Posted 5/23/2020 13:32 (#8275389 - in reply to #8274629) Subject: RE: Son statrting farming
It really depends on the personalities. A person feels the success of making money in a fair deal instead of hanging on a handout. I knew early on my dad did not have what’s best for me on his mind so we kept everything separate and still operate separate today. There is no way you can get ahead taking a handout from someone who just wants to control your every move. If you do not have that mindset towards your son you still might want to charge him custom rates. Custom rates for everything helps him create realistic cash flows for dealing with others.
You can help him in other ways like making a realistic transition plan, building your business with his generation in mind, maybe even co signing a large note if he has the correct numbers in the cash flow... the correct numbers won’t be in there if your giving him a freebie on equipment.
Sometimes a hand out to help really just puts out the fire of competitiveness a young guy needs to get out of that situation.
Fair is fair. His benefits are having a reliable timely custom farmer that does a quality job which if we were all honest... if we could have that none of us would probably own the equipment we have
Charge custom rates not to be cruel but so he sees real life numbers. If he runs the equipment pay him a fair wage. I bet you won’t be getting rich off the deal and you won’t be holding him in the poor house either. Custom rates are often thin margins anyways.
Look at it this way... would you gift him $1000 tomorrow for no reason? It would be better to just write him a check for nothing and have him know real life prices than to play games with his business.