I read with interest the comments concerning the question, What would you do if you suddenly had one million dollars [“$1,000,000?” December 2002, page 14]. After reading the comments, I gave it further thought. After working in the industry for 6½ years and then farming for nearly 40 years, I don't see the need for a lot of new “things.” Rather, as one or more of the farmers suggested, I could use a shop with four walls and a roof. I wouldn't spend any for a new pickup. Rather, I'd overhaul my 1976 Chevy 2-wd half-ton with 225,000+ miles on it (no new pickup is worth $25,000 to $32,000).
Another way to spend or invest the $1 million (if gifted), which was not listed in your article, is to use the $1 million as liquid collateral (leverage) in a financial statement to enhance one's borrowing or investing criteria. Under the premise “cash is king,” leveraging the cash without spending or collateralizing it should be explored.
One huge investing or “multiplying the capital effect” of the $1 million is to create opportunity in green renewable fuels and technologies. The ag community can and should take full advantage of green renewable energy production, which also offers excellent tax shelters if one is so inclined. It is also a patriotic gesture and way of life!
OK, the one million dollars I hope is tax free and I have $900,000 left after tithing. The first thing is to get the money into an interest-bearing account of some kind because this much money will earn a substantial amount of interest.
Seems to me these days the success of a farmer is his or her open-minded management of diversification. Since my farming operation here is small and comfortable, I would first diversify by purchasing some land in Brazil. I have been there and realize that if you have 80 to 90 in. of predictable precipitation in a growing season, there is no reason you cannot turn a profit of $150 to $600 per acre. And — let's get real — a profit is the second reason we farm. A $750,000 investment in the South would be enough if managed properly. Then the rest of the $150,000 would be to expand my tillable acres here in the form of cash-rented land as cash rent is cheaper in this area than owning the land.
As for the neighbors, I would not be overly concerned with what they are thinking, good or bad. I would be eager to share my experiences with them and encourage them because there is opportunity every day.
I would use my million as collateral, borrow against it at say 2% over the interest rate I am receiving on it as a CD. A million dollars times 4% interest is $40,000. My loan interest would be $60,000. I would try to keep the “nest egg” as long as I could as collateral. A million dollars could buy a lot of stuff for only $20,000 a year.
I would spend a bunch of it on gravel. We have had about 22 in. of rain since October and are floating. Of course we were in an exceptional drought until then and the weather person keeps talking about the much-needed rain we are getting. I would put up some new sheds for the cattle. The rock would keep them from sleeping in water (brown mush, if you know what I mean). Also, I would make some new paths to the gates where we feed. I just went in over my boots (tall ones, not galoshes) tonight, on Christmas night, trying to chase a calf that should not have been where he was. Then I had another hour of feeding before I could come in and hose myself off.
Land, before it is all gone, is probably the most important. I am 40 miles northeast of Charlotte, NC, and am getting surrounded by people and trailers.
Myra Neal Morrison
With one million dollars, I would pay my debts, buy land, add more cows to my herd, and give up my night job, so that I can be back to normal like everyone else, and have a machine shop. I would also buy a few new and used pieces of machinery to make life easier. Then I would put away what money is left for a rainy day.
John M. Head
I enjoyed your idea and reading the responses of the farmers. Please do more of this. The ag media should find out more what real farmers are thinking and how they would respond to ideas and programs before they become law. I believe that the economic health of agriculture will improve significantly when we first ask farmers.
My answer to your million-dollar question is that I would really enjoy the opportunity to explore new innovative value-added ideas. Experimenting without the fear of bankruptcy would be a dream. We must realize investing without fear makes us wasteful. It would be fun to try with the first million.
Being a small farmer hit hard by 9/11, my list of purchases would be pretty simple. Move to a piece of land that has water rights ($500,000), buy used greenhouses sufficient to cover ¼ acre ($150,000, including setup and all infrastructure requirements and improvements). Buy a used Ford 8N tractor and essential implements ($10,000) and a few head of livestock ($12,000). The rest is used wisely for seed, plants, marketing and other farm expenses.
These needs may seem out of whack to some, but being one who has had to do with what is at hand most of my life, why would I need a new John Deere tractor for a few acres of market garden? Especially when I can grow over 50% of my forage needs in a greenhouse!
I would first pay down debt. Then I would buy my rented home base of 240 acres. With anything left over, I would purchase more ethanol plant stocks, upgrade my grain-handling system, and update my combine and bean head.
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