with Don Fraser
Fraser Farm Finance
I know I have rabbited on about this topic before, but there are so many factors involved. And I know I am repeating myself but I can now speak from personal experience.
More than that, I work with and am surrounded by people who have successfully, and not so successfully, negotiated their way through this incredibly difficult process.
And let’s face it, it is a process. It just does not happen without a huge amount of effort, soul searching and planning.
When many farmers, who have spent a lifetime on the land, are unable to face, until forced, the changes necessary, they hang on for grim death (excuse the pun) for fear of change, the unknown, let alone the old “what will the neighbours think?”
They see others go to town, get sick and die and fear death themselves. We all do - but those who went to town where probably going to die soon anyway.
Many farmers’ wives live in the hope that change will come because they are hanging out for the opportunity and time for more fun, more people, and to get away from the stresses and ties that farming may bring - but the old boy just keeps on hanging on.
It is inevitable that we are going to die. This is another real fear we are faced with and accept it we must. We need to calculate how many healthy, effective years we have left and start working backwards.
I am 71. I expect to have 15 to 20 years left – say 15. What am I going to do with these valuable 15 years as they flash by? “Life is like a roll of toilet paper, the more you use, the faster it goes.”
Questions to ask include are we going to stay on the farm, sell up and invest the money, travel, live, laugh and love, find something else to do or plan those 15 attractive years, each containing no more than 365 days?
How do we do it and where do we invest our hard-earned capital? Note right here that capital is the nest egg and we should try to only spend the income derived from it.
Remember, a couple of new cars, a boat, trips and a bit for the kids can burn through $200,000 to $300,000 as quick as a wink.
This can be a big one. Everybody suffers from some degree of anxiety, some more than others. Can you replace the noise in your head from farming with other interests like golf, bowls, community work, grandkids and look after your nest egg?
Leaving the farm and who you know around you is bigger than a marriage break up on the stress level. It is massive and should be treated and managed, tears and all.
Are you both on the same page, with a common plan, or is one waiting for the other to die so they can get a life and start doing what they want to do by selling up?
You need to call a meeting with your spouse and have a deep and meaningful discussion, record the agreements then agree to take action. This still is not easy and may require a third party as a chair. Then include your professionals in the loop so they can brief you on legal and tax issues.
If you have agreements for change then you need to plan the process. What will happen and when? Who will do what and how are you going to make it happen in an effective manner? Who will be part of your team in the way of realtors, bankers, accountants and so on?
There is nothing like calling a meeting of stakeholders, once you have a plan, to get them focussed on your business. Again, an independent chair can be a huge help here.
“You need to start the process with the end in mind.” The process of changing properties, selling, buildings etc is certainly not for the faint hearted. Ensure you have good support from friends and family and it may even pay to tell your family doctor.
Finally, there is life after farming.
It will be what you make it, it will be difficult and challenging and it will increase your anxiety and make you nervous.
It will involve big changes, but once you have made the decisions and start moving forward, the uncertainty falls away and you are on a journey.
And when you get there, lean back a little and celebrate your efforts and pat yourself on the back, because there is life after farming.
Disclaimer – These are the opinions of Don Fraser of Fraser Farm Finance. Any decisions made should not be based on this article alone and appropriate professional assistance should be sought.
Don Fraser is the Principal of Fraser Farm Finance and a consultant to the Farming Industry. Contact him on: 0800 777 675 or: 021 777 675. A disclosure document is available on request.