Dave Ramsey don't farm Pt. 1. 😉
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- Опубліковано 21 сер 2024
- Dave Ramsey is a well known and successful personal finance guru but is his advice ideal for the farm too?
In this part 1 of a who knows how long series explores the difference in personal finance vs. business finance and service businesses vs. production businesses.
Correction where I say 15K, it should be 12.5K.
Part 2 will dig more into the questions of using long term debt, LOC's and financing for your farm business. Coming soon.
I (Jordan) and my wife, Laura, own and operate J & L Green Farm in Virginia. It has been our full time occupation for the last 10 years building this first generation, pasture based, direct to retail farm. We are in the small percentage of farmers that actually make their income from farming. As such we address our farm as a business and make decisions with that in mind. What you see here is what it takes. No BS or disney’ifying.
Have a question or idea for a future video? Leave a comment or drop a DM!
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Jordan, today Is the first time I’ve watched your videos. I’ve been impressed, and I agree with your politics.
Ive always wanted to be a full time farmer. Three years ago My wife’s family was Going to sell there farm in South Dakota (1200 acres) I tried a million ways to find some way to make any project pencil out. The only thing that had a prayer of supporting a family and repaying all that debt was basically what you do. Problem was there was no butchers around to do any processing.
we felt the call of God, moved to South Dakota, went into a pile of debt, and built a butcher shop.
I haven’t had time to do much farming the past two years with construction and meat processing but as our employees are taking more responsibility. I finally have time to get some hogs and cattle.
Thank you for taking the time to share your knowledge and systems. Our winters are too brutal for much of it to work here. (My water line froze 7 feet deep last winter) however I’m very impressed with your sow production, you have some amazing mother pigs.
By grace I am saved,through my faith. Not by works lest any man should boast . It is the gift of God. God bless you and your family.
This really rings true with what I've been thinking for a while. Awesome content!
I think both positions are valid. Dave’s position is risk averse. He went bankrupt and lost it all. If you are risking money you don’t have, their is a chance you could lose “the farm”. But if you understand the business model and are a seasoned farmer, than you are really reducing much of that risk. The safe road will generally offer a lower rate of return, but also a lower chance of losing it all in a catastrophe. I would discourage anyone from going deeply into debt to start farming. Find a way to start out smaller and only wisely use debt once you can minimize risk thru experience.
Agree.
Life its Time and Patience. Always start small and grow from there.
Dave lost his money using HIGHLY risky loans, its not even close to how farmers use debt
Good points. Always like how you make things literally down to earth. 😁
This is the only real farm channel😂😂🤣🤣
Love the videos, definitely does a good job explaining things.
You talked about losing the capital investment of the retained earnings.
Engaging in credit is dangerous. Like you said, there can be expanded time frames where there is no income coming in due to the current production cycle. That means everything that you have been charging to credit will roll on the next month and be charged interest. Thus the (25% capital loss from you example) would be eroded by the continual interest charges.
When times are right and everything is working smoothly, even a blind squirrel can find a nut. When times get nasty, and Murphy visits for the third time this quarter, the credit basis goes to crap and you end up selling machinery/ground/livestock to try to cover losses.
Dave’s personal finance model is still the best for good and bad times, scaling retained earnings for emergency’s is the exact reason you have them.
Lastly if you are accruing 30,000 of monthly operating costs, your gross for the year should be well exceeding 400k, thus keeping 100k fluid isn’t that big of a deal.
I’ve seen a few good farmers lose half their ground due to a bad year and the following years bad prices.
Work slow, add ground as you can, and don’t finance machinery. It isn’t just for the “big farmers” working from a cash basis. It sure is easy to save for more ground when you aren’t paying off the current equipment and ground.
^this. This guy thinks 25% of 50000 is 15000. 😅
@@rerailmark
He was doing mental math. Lol, not everyone is super good at it, I mean it’s 12,500 so it wasn’t like he was way far off at 15000.
The real problem with the message is that it’s “hard” to keep that money in a float account, or it that is somehow costing you business owner some sort of profit.
What he fails to account for is the risk. When times get tough, and instead of having the cash to float the farm through the mess, you either stack money on more credit, thus increasing stress and over leveraging the person, or you are forced to sell livestock or ground to cover the losses. At which point, there is no profit from those assets the following season. So what did that really cost the operation if you are working on genetics in stock or soil quality on the dirt side.
