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paying cash vs financing
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paul the original
Posted 9/28/2020 12:11 (#8519582 - in reply to #8519181)
Subject: RE: paying cash vs financing


southern MN
It’s nice to get to a point to not have to finance the 7 year or less stuff. Although, then you are just in the way of real business people and a drag on society, too small to be worth anyone’s time.

Financing big items, like land, is worthwhile and seems like a great deal, but we bid the asset up to cover the lower interest rates. Then when rates go up and one needs to re fi balloons or variable rate you got to pay extra plus bonus interest. Becomes backbreaking with no way out, see ‘1980s.’ Something to watch out for as we bid and spend wildly on ‘free interest.’

When you start out you don’t have anything, so you have to borrow. It becomes a vicious circle, I need to make more so I have to spend more so I have to borrow more. But then I need to make more..... if in mid life you can slow down that cycle and start being your own banker and making your own interest, you double your income. Make money farming and make money on your money, not the bank’s costly money. If there is a hitch in the ecconomy or weather or life you cave a cushion to borrow then, or float some.

If you need to double your operation every 5 years into your 70s some day that blows up for some reason, and either the govt payments come along and bail you out or, see the ‘1980s.’

Best bet is to start farming with a large fortune and hope to retire with a small one. As well farming is cash poor so plan to live on minimum wages budget.

Always remember, it’s the good life, and the American public wants you to feed them for free farming 40 acres and no chemicals or technology, as well as Feed every species of wildlife out there.

Paul
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