h3″ heading_content=”MAXIMIZE PROFITS WITH CASHCOW FARMER!” main_heading_default_weight=”400″ main_heading_color=”#ffffff” subheading_type=”customizable” subheading_tag=”h5″ sub_heading_default_weight=”400″]POWERFUL FARM FINANCIAL SOFTWARE THAT IS AFFORDABLE & EASY TO USE![/ultimate_heading][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”25″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”25″ screen_tablet_spacer_size=”15″ screen_mobile_spacer_size=”10″][/vc_column][vc_column width=”1/4″ column_responsive_mobile_classes=”dfd-remove-right-padding” column_responsive_mobile_resolutions=”dfd-apply-mobile” css=”.vc_custom_1470810100672{padding-right: 2% !important;}”][dfd_spacer screen_wide_resolution=”1280″ screen_wide_spacer_size=”15″ screen_normal_resolution=”1024″ screen_tablet_resolution=”800″ screen_mobile_resolution=”480″ screen_normal_spacer_size=”0″ screen_tablet_spacer_size=”0″ screen_mobile_spacer_size=”0″][bt_animation animation_type=”_flipX” duration=”2″ repeat=”2″ allow_margins=”yes” scroll_offset=”5px” no_hide=”yes”][ult_buttons btn_title=” FREE 30 DAY TRIAL” btn_link=”url:https%3A%2F%2Fcashcowfarmer.clickfunnels.com%2F30daytrial||target:%20_blank” btn_align=”ubtn-center” btn_size=”ubtn-large” btn_title_color=”#ffffff” btn_bg_color=”#00ab61″ btn_hover=”ubtn-fade-bg” btn_bg_color_hover=”#ffffff” btn_title_color_hover=”#00ab61″ btn_icon_pos=”ubtn-sep-icon-at-left” btn_border_style=”solid” btn_color_border=”#ffffff” btn_color_border_hover=”#00ab61″ btn_border_size=”2″ btn_font_size=”18″][/bt_animation][vc_column_text]

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