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Beresford, SD | If you can pay things off while maintaining your working capitol position and not breaking the bank with tax liability.....pay it down or off if operating with out a LOC.
Prepaying expenses and deferring income can help mitigate tax liability!
Wouldn’t advise getting to the point of deferring half a years income, but pre pay......cash and carry away. Getting out of taxes with green (or red) paint, buildings, bins, is a death trap if they have debt against them at purchase, or even if the purchase liquidates too much working capital!
As a cattle feeder it’s very easy to pre-plan your tax bracket. Buying feed!
I’m 46 years old, in the trenches, Swinging my own hammer, have never been given a dime from anyone! I’ll have operating debt as long as I keep buying land and the lots are full of cattle. Dad, his lots have been torn out for almost 10 years now, all new shiny green paint, all his land in his name.........he keeps telling me it’ll happen, keep plugging away. My son will be 6th generation.......I hope the struggle is easier for him!
Given the extremely cheap fixed 5-20 rates (refinanced for cheaper rates this summer with FCSA) most a 1/2 point less than or equal to variable operating today ....I’ll make all payments due but pay no more! Higher rates are ahead for short term (operating). Term out and fix everything you can and lock the rate down! Maintaining or increasing your working capital position year to year is a must, especially when we are due for higher short term rates!!! Working Capital!!!!!!!!!!!!!!!
Edited by carlsoncl 12/3/2020 01:26
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To get clear out of debt or not.
