Being a wealthy farmer is much more than having lots of money

Being a wealthy farmer is much more than having lots of money

Having money is nice, but having quality of life – good health and good relationships – is even more important. 

 

At Farm Owners Academy, we help farmers make more money, but we get a bigger kick out of seeing you turn your life around and start enjoying it more. 

 

I would argue that if you have a lot of money but you still live in your head, then you are broke. 

 

Life really is about experiencing things, connecting with others and going out of your way to help other people. 

 

This is true happiness. 

 

Today one of my clients called me and was whinging about a team member who was behind on some of their tasks. He was frustrated and angry. 

 

After venting for 20 minutes and carrying on like the world was over, I told him about a phone call I had just had before our meeting… 

 

A friend of mine from school had called me to tell me his wife had passed away. 

 

She had gone into the hospital at 2pm with stomach pain and died at 7.30pm that night.  

 

She was only 45.  

 

It ended up being a kidney infection that led to a heart attack. 

 

Needless to say, my client realised he was complaining about nothing. 

 

If you look at it, so many people live their life for the future. Always waiting to start living or do the things they always dreamed   

 

This isn’t real wealth. This is delusional. 

 

When the Dalai Lama was asked what surprised him most about humanity, he answered, 

 

“Man. Because he sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present.” 

 
Humans are programmed to survive, so we spend a lot of our lives protecting ourselves against death. There is also a fear of running out of money. 

 

But the reality is no one knows when death will occur.  

 

And it might happen to you or someone very close to you tomorrow for all you know. 

 
From my experience, your ego is programmed to constantly achieve and then feel peace.  

It’s restless. It always wants more and more and can’t stop.   

Once you become aware of your ego, then you begin to laugh at it, tell it to chill out a little, and you can give yourself some permission to slow down and make the most of your life. 

 

Sometimes we need to have an honest look at the way we live our lives and remind ourselves that we don’t need to take it so seriously. That we can slow down and live in the heart (it’s hard when you live life at speed). 

 

It’s difficult to live in your heart if you are always striving for more or always solving problems.  

 

Real wealth is measured by the experiences you have and the friendships and love that you receive and give to the world.   

 

Have a great Friday and weekend. 

 

Robbo

Finance, Farming & Family

Finance, Farming & Family

Unlike most “jobs”, farming is an all-encompassing, often family-run business that necessitates a physically, emotionally and mentally gruelling lifestyle. Living and working with family members every day can be wonderful for some and very challenging for others, particularly as issues regarding income, succession and decision-making have to be well-planned and communicated. Being prepared is vital for a healthy business and a healthy family. Here I discuss just how to best manage these challenges with Tony Catt, Director at Catapult Wealth.

 

Tip 1: Take Control of Your Time

The first big tip Tony gives to farmers to best manage their business is to take control of their everyday tasks in a disciplined and specific manner. Using a daily or weekly planner, diary or to-do list to write down, schedule and check off tasks, meetings or even phone calls every day can really increase your productivity and save time. If diaries or to-do lists aren’t your thing, Tony highly recommends sitting down for 5 minutes each night and planning out the next day so that you can go to bed with a clear head, knowing exactly what is coming and what your priorities are (our Time Management Course really helps with this!). 

 

Also, get the most dreaded task out of the way first thing in the morning while you’re feeling energetic! Doing so will mean that even if the rest of your day doesn’t go to plan, you can at least feel a sense of achievement knowing that you have accomplished an important task. Encourage your family to do the same- I guarantee you will see and feel the positive results!

 

Tip 2: Consider your ‘Why?’

The Australian economy has really changed the landscape for many farming families over the past 18 months. As land values have doubled (in some instances), many farmers question whether they should expand, intensify or invest in their farms, and whether they can and should take on more debt. Tony’s advice here is to really consider the “why” in any of these decisions. What is your purpose in expanding, buying or selling land? What is the strategic intent behind such decisions? 

 

The banking situation in Australia has really changed over the last 5 years, moving from asset to income-based, so it is now more important than ever to have a profitable farm business, as banks will look at the cash flow of your business more than its value. They will consider how old you are and will stress-test repayments at (currently) 5%. Can you afford that? How does it affect your succession plan; are you leaving your kids with a debt for the next 20 years? If so – again – what is the purpose in doing so? These are all important questions to ask yourself, but to also sit down with your family and talk about, as it will greatly impact them in coming years. Our Farm Financial Framework Course can help you answer these questions, as it is aimed at helping farmers know their numbers and make great decisions using them.

