Wednesday, August 13, 2008

Finances and Farming

I do not think the dream of becoming a farmer is really that rare. I believe that at some point many people have desired to head to the land and have what the see as the "simple" life on the farm, but not to many people ever get to that point for various reasons. One of those reasons can easily be summed up in one word, MONEY. It takes a lot of money to farm because of the land needed, the livestock needed, the equipment needed, and the time needed (which can pull a person away from another job). So, if it takes so much money to get started in farming and continue in farming how can you do it if you aren't independently wealthy? That is the question we immediately began asking ourselves and researching.

The short answer to the question above is really simple, SAVE. I know that seems over simplified, but the only reason that we are able to have the land, the livestock, the equipment, and the impending house is because we have spent the last seven years of our life concentrated on saving as much as we can. In some years we have been able to save as much as two-thirds of my cash salary and live off of the one-third left over and money we picked up from odd jobs and being frugal (and tax returns from our broken tax system). Compared to our peers our life has been very sparse and it will continue to be that way for quite some time, but we are also reaching our goals.

I have mentioned on here several times that people have money for what they want to have money for. I can't count how many times in my ministry I have had requests for money from people to help with their water bill when the had satellite T.V. In fact just last week on our mission trip we saw homeless men with next to nothing, but at least they always had their cell phone with them! Seven years ago our dream wasn't to farm but we did want to be able to put a large down-payment down when were were able to buy a house. So, we decided that we were going to have money to save and we sacrificed in other areas.

If I could sum up the things that have allowed us to follow our dream to the farm I think I would just say two things. First of all you have to live below your means. If we had lived like we were able to financially or in the way that our peers were living we would not be financially able to do what we are doing. Secondly, it takes two to tango. Farming would not be a financial possibility unless my wife was behind the idea 100%. She has had to make many sacrifices along the way and has been the main bookkeeper keeping everything in line.

Sometimes the process is slow and the sacrifices are large, but I believe the only way to become a viable sustainable farmer and begin a farm from scratch is to save, save, save... And somehow acquire a lot of patience!

Tomorrow I'll write a bit more about the finances of beginning and how we are surviving...


Everett said...

Living below your means is very important in a society where money burns a hole in most peoples' pockets. We are told we need big, flat-panel, wide-screen, ditital TV with surround sound in order to enjoy a movie. We are told we have to spend $10,000 more on a car just to have the right emblem on the hood. We are told our clothes need to be a certain brand... Still, even the most frugal people have a hard time saving up enough to pay off an entire farm. I guess sooner or later you have to make a leap of faith in yourself.

As for the cell phone thing for those homeless guys, try to understand that having a phone number is the only way they can be contacted by potential employers, apartment owners, and other people whom they desperately need to speak with. If they have no address AND no phone number, what are they supposed to put on the application?

Ethan Book said...

Everett - I do understand the cell phone with the homeless ... I was mostly just using it as an example. Although all homeless cell phone use isn't for jobs unfortunately :(

As for paying off the entire farm ... I think it is important to check our definitions of "farm" a "payoff". If you want to do it there is a way. A farm does not have to be 200 acres with tons of livestock. There are plenty of examples of people making their entire living off of an acre or two. Also, "payoff" is a tough word and one that I will probably cover tomorrow or in the next few days. But, in summary we knew that a home mortgage would be part of our life no matter where we lived so we made sacrifices in housing to have 40 acres and a home for the same as if we bought a house like the Jones' in town.

Leaps of faith are always good! Although I'm not sure I would just hold on to faith in myself because I'm pretty pathetic at times :)

Yeoman said...

The financial aspect of this is a very interesting topic indeed. That itself brings up a whole host of interesting items.

As Ethan justly notes, savings are a huge element of being able to get into farming, if you are not born into it. For that matter, saving is a pretty substantial element of just being a farmer.

That places farming at odds with American culture, however. Americans do not save. Indeed, Americans have grown used to one of the most insulting term imaginable being applied to them, that being "consumer". In essence, Americans regard themselves, and American business regard Americans, as a species of livestock which exist to consume. Every time the economy gets a bit slow politicians and economist worry about how to spark one of the worst instincts that exist in man, which is gluttony.

As we are so gluttonous as a society, and as the society encourages it, we save very little. On top of that, the gluttonous nature of our society encourages a "standard of living" based on junk consumption.

That's an important element of this too, and it ties into mindset. Most Americans today have a mindset that requires them to purchase the newest junk as soon as it is available. People not only do not save their money, they do not save their materials either, and do not even attempt to. People buy new cars not because they need a new car, but because it is new. People buy new electronics because they are new, and so on.

This taps into what people conceive a standard of living to be. The last time economist regarded farmers as having a standard of living equivalent to urban dwellers was 1919. In the teens there was a very good farm economy, and it was also the case that the average urban dweller hovered around the bottom of the lower middle class. Now, many more Americans are in the middle middle class, in spite of what people think, and all members of society buy a whole lot more junk than ever before.

What this means, however, is that if a person aspires to be a farmer, and wasn't born into it, they'll have to dispose of that mindset. That's not all that hard for those with a hard desire to farm to do, but for those with a middle of the road desire it's darned near impossible. And for many who have the desire, they may not have a family whose desire is equal to it.

That's my case to a degree. I'd gladly take a huge reduction in standard of living if I could be in agriculture full time. And my family does economize a great deal. My wife is the family bookkeeper, and does a great job. But, as she grew up in agriculture, and in her mind missed out on some of the opportunities for kids that exist for city kids, and likes some of the city conveniences, she's not nearly as willing to dispense with my town income as I am. In conflicts such as that, a person has to be careful. It's not severe in our case, but in some cases, it can be.

Indeed, it can be even in farm families. Farm families often have a very exaggerated concept of the niftiness of city life. I've heard at least one conversation by a ranch kid who entered my city profession in which he was later trying to desperately rationalize his choice to leave the land. It was clear he wasn't convincing himself, but early on the illusion of an "easy" life and "easy" money had clear been appealing. And I've also overheard conversations in which well meaning relatives, or even parents, try to convince kids to go to town under some perverse belief that all city jobs are well paying and fun.

Anyhow, excellent topic. I'll look forward to the discussion.

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