Debt

[Clive]

10% eh? Would be interested to see what rates of return you think there is in the various farming enterprises. Not a challenge, I feel there’s quite a gap within farming.

I would expect (and can get) more like 20% return on money borrowed for buildings, plus capital value increases on property

Land capital values have also done well over the last few decades, it’s certainly paid to borrow to buy land in both my fathers and my own life time

........ and there is also a bit of income from the farming bit

 

[livestock 1]

And there is nothing wrong with borrowing money

If you can borrow at sub 3 or 4% and make 10% plus out of doing so while inflation sits at 2-3% then the only fools are those that don’t borrow !

What’s the real inflation rate? Inflation is now calculated on average joe with a car 2.4 kids wife and a semi detached house. This disguises the real inflation figure for the government. Average joe doesn’t buy tractors thousands of gallons of diesel tonnes of fertiliser and such as. Why else would the government change their calculation formula? Nearer double I would guess

 

[livestock 1]

I would expect (and can get) more like 20% return on money borrowed for buildings, plus capital value increases on property

Land capital values have also done well over the last few decades, it’s certainly paid to borrow to buy land in both my fathers and my own life time

........ and there is also a bit of income from the farming bit

Some we bought has tripled in 20 years

 

[Clive]

What’s the real inflation rate? Inflation is now calculated on average joe with a car 2.4 kids wife and a semi detached house. This disguises the real inflation figure for the government. Average joe doesn’t buy tractors thousands of gallons of diesel tonnes of fertiliser and such as. Why else would the government change their calculation formula? Nearer double I would guess

I agree - inflation has been clearing debt rather nicely for many ........... including our government!

 

[B R C]

Tripling is good but either inflation or interest payments means it needs to double in 20 yrs to be worth buying. Interest rates for the first 10yrs were not as low as the last 10yrs.

 

[livestock 1]

I agree - inflation has been clearing debt rather nicely for many ........... including our government!

Just as the value of debt has been eroded by inflation so has money invested in low interest accounts.

 

[B R C]

Just for comparison Uk stocks yielding about 4.5% in dividends atm.

 

[livestock 1]

Just for comparison Uk stocks yielding about 4.5% in dividends atm.

Nothing left then after devaluation?

 

[Clive]

Just as the value of debt has been eroded by inflation so has money invested in low interest accounts.

So debt has paid and saving hasn’t

Yet people who borrow are fools apparently?? !!!

 

[livestock 1]

So debt has paid and saving hasn’t

Yet people who borrow are fools apparently?? !!!

I’ve been criticised for having debt for years now. Unfortunately some people who had inherited land bought nothing have now got debt when there’s not a clear reason for having it.

 

[livestock 1]

So debt has paid and saving hasn’t

Yet people who borrow are fools apparently?? !!!

Sorry yes absolutely it’s paid

 

[cattleman123]

I’ve been criticised for having debt for years now. Unfortunately some people who had inherited land bought nothing have now got debt when there’s not a clear reason for having it.

Nothing at all wrong with debt if its structured as most are...its the ones and there are many that are always on the phone to the Bank Manager for an overdraft entension...the more they get the more they seem to want...and still cant pay as its always spent on something else

 

[livestock 1]

Nothing at all wrong with debt if its structured as most are...its the ones and there are many that are always on the phone to the Bank Manager for an overdraft entension...the more they get the more they seem to want...and still cant pay as its always spent on something else

Mine is mainly on land and houses.

 

[Still Farming]

Nice not to have any though?

 

[livestock 1]

Nice not to have any though?

I wouldn’t know

 

[Headless chicken]

I’ve been criticised for having debt for years now. Unfortunately some people who had inherited land bought nothing have now got debt when there’s not a clear reason for having it.

I couldn’t agree more here. I often say I don’t mind having no money left if I can see exactly where it’s gone. If you get to the end of the month/ year with no money and you can’t see any value to where it is then you are properly up sh!t creek

 

[B R C]

I agree, as long as ‘value’ is not just a measure of things tangible.

 

[Derrick Hughes]

I was at a dinner with a load of ag bank managers not long ago and I was amazed how little debt there is in agriculture

Vast majority of Uk farmers have no borrowings at all and average overdraft was under 50k ......... less than most none farmers will owe on their house mortgage

Not sure it’s as bad out there as we often assume ?

They dont have any dairy farmers on their books then

 

[Kiwi Pete]

They dont have any dairy farmers on their books then

"Proper Farming"

 

[Derrick Hughes]

"Proper Farming"

Shows void between Arable and Livestock