Not everyone has family farms/ground/livestock to start their operations with, that’s fine, I didn’t. But just because something is “harder” to do doesn’t make it wrong. Actually it’s usually the harder way that is the better way.
Finances are really complicated. The more money you have, the more savings you should have. If you're just starting out, it's easier to take risks since, as long as you get an accountant and protect yourself to make bankruptcy possible, it can be a good idea.
But as you said, the key is to be realistic and know yourself. If you don't know how to keep a budget for yourself, you're really asking for trouble when other people are going to start depending on you for their paycheck/meals. That's a lot of responsibility and should never be taken lightly.
Nice video. Know why you're following a rule/person before you decide that's the only way to do things!
Probably one of the most eloquently ways I’ve ever heard Regarding this topic
My thoughts you ask! Always brilliant, all videos are the best! Farmbuilder & Greg Judy are no BS no frills exactly what’s required! Would like a vid or part there of where you been for the last 5 months?
thanks! I haven't heard a better breakdown of production vs. service.
Couldn't agree more with you about the 1st half of the video (I couldn't watch the whole thing and had to run!) I have chicken houses and can have a $5k swing from flock to flock every 10 weeks. Additionally overhead is much more in the Winter. Time between flocks vary. Great video!
Well said..same as me. Point are point
Great video!
Video ideas.... government subsidies for farmers.
Nice video. Well explained. I am trying to get out of debt but want to farm, and this is the exact dilemma I have been trying to work out.
Keep up the great videos. I appreciate your views and it's nice to hear a farmer speak his mind about many topics. You have wisdom beyond your years, bro bro.
Take on Joel Salatin's concept of financial fluidity in a Comercial operation. I understand you learned a ton from him. And now, establishing yourself, perspective first hand from both would be a treasure chest of knowledge to us.
Very interesting points. I think this helps a lot to explain some of the reasons our farm operation has been growing, but slowly. Thank you!
My grandparents built s dairy farm from scratch and never borrowed a dime. He worked off the farm for many years while farming to make it happen. That was a long time ago, but it can still be done today if you start small and grow slow.
If I waited until I could pay cash for growth, I’d have paid double for every acre, land goes up that fast in the corn belt. Leverage is a tool, it can be used wisely. I went from 300 acres to 3000 of organic crop land in 20 years. We’re 5 years away from buying out another farm that we custom farm right now. We do 10 year notes and have always paid them off, or way down in 5 years, then go land shopping again.
Sometimes when the cash is sitting in the bank, it’s still better to borrow, so you can act with zero delay when opportunity knocks. Maybe a nice field that borders land you already farm becomes available, or you get a chance to buy out a guys equipment.
On that note, I like Dave a lot. We live on a shoestring, yet are very comfortable and secure. As far as personal finance, we have the high limit, hard to get cards that pay cash back and we buy everything with them, personal and farm related, we have financed a vehicle we had the cash to buy and paid it off in a year. Financed part of our house and paid it off in 5. That 800 credit score opens a lot of doors for you, and when they are giving the money away, why not use someone else’s money?
I don't know how I found this video. But i really like this.
I understand where you are coming from. Sometimes it takes money to make money in business. I agree with Dave on personal finances and will say, if you don't have your personal finances in order you have no business starting a credit based business.
I enjoy listening to Dave Ramsay on the radio, but I hear you. His advise doesn’t work for every situation.
The last thing you said was the most important part. Dave Ramsey’s philosophy on money is great for the average American that has no idea on how to manage money. Once you get pretty good at that and have saved money then you can go buy land and cattle. Which is what I want to do in the future here in Texas. I’m still on the baby steps and I know Dave’s philosophy on finances will help me in any area of business. That doesn’t mean you don’t take chances or deviate a little from his philosophy and improvise. But at least you will have a good foundation on which you can build. Hope your business is doing great, God bless.
Basically learn this..... assets make you money and liabilities cost you money. Rich Dad Poor Dad
I like the idea of separating the two philosophies for personal and business. But I'm wondering where someone can go for sound advice on like growing a farm. I'd like to expand the 85 acres my family has someday and have had not great luck on finding detailed advice on things we can change to become more profitable and how to navigate the financing systems built for farm growth.
