Ways to Build Wealth ?

[Bright Raven]

Back to the original post - Assuming your personal house is being separated from the ranch. Good fencing improvements seems pretty logical to me. It can increase our carrying capacity, maximize management flexibility and holds a decent value well beyond depreciation. Improving water access would be right up there as well in most locations. How would buying more land look with your situation?

I brought public water to my farm headquarters. Then I put in a Richie Heated Water system on public water. Since then, I have put in water access points at my chute and where I can put tanks on float fill systems. Capital expenditures for the water system can be depreciated. Since that was one of my first efforts, mine is fully depreciated. The wealth it represents now will not be captured until I sell the estate.

Personally, I see buying more property a separate function.

Something not discussed is the timing of selling the estate. If you hold the estate too long and the infrastructure no longer has value - then you are not recouping your accumulated wealth. For me personally, I would like to sell my estate in the next 5 years.

 

[True Grit Farms]

Brook hill Angus Quote - "Right now there are only 55 progeny of Raindance according to the Angus Association that are proven via DNA parentage. We have two of them, they turned out pretty darn nice. Would I sell them for $2k, nope, $10k, still no. Could I move them quickly for $7500, probably. What I'm getting at is this, $150 in semen (both settled first try) turned into $15k in daughters that are going to produce a lot more daughters."

So at what point do those heifers become $2k because they're common? Wouldn't taking a flush or two and send them on for $15k put you ahead? The second I would try it there would be some new bizarre genetic condition carrier gene announced bringing my high dollar cows back to hamburger. That being said I have benefited financially from using AI and registered cattle to sell so far. Just nothing like your examples...

Back to the original post - Assuming your personal house is being separated from the ranch. Good fencing improvements seems pretty logical to me. It can increase our carrying capacity, maximize management flexibility and holds a decent value well beyond depreciation. Improving water access would be right up there as well in most locations. How would buying more land look with your situation?

How long have you been in the registered Angus business for? And why are you still having to chase someone else's dreams? I see what Friendship Farms and Bridges Angus have produced as new kids on the block in the AAA. They make us wonder what we were thinking sometimes by giving up and going commercial.
our thinking

 

[True Grit Farms]

Back to the original post - Assuming your personal house is being separated from the ranch. Good fencing improvements seems pretty logical to me. It can increase our carrying capacity, maximize management flexibility and holds a decent value well beyond depreciation. Improving water access would be right up there as well in most locations. How would buying more land look with your situation?

I brought public water to my farm headquarters. Then I put in a Richie Heated Water system on public water. Since then, I have put in water access points at my chute and where I can put tanks on float fill systems. Capital expenditures for the water system can be depreciated. Since that was one of my first efforts, mine is fully depreciated. The wealth it represents now will not be captured until I sell the estate.

Personally, I see buying more property a separate function.

Something not discussed is the timing of selling the estate. If you hold the estate too long and the infrastructure no longer has value - then you are not recouping your accumulated wealth. For me personally, I would like to sell my estate in the next 5 years.

I'd have it listed for sale tomorrow if I was planning on selling. There's some 1031 exchanges happening that might be really good. I think the train might have hit the top of the hill no matter what happens in 2020.

 

[Bright Raven]

Back to the original post - Assuming your personal house is being separated from the ranch. Good fencing improvements seems pretty logical to me. It can increase our carrying capacity, maximize management flexibility and holds a decent value well beyond depreciation. Improving water access would be right up there as well in most locations. How would buying more land look with your situation?

I brought public water to my farm headquarters. Then I put in a Richie Heated Water system on public water. Since then, I have put in water access points at my chute and where I can put tanks on float fill systems. Capital expenditures for the water system can be depreciated. Since that was one of my first efforts, mine is fully depreciated. The wealth it represents now will not be captured until I sell the estate.

Personally, I see buying more property a separate function.

Something not discussed is the timing of selling the estate. If you hold the estate too long and the infrastructure no longer has value - then you are not recouping your accumulated wealth. For me personally, I would like to sell my estate in the next 5 years.

I'd have it listed for sale tomorrow if I was planning on selling. There's some 1031 exchanges happening that might be really good. I think the train might have hit the top of the hill no matter what happens in 2020.

I think the train has hit the top of the hill also. What really worries me is the outlook for Agricultural land going forward. I just don't see new prospects for folks wanting cattle property which is what I have. This is not crop land but it does grow good forage. The average cattle producer in this county must be 45 or older. When the old guys start getting out, land may go down.