 

At the moment, we are happily experiencing real optimism in Australia that we haven’t seen for a long time, with a generally good run of seasons and land values increasing significantly. This affects succession planning because the farming community is generally divided into the ‘Top 20% of Farmers’, and the ‘Average Farmers’. The ‘Top 20% of Farmers’ are well funded, run and managed, have good HR practices, access to staff when they want them and are making good money. Therefore, when the farm next door comes up for sale the bank generally approves borrowing. 

 

The ‘Average Farmers’ have some debt issues, are not as profitable as they should be, aren’t getting the results they want and can’t afford to take over the farm next door or borrow money. They therefore can’t increase in size, but also can’t afford to get any smaller. In this situation many farmers choose to get out and accept a reasonable price to sell. Both outcomes affect succession and can cause trouble within families, particularly when both on and off-farm children are involved.

 

Tip 3: Different Kids need Different Opportunities

Tony considers it vital for both off and on-farm children to carefully articulate their expectations and feelings around the changing value of the family property and how it will affect them in the future. The opportunities afforded to children through the property will be different for everyone, and it is important to consider this; off-farm children should genuinely ask themselves how the property has helped them to grow their own career and place less focus on exact numbers. For on-farm children who often work to pass on the family legacy, consideration of ‘opportunities foregone’ by remaining on the farm are important. 

 

For all involved, focussing solely on the money is a road to nowhere and won’t end well. It is difficult for parents to keep succession completely fair and is therefore up to children to communicate what they want long-term and what opportunities the property is affording them. Unlike most other commercial businesses, less than 10% of younger generation farmers and their families buy into the business, so it is incredibly important to know exactly why you are getting into it and how you can get out of it if you need to. Farming can be a much more all-encompassing lifestyle than many anticipate!

 

Tip 4: Succession Planning = Risk Management

Successful succession planning is therefore more about proactive prevention than anything else. Many people put off succession planning because it feels overwhelming, brings up difficult conversations or reminds us that financial and emotionally-challenging decisions have to be made. Tony believes that succession planning is central to risk management, which is absolutely crucial for farms. 

 

As unpleasant as it is to think about, we usually assume that people will pass away ‘in chronological order’ and therefore have no plans in place for the future of the farm if this doesn’t occur. Similarly, we don’t always consider, as a family, where older generations will live or how they will be cared for when they decide to stop active work. It is essential to consider what the ramifications are for the business as a whole if someone dies. 

 

For example, asking questions such as may be tough, but very necessary:

  • What assets can be moved?
  • What happens to the bank accounts?
  • Where will our cash flow come from?
  • How will the business be handed over?
  • Who controls the money?
  • Who makes decisions about management, debt, land and payments? 

They aren’t always enjoyable questions to work through, but are essential conversations to have as risk management for your business and to ensure you are able to access cash flow if and when a death occurs. Prevention is so much better than a cure when dealing with succession!

 

Tip 5: Succession Planning: An Attitude more than an Activity

As you can see, central to successful succession and financial planning is communication, and this is why the culture of a family and their farm is so important. Family members need to feel comfortable having difficult conversations and asking questions, and anyone who marries into or joins the family has to be fully aware of how challenging working and living on a farm with family can be. Good emotional intelligence is therefore integral to healthy family communication. This includes a genuine regard for others, selflessness, and perhaps most importantly, the acknowledgement that different people have different ‘truths’ (a more apt word than ‘opinions’ in this sense), and that it is within this lens of understanding and accepting others’ truths that difficult decisions can be made. Succession planning is therefore more of an attitude than an activity. If you enter into it with the goal of creating abundance for your whole family, you are more likely to have a great outcome.

 

Tip 6: You Can’t Afford NOT to Plan!

Succession planning can clearly feel all-consuming and overwhelming. By addressing it early with an attitude of creating and supporting abundance for future generations you are better able to risk manage the future and ensure the financial stability of your family and farm. Acknowledging that different family members will have different perspectives on certain issues and addressing planning in bite-sized chunks can lead to much better outcomes for everyone involved. 

 

It is easy to become tangled up in specifics relating to the farm and money, but it is most important to value your family and their relationships above all else. This can be a tricky thing to deal with when you live and work together all year round, however it is definitely possible and worth the effort. Don’t be afraid to seek help in achieving this; an impartial third party that manages, supports and facilitates these processes can make all the difference!

 

If you are interested in learning more about succession planning, listen to Episode 97, and Episode 46, where we delve into the nuts and bolts of planning even deeper.

By Jeremy “Hutch” Hutchings, Managing Director of Farm Owners Academy. You can listen to Hutch share his thoughts further on Finance, Farming and Families on Episode 97 of The Profitable Farmer podcast.