Standby, we are developing a school for this in 2024.
Very interesting topic! I've never considered the differences between retail finance and commercial enterprise or service based vs production based finance. What you say makes sense.
You are exactly right about business finance.
I'm going to wait for Mike Bloomberg to show me how to farm because he can teach it in a day. Just dig a hole . Put the corn in and cover. Sprinkle with water and boom easy street. 😜
“Farming looks might easy when your plow is a pencil and you’re a thousand miles from the cornfield.” ~ Dwight Eisenhower
I agree with most of the video. However, the purpose of the 50K to be there on hand in case something bad happens (Tractor or equipment breaks). It’s turns an emergency into an inconvenience. Knowing how tight the margins are on farmers, the 50k or 100k in a 6 month to 1 year emergency fund (for a business) could totally change the life and business of a farmer. Most farmers who don’t have crop insurance will either depend on the government to subsidize them or a lender to lend them money to cover the cost of the lost crop. Having that money there for when (Yes when because what can go wrong will go wrong) something bad happens will give the farmer a buffer between them and life. I love our farmers and I want them all to farm DEBT FREE!
Another great video Jordan. Keep’em coming.
As a business owner I understand your point the biggest thing is to tell your money where it belongs I wish I would have listen to Dave Ramsey 15 years ago but don’t we all say that
Love watching your videos. You make some really good points. Every business is different. Although its good to have some reserve, but it takes money to make money. I think some of these so called Guru's of finance got rich by telling others what to do. As for future videos maybe time management. I would be interested to see how you save time on different task. Years ago I did Photography for a got that made millions on doing Videos on Time management. He was amazing to work for and to get his advice.
Nothing wrong with Greg Jud he makes some great points, crop farmers kill soil and the environment with eve6they put on the soil, as a beekeeper this is very much the case and believe it to be true so what's the problem with Greg Judy pointing that out.He like Dave are just trying to help and inspire.
Great video and very well said. I’ve always said it’s easy to live like Dave wants you to when you have the income he has...
Very wise advice. Thanks always enjoy your videos.
Jordan, I love what you are doing, however I'm not too fond of this video's message. I think you can agree that most businesses fail because of an inability to make a profit. Using any kind of debt to make a business successful involves a lot of risk. If you can't bring in enough income, the debt piles up. I think you can also agree that it isn't a bad idea to grow slower rather than faster with a farm business. I follow Dave's principles in my personal and business finances and have enjoyed growing slow and not having the added risk. It took a good 18 months to get my business to a point where it financially sustained itself 100% and turned a profit, but at any point I could have got out of the business without owing anyone a penny. I believe that piece of mind helped reach a level of success. Just an opposing view, much respect to you.
👍👍
Also, could you do a video on your winter set-up for your sow sets and cattle?
Words very well said. Peace Be With You ☮️
Let's talk Holistic Management and Alan Savory.
Actually this type of farming hog is far better than the typical hog raising in our country.
All very good points.
People who have the kind of cash Dave is talking about don't really need to be farming so what is his point? All business requires risk and wise use of financing is part of the equation.
I’ve heard some of Dave’s comments about farming too. He 100% believes you can farm debt free starting from scratch. Maybe he thinks these people live to be 500 years old or he’s never heard of ranching and dry land farming out west. You need so much land out here to be productive, it’s almost unheard of to get started without your family already in it or a million dollars to blow.
Yep..
As per new testament eating pork is not a sin.
Debt is always the devil!
Why?
Greg Judy lets the livestock buy things he don’t need credit cows are KING forget the bank
Obviously when growing your business, which we are as well, I’m 25 and husband is 33, yes I agree with investing that money back into the farm regularly. Do you think there is a point (years into it) that it is more realistic to approach a cash only farm?
Certainly would be easier if that's what you want to do. However, if you can regularly net 20-30% off of farm operations and debt costs 2-3% why would you? Keep a reasonable reserve but keep the rest of the cash working.
I think that the Infinite Banking Concept is much better suited to farming than the Dave Ramsey approach. Well, maybe it's just better all around.
I'm very afraid of debt. I would not want to end up in deep credit card debt in middle age and older because the ability to make money goes down. But for my husband's profession the decision to purchase parts on a credit card was imperative because otherwise he'd have to ask people he works for to pay for their parts upfront, which isn't very professional. The 5% back is a really nice benefit to putting that on plastic. I still dread the idea of owing big debts and fortunately have never had any medical debt. Poverty is demoralizing.