 

[TennesseeTuxedo]

I see your line of thinking..... This was shaping up to be an excellent thread.....maybe you can start one on how every dollar you spend on the farm is waste and how the sun never shines. Lets get this one back on track.

Amen!

Wow TT another one of your insightful one liners that offer absolutely nothing.
But that's par for the course isn't it.

I know it's useless trying to pound any good sense into that thick skull of yours so I've given up. I do admire those who are striving to enlighten you. Bless your heart.

 

[Beefeater]

How long have you been in the registered Angus business for? And why are you still having to chase someone else's dreams? I see what Friendship Farms and Bridges Angus have produced as new kids on the block in the AAA. They make us wonder what we were thinking sometimes by giving up and going commercial.
our thinking[/quote]

Still under the average turnover for new AAA. Will I stick with it? Don't know, but I appreciate genetic tracking as it still fascinates me and have seen increased marketing flexibility with a small hobby herd as mine. Sold a couple yearlings that could've been registered for significantly more than what sale barn would've yielded and rented out registered yearling adding to his value before going to butcher. Still very new, trying to learn and find my nieche. Also dabbling in Beefmaster. Starting round 2 of upgrading this year due to increased outside interest in registered females.

As far as chasing someone else's dreams - I don't design my own bullets, make my own boots, build my own vehicles and a multitude of other things simply because I value the time, design and product others produce. There are numerous cattle producers light years ahead of anywhere I'll end up and I appreciate their product. However, when I cross some of my Beefmasters and Angus there will be very few progeny - I'll let this limited CT group get in on the ground floor for the mere sum of $4,500 for weaned heifer calves! A bargain by some standards!

 

[Dave]

The best way to build wealth if that is your plan/issue is to keep money in your pocket. I have a good friend who is a self made millionaire. He never has bills smaller than $100 in his wallet. You will think twice before breaking a $100. Smaller bills are spent without thinking. He says that you will really think about before spending $10,000 yet most people will spend $5,000-$10,000 a year on nickle and dime stuff. Buying a soda from a convenience store when filling a bottle of water from the tap at home is free. The best way to build wealth is to watch carefully how you spend the wealth you have.

 

[Caustic Burno]

The best way to build wealth if that is your plan/issue is to keep money in your pocket. I have a good friend who is a self made millionaire. He never has bills smaller than $100 in his wallet. You will think twice before breaking a $100. Smaller bills are spent without thinking. He says that you will really think about before spending $10,000 yet most people will spend $5,000-$10,000 a year on nickle and dime stuff. Buying a soda from a convenience store when filling a bottle of water from the tap at home is free. The best way to build wealth is to watch carefully how you spend the wealth you have.

My point exactly.
Well written.

 

[Stocker Steve]

What really worries me is the outlook for Agricultural land going forward. I just don't see new prospects for folks wanting cattle property which is what I have. This is not crop land but it does grow good forage. The average cattle producer in this county must be 45 or older. When the old guys start getting out, land may go down.

This ag operator age thing is mostly bull. When smaller crop or confinement dairy guys retire here - - the other operations just swallow them up. "Go big or go home."

Beef operations seem a bit different. See quit a few two or three way splits here:
- one buys the building site
- one buys the pasture
- one buys the hunting land

 

[Bright Raven]

The best way to build wealth if that is your plan/issue is to keep money in your pocket. I have a good friend who is a self made millionaire. He never has bills smaller than $100 in his wallet. You will think twice before breaking a $100. Smaller bills are spent without thinking. He says that you will really think about before spending $10,000 yet most people will spend $5,000-$10,000 a year on nickle and dime stuff. Buying a soda from a convenience store when filling a bottle of water from the tap at home is free. The best way to build wealth is to watch carefully how you spend the wealth you have.

I bet he has already made his funeral arrangements.

 

[CattleMan1920]

Brook hill Angus Quote - "Right now there are only 55 progeny of Raindance according to the Angus Association that are proven via DNA parentage. We have two of them, they turned out pretty darn nice. Would I sell them for $2k, nope, $10k, still no. Could I move them quickly for $7500, probably. What I'm getting at is this, $150 in semen (both settled first try) turned into $15k in daughters that are going to produce a lot more daughters."

So at what point do those heifers become $2k because they're common? Wouldn't taking a flush or two and send them on for $15k put you ahead? The second I would try it there would be some new bizarre genetic condition carrier gene announced bringing my high dollar cows back to hamburger. That being said I have benefited financially from using AI and registered cattle to sell so far. Just nothing like your examples...