A simple tool to use when you feel busy, a bit stressed and overwhelmed

A simple tool to use when you feel busy, a bit stressed and overwhelmed

I’m sure there are more, but I place stress and overwhelm into three main categories:
 

ONE: Things left undone (too many things to do in a short amount of time);
 

TWO: You are constantly chasing the future and never stop to enjoy the moment (high achievers can easily fall into this category because they are never satisfied with what they have);
 

THREE: There is something negative going on in your life that you are yet to accept (i.e. you are rejecting your current reality for what it is).
 

Today, I will share a tool with you for #1 in this list – ‘things left undone’ (too many things to do in a short amount of time).
 

For many of you, Christmas is your busiest time of year.
 

Just the expectation of going into a busy period can create a lot of stress.
 

One year, coming into Christmas, a client I was coaching came into my office – he was feeling very stressed and overwhelmed.
 

He was at a breaking point.
 

He felt utterly overloaded, and this was significantly impacting his relationship and close to causing a divorce.
 

We used our coaching session to work through this simple but effective tool:
 

  • Step 1: I asked him to write down everything that he had going on in his life
  • Step 2: I asked him to estimate the time needed to complete the tasks he had written down and write this next to each one
  • Step 3: I asked him to place a letter next to each item to show the priority
    • A: Needed to be done this week  
    • B: Needed to be done in the next 2 weeks 
    • C: Could be done next month
    • D: Could be done next quarter 
    • E: Could be done next year 
  • Step 4: We also went through every task together, and I asked him, “could you delegate this task to someone else to do?”
  • Step 5: We then pulled out his calendar and scheduled all of the tasks.
     

By the end of the exercise, my client realised he had actually only had 20 hours of work to do in the current week, and only another 10 hours to do the week after. In other words, there was WAY less going on than he initially thought.
 

He had a HUGE sigh of relief and even laughed at how much he was overreacting to how much he had to do.
 

Here is what he learned:
 

The problem wasn’t the number of things he had to do (in reality). The problem was he was carrying it all in his head without any structure, and the EXPECTATION of what he needed to do was causing him angst.
 

The best thing to do when you are busy is to slow down.
 

It sounds so contradictory, right?
 

You think you need to do more and more, but it’s all about slowing down, writing it all out, and working out a plan to execute it. And if too many tasks fall on you, then you are just not leveraged enough (i.e. it’s most likely time to hire someone).
 

SLOW DOWN TO SPEED UP.
 

Whilst this might not eliminate your stress and overwhelm, it will reduce it dramatically.
 

And you might even find that you can really enjoy the busiest time of your year.
 

Robbo
 

P.S. This is just one of the many tools we teach in our 14-day Time Management Course. It has been designed for the busy farmer and those who are feeling overwhelmed and stressed (and dare I say a little short), and you get lifetime access! It’s all about helping you slow down to speed you back up. It is just $9 for a short period (usually $197). Find out more by clicking here.   

Some are having their best year, while others are devastated by flooding

Some are having their best year, while others are devastated by flooding

This week I wanted to share a message that our CEO Sam Johnsson sent out to our Platinum Mastermind members in a monthly newsletter.

With some having their best year ever and others wiped out from floods, I think it’s a great reminder of how fragile farming is.

“It is at times like this that I am reminded just how varied the conditions are that we face in Australia.

In talking with many of you across our community, some are lining up for their best production years ever, whilst others are dealing with a myriad of challenges.

For those of you in the thick of rising flood waters, lost production and uncertainty at the moment, we want you to know that we are here for you.

As we have been doing for the past seven years, the Farm Owners Academy community and team are here to help in whatever way we can, so please reach out if you need anything or if you can lend a hand to someone in need if you can see that it will benefit them, reach out to them.

Reflecting on the conditions this year, it is hard to feel good about the words of the great Trevor Hendy.

“The conditions are always perfect…”

It’s hard to contemplate perfect conditions when half (or all) of your farm is underwater, and it’s unclear what is next.

The reality is that there is power in Trevor’s words.

That power sits with you!

What it really means is that regardless of the conditions we face in business, all we can do is our best in the circumstances that are in front of us.

No person can change what they have no control over.

Those that take a negative approach and allow their environment to distract them will inevitably disadvantage themselves both consciously and unconsciously.

Whatever your situation is this year, please remember – it will not last. So I encourage you to (as much as possible for you at the time) stay above the line (i.e. take responsibility, don’t get caught in playing the victim), focus on what you can control and do your best given your circumstances.

If that means making the most of an incredible season, then make sure you take all the steps in your control to absolutely nail it.

If that means going into damage control, protecting your assets as best as possible and helping those around you to do the same, then that is winning for you this year.
One thing that has amazed me about our members who were impacted by the bushfires in 2020 is just how quickly it can turn around.

Those who remained above the line were able to return to (or significantly exceed) their previous business performance in less than 18 months.”

Sam Johnsson,
CEO, Farm Owners Academy 

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