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| I agree completely. There may be a little push back from the accountant because it's likely your working capital will take a hit. It's all good unless you want to add new debt. We all had a pretty good chance to get on top of our lingering debts with high grain prices and it looks like it's just not going to be as good. Farming is still counter cyclical to the rest of the economy in general, but it doesn't mean we will have 'excess' income very long. No shortage of very successful operations had their start with a patriarch getting debt free as soon as they could. Of course some of those same operations go back to the dust because of thinking the opposite way.
However, debt isn't the worst thing in the world and without capitalism many of us couldn't even get a start. Knowing how much debt a guy can handle and for how long is often beyond calculation - it's more of a function of how hard a guy will work towards a goal and what sacrifices - those new pickups going from $50K to $6K of value in 5 years would be part of that sacrifice (I know it looks bad at seed meetings and the coffee shop). When debt is a tool that gets used properly, it's a good thing. Like any tool though, it can prove to be inappropriate for the business and not used. Bankers naturally feel a little different about this. | |
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Paying off Long Term Loans? Your Thoughts.