Back to the original post - Assuming your personal house is being separated from the ranch. Good fencing improvements seems pretty logical to me. It can increase our carrying capacity, maximize management flexibility and holds a decent value well beyond depreciation. Improving water access would be right up there as well in most locations. How would buying more land look with your situation?

How long have you been in the registered Angus business for? And why are you still having to chase someone else's dreams? I see what Friendship Farms and Bridges Angus have produced as new kids on the block in the AAA. They make us wonder what we were thinking sometimes by giving up and going commercial.
our thinking

Our first registered Angus were purchased in 1967, we have had all registered Angus ever since. We sell private treaty. One year we sold 30 cow calf pairs to someone setting up a registered herd. We aren't trying to chase anyone's dreams, that's a confusing statement. If someone does it better than me, then I will use their sires. I drive a Ford F-250 because I can't build a truck as well as Ford, I have an IPhone because thus far I have not had the desire or ability to build my own phone. Using an SAV sire or any other top operation is using my brain, not chasing someone else's dream. I guess if I let pride step in, I would convince myself that my bulls are FAR better than SAV or Connealy, but I don't think like that.

 

[MO-Ruminants]

Beef operations seem a bit different. See quit a few two or three way splits here:
- one buys the building site
- one buys the pasture
- one buys the hunting land

This is a fascinating method that I have not heard of. May I trouble you to elaborate a bit? Is this typically done with 3 parties within a family? Or just a random home-dweller, rancher and hunter entering an agreement to purchase a piece of real estate together?

 

[CattleMan1920]

The best way to build wealth if that is your plan/issue is to keep money in your pocket. I have a good friend who is a self made millionaire. He never has bills smaller than $100 in his wallet. You will think twice before breaking a $100. Smaller bills are spent without thinking. He says that you will really think about before spending $10,000 yet most people will spend $5,000-$10,000 a year on nickle and dime stuff. Buying a soda from a convenience store when filling a bottle of water from the tap at home is free. The best way to build wealth is to watch carefully how you spend the wealth you have.

I bet he has already made his funeral arrangements.

Small thinking leads to small results. I've been around misers and they never innovate or lead, they are just in survival mode. There is plenty of money in this world, it's just how you view things. If you think times are hard, they will be hard for you. Mindset is everything. We aren't in the Great Depression but the way some people think, they might just make it that way for themselves. We have been ridiculed around here for being aggressive with our technology and desire to breed a much better animal, I see it as jealousy because the people saying such things are unwilling to take risks to make it happen, or they are just plain lazy. If you are doing really good work, no matter what you do, money will come to you.

We have installed waterers, but have chose to repair old fence, keep the old barns (one was built in 1850's), etc. The only thing that makes sense for us in this notoriously low margin business is genetics and technology. All the other non essential things can come later once the herd is bigger with deeper genetics.

As far as the old timer advice about worthless papers and salvage value. I hear that nonsense all the time. We had a horrible crash in the U.S. in 2008, full meltdown, yet I assure you SAV, Connealy, and Baldridge weren't offering their best dams for salvage value. Those "papers" that they had in their hands were returning more than any stock, and definitely more than most treasury or muni bonds. I don't want a $10k wad of bills in my pocket, that's just to show off to other old timers at the feed store (my Grandfather did the same, drove a Lincoln, and wore a suit in a little podunk town)

High quality cattle are liquid, good times or bad.

 

[Dave]

The best way to build wealth if that is your plan/issue is to keep money in your pocket. I have a good friend who is a self made millionaire. He never has bills smaller than $100 in his wallet. You will think twice before breaking a $100. Smaller bills are spent without thinking. He says that you will really think about before spending $10,000 yet most people will spend $5,000-$10,000 a year on nickle and dime stuff. Buying a soda from a convenience store when filling a bottle of water from the tap at home is free. The best way to build wealth is to watch carefully how you spend the wealth you have.

I bet he has already made his funeral arrangements.

I don't know about funeral arrangements but I do know that he has a life insurance policy to cover the inheritance tax his kids will have to pay. He is one of the smartest, hardest working men I have ever known. Fifteen years ago he shared with me that his net worth was about 15 million. I am sure it went up a lot since then. He didn't get there with the money he saved on soda. But those habits helped him build the capital to go to work for him. And he is not afraid to spend money. I have seen him write checks that were double or triple my net worth without blinking. Those checks were written after careful study and he knew that the money was coming back plus significant profit.

