Congratulations.
You are in the process of selling, or have recently sold the farm. My experience suggests that, whilst emotions are mixed, you are looking forward to relaxing now the farm is sold, and cheering that you’ll never have to stress over a BOM forecast again.
Yep, not worrying about the weather is a win, but now you get the opportunity to solve a whole different set of problems. You see, once the farm is sold, your income is gone and you must now rely on whatever income you can earn off the proceeds of the farm sale.
Right now the money is probably just sitting in cash in the bank- or about to be - and you may be kicking back thinking “I’m getting the bank interest for now so I’ll just sit on the cash and deal with investing later”.
Money in the bank is a bloody good start, but at some point you are going to have to start investing.
Why? Well, very low interest rates means the interest you earn will be nominal. Take into account tax and inflation, and in most instances you are probably actually going backwards.
Now, I am not advocating rushing into anything. Constructing a robust and secure investment plan should be well researched, with due care and consideration taken. However it shouldn’t be delegated to ‘Volume 3’ of your ‘Gunna Book’.
A reason many people subconsciously avoid dealing with this issue is fear. You’ve come off a farm having never invested before, and are unsure where to start. For most people investing their life savings can be one of the most daunting projects ever undertaken - especially when they’ve spent all their life earning a living off the farm, without any exposure to investing.
The proceeds of the farm sale are now your goose that will lay golden eggs for the rest of your life.
And like all valuable assets, you need to ensure your goose is well looked after. Kept warm, well-fed, watered, and most importantly, kept away from foxes. The last thing you want is for your “goose to be cooked”.
Taking care of your financial ‘goose’ is critical. Unlike when you were thirty or forty, your time and ability to rebuild wealth is diminished if you make a poor choice or things don’t go the way you expect.
Now that I have your attention, here are some timely reminders after selling the farm:
- 1You need to be able to keep paying your bills, and to do that you need an income stream;
- 2To generate an income stream that won’t run out before you do you need to invest, which means shares, property, cash or a mix of all three;
- 3You need to invest your nest egg wisely and balance out the risks you are willing to take with the reward (return) you expect. Not all investment risk is easy to see and for the inexperienced, investing can be a minefield without proper guidance and advice.
Who are you going to get to help you?
You didn’t learn to be a great farmer/grazier overnight and there were mistakes along the way. Now that you are retired, you cannot afford to make mistakes with your life savings and cook that goose.
And, by the way, when investing, nothing good ever came from “my mate said I should invest in/buy…”
An experienced adviser can help you make good choices, and is, more often than not, the difference between success and failure.
I’m the Financial Bloke and I’m all about turning your Farming Success into Financial Freedom.
Cheers,