One should be very afraid of debt. Anyone who doesn't respect usury and what it can do to you is not sophisticated enough to play in the financial world. There's a reason the Bible speaks so negatively of usurers, and there's a reason that the "education" system doesn't teach finance. It's easier to steal from people if they don't understand what's going on.
That being said, it is a game. The game has rules, and therefore like anything you have to study and understand them before you start playing, or you will find yourself in a terrible situation.
Never let yourself get complacent to the danger, but at the same time have enough faith in yourself to take things slowly, and protect yourself to the best degree that you can, then go out and create something beautiful!
Knowing what you know now, what would be the first few steps and what investments would you initially make starting somewhere with no connections from scratch?
Start with knowledge and start with marketing. Build those relationships you'll need to succeed.
You should do a video on your opinion of the creation of artificial meat made in a lab and the impossible burger
Take on Greg Judy strategy next please
I can't farm without borrowing a line of credit maybe 10 years from now but not today so im not going to sell out because Dave said no I know my business he don't DAVE RAMSY
DO WHAT I SAY NOT WHAT I DO
A guy could say that by putting your expenses on a card and paying it in full every month you are living a cash only life.
I’m no expert on Dave Ramsey but I thought he was focused on personal finance. Commercial farms are businesses. His principles don’t necessarily apply here.
I like your philosophy, and real life examples you give. I forget the financial person but he was talking against the philosophy of save save save, into traditional accounts and methods. his philosophy was sure, have some set back for a buffer for the unexpected, but the rest of your money should be used to invest in other business. Let your money work for you in business opportunities rather than count on the old teachings of brick and mortar financial institutions. I kind of agree with that. why have 50k in an account paying 100 bucks in interest when you could invest that into a business... and even if that business only netted you 10k, what a difference in returns!
Can you show a close up of the water system behind you ?
The tank? There's a video on the channel how to build one.
@@FarmBuilder thank you sir. Please keep the videos coming.
Mom said yesterday, "Dave Ramsey says pay off the house" I said invest your 400k in real estate, and use your 100k income to pay for your freakin house! Dave is smart, but come on mom!!! She'll come around.
Love Dave. Disagree with a lot that he says. However he is a millionaire and I am not sooo...
Unfiltered video 🤣😂
I always find it amusing when you can listen to someone make very logical and easy to prove points but there will be those who still argue against it or dislike said logical conclusion based on personal bias...hence the 6 down votes from Ramsey acolytes at the time of leaving this comment.....No offense to anyone's beliefs but the evangelical community isn't really know for their free thought and the encouragement of free thought. Glad to see your back into video making. :)
Pig Man!🐖🐖🐖❤️❤️❤️
I believe Ramsey is considering farming as the conventional model, capital intensive, soil-depleting, huge infrastructure. Not really what you’re doing.
Common sense! 🤔
For the record, 25% of $50K is $12,500. Not that this mind math invalidates anything else you said.
I was homeschooled...
@@FarmBuilder I was public schooled by one of the worst school systems in my state and i didn't catch that math mishap til this comment 🤣 My homeschool kids quickly get ahead of what I can do in math. Good thing they have access to youtube math lessons. Things we didn't have access to as kids
Love the political incorrectness
I hope your business either rots or you switch to a vegan farm.
Dave Ramsey is a cult leader, change my mind.
Dave Ramsey is a goober. Listen to him and you won't make it in business. It's always better to use some one else's money when making wealth. The MORE DEBT you have the more likely people won't let you fail...long as you know what your doing they will give you more.
Bill Joel slave to the lender is more then a state of mind it’s physical and the mental feeling of owning things is reAl not a bank owning it .insurance is great business being self insured is the best
just me for the amount of money his dad left him if he would of invested simpler and wiser he would of been wealthier
Bill Joel the old farmer with the overalls reaching in his pocket to grab that roll of cash say it’s better in his pocket then paying a banker man on his hard earned money the interest is like a hole in the ground just toss it in
Bill Joel now a little tiny virus shuts down a nation banks still want there money that’s a horrible way to loose a farm in less you own it with a emergency fund as per Dave Ramsey