 

[Caustic Burno]

The best way to build wealth if that is your plan/issue is to keep money in your pocket. I have a good friend who is a self made millionaire. He never has bills smaller than $100 in his wallet. You will think twice before breaking a $100. Smaller bills are spent without thinking. He says that you will really think about before spending $10,000 yet most people will spend $5,000-$10,000 a year on nickle and dime stuff. Buying a soda from a convenience store when filling a bottle of water from the tap at home is free. The best way to build wealth is to watch carefully how you spend the wealth you have.

I bet he has already made his funeral arrangements.

I don't know about funeral arrangements but I do know that he has a life insurance policy to cover the inheritance tax his kids will have to pay. He is one of the smartest, hardest working men I have ever known. Fifteen years ago he shared with me that his net worth was about 15 million. I am sure it went up a lot since then. He didn't get there with the money he saved on soda. But those habits helped him build the capital to go to work for him. And he is not afraid to spend money. I have seen him write checks that were double or triple my net worth without blinking. Those checks were written after careful study and he knew that the money was coming back plus significant profit.

Way more than we know.

https://www.goodreads.com/book/show/998 ... _Next_Door

 

[Bovine breeder]

I bet he has already made his funeral arrangements.

I don't know about funeral arrangements but I do know that he has a life insurance policy to cover the inheritance tax his kids will have to pay. He is one of the smartest, hardest working men I have ever known. Fifteen years ago he shared with me that his net worth was about 15 million. I am sure it went up a lot since then. He didn't get there with the money he saved on soda. But those habits helped him build the capital to go to work for him. And he is not afraid to spend money. I have seen him write checks that were double or triple my net worth without blinking. Those checks were written after careful study and he knew that the money was coming back plus significant profit.

Way more than we know.

https://www.goodreads.com/book/show/998 ... _Next_Door

There's a brand new book out called everyday millionaires. It's been out about two weeks. It's by Chris Hogan, part of Dave Ramsey's team. I think that book studied around 700 millionaires. This new one studied 10,000. I have a copy but haven't opened it yet. It dives into demographics and habits and income over their working years. It will be a great read

 

[ddd75]

easy to build wealth. work hard, work smart, eat less.

 

[True Grit Farms]

Being a millionaire isn't what it once was.

 

[Caustic Burno]

Being a millionaire isn't what it once was.

Money doesn't buy happiness but the lack of it purchases a lot of misery's.

 

[bball]

The best way to build wealth if that is your plan/issue is to keep money in your pocket. I have a good friend who is a self made millionaire. He never has bills smaller than $100 in his wallet. You will think twice before breaking a $100. Smaller bills are spent without thinking. He says that you will really think about before spending $10,000 yet most people will spend $5,000-$10,000 a year on nickle and dime stuff. Buying a soda from a convenience store when filling a bottle of water from the tap at home is free. The best way to build wealth is to watch carefully how you spend the wealth you have.

I bet he has already made his funeral arrangements.

Small thinking leads to small results. I've been around misers and they never innovate or lead, they are just in survival mode. There is plenty of money in this world, it's just how you view things. If you think times are hard, they will be hard for you. Mindset is everything. We aren't in the Great Depression but the way some people think, they might just make it that way for themselves. We have been ridiculed around here for being aggressive with our technology and desire to breed a much better animal, I see it as jealousy because the people saying such things are unwilling to take risks to make it happen, or they are just plain lazy. If you are doing really good work, no matter what you do, money will come to you.

We have installed waterers, but have chose to repair old fence, keep the old barns (one was built in 1850's), etc. The only thing that makes sense for us in this notoriously low margin business is genetics and technology. All the other non essential things can come later once the herd is bigger with deeper genetics.

As far as the old timer advice about worthless papers and salvage value. I hear that nonsense all the time. We had a horrible crash in the U.S. in 2008, full meltdown, yet I assure you SAV, Connealy, and Baldridge weren't offering their best dams for salvage value. Those "papers" that they had in their hands were returning more than any stock, and definitely more than most treasury or muni bonds. I don't want a $10k wad of bills in my pocket, that's just to show off to other old timers at the feed store (my Grandfather did the same, drove a Lincoln, and wore a suit in a little podunk town)

High quality cattle are liquid, good times or bad.

While i have no doubts they were not, I do personally know several folks that had those names on their cattle paperwork at that time, and unfortunately were selling for salvage. I agree, high quality cattle are liquid...papers or not.
The last line of the first paragraph is spot on.