You probably spend a lot of time working on your annual farm budget and you understand where luck fits in. You probably wouldn’t take the risks involved in farming without a budget, a plan of how it will hopefully turn out at the end of the year. But if that is your only plan to build wealth then you could be flying blind when it comes to the rest of your life and this is where Munro’s can help.
It goes without saying that you will invest in your farm. But what proportion of your time and resources are you able to devote to other investment areas such as non-farming property, shares, deposits etc.?
Farm versus personal
Farm and personal fortunes become intertwined over the years and when the farm takes care of your needs, it’s easy enough to think everything is sweet. But if you moved off the farm tomorrow, what could you take with you? How much cash would you need? If you needed to borrow, what security could you offer? What income could you use to live on?
We like superannuation as a life planning tool and you’d like the tax and cash flow advantages flowing from super to build your wealth a bit faster. But what assets, timing and how much you feed into superannuation needs some thought.