Hey if you are broke that is no problem. Everyone should be broke early in their life. Not as a punishment but as an experience. Being broke is an excellent teacher. A painful one, but an excellent one.
I am not talking about being cheap- that’s different.
I am not talking about being poor- that’s an attitude.
I am talking about living on instant mashed potatoes because you have milk and you can make butter.
I am talking about disconnecting the duct on the dryer vent to heat the bathroom.
I am talking about cashing bull calf checks in the grocery store because if you put them in the bank you will never see that money again.
I am talking about coming home to a final notice for your electricity on the front door.
I am talking about always carrying a gas can in the back of your pickup because you have run out of gas before, and you plan to again.
That is what being broke is.
Being broke happens. It happens to good people. I have been broke and I have lived to tell about it.
You can be broke, what you can’t do is stay there
I was reading this article called The Secrets of Authentic Networking by Brian Kurtz and it had this quote in it-
“Rich people have big libraries, poor people have big TVs.”
“That’s because dollar-for-dollar, books are the best way to invest in yourself. For a couple of bucks you can absorb someone’s life work in one sitting”
– Dan Kennedy, Author of the NO BS Series
I absolutely love it!
It’s so true too.
Think about it. If you paid $25 to own a copy of an autobiography, you would learn a few things and move on. The $25 charge for the book won’t kill your bank account and the insights you gain you can keep and apply forever.
I’ve done it.
I have bought both of Greg Judy’s books. Comeback Farms and No Risk Ranching. There is only one lesson I have actually applied from those books but the results have been very powerful. The lesson: you don’t need to own the land, you only need to control it. That one statement and the impact it has had was well worth the $40 or whatever it was to own both books.
It’s the same with speakers and good consultants. If there is a fee at the door the stuff inside is most likely extremely valuable. I paid $30 to listen to a 2 hour talk from South African grazier Ian Mitchell-Innes. Did I learn anything? It was packed with so much stuff I should listen to him again. The $30 didn’t break me. Once inside it was free access to a lifetime of grazing knowledge from one of the most sought after speakers in the world.
Now think of the quote about poor people having big TV’s. It’s true. Go into Walmart, all kinds of TV’s for sale – no books. And what’s on the TV? Ads for stuff to buy aimed mostly at people with no money. Commercials for credit cards, pop (I call it pop, you might call it soda), Rent-A-Center, new furniture for “low monthly payments.” All stuff you don’t really need but if you don’t have any money they seem real appealing.
So after you finance your tv on a credit card, you have just entered the slippery slope of getting new toys without the obligation of full payment—–yet. You can now sign up for monthly satellite payments, $5 more for HD all so you can stream commercials from companies that are only interested in getting more of your money.
Seriously, is Mcdonalds really doing you any favors?
It’s a snowball effect.
People that are poor are not buying $25 books because that seems like a lot for just a book. Poor people do not believe you can do anything with a book, you just read it. People that are poor don’t think twice about how to improve living hand-to-mouth and paycheck to paycheck. They sit around and wait for some magic windfall (the lottery) to come their way. Being poor is an attitude and the sad part is- it seems genetic.
People that have some money, they don’t have to be rich or wealthy- just comfortable, are content. They can take their time. Read a book here and there. Attend a conference or a speaker, all to be ready when the next opportunity comes their way. It’s the art of fleshing out new ideas and applying the ones you can.
The other night I was stalking Agtalk and there was someone saying he needed ideas and plans for a “Cheap, fast, free stall barn.” There is nothing cheap or fast about a new barn. Doing it right takes time and planning. Doing it cheap takes even more planning. The post went on to explain how the mats were shot in his tie stall barn and he was going to solve the problem by building a new barn.
So is this guy buying a book or a TV?
I chipped in and suggested he bite the bullet and put new mats in an old barn. In 30 days you can beg, borrow, and scrounge your way into some better cow mats. That is an investment in the cows not the barn. It will take at least a year or most likely two years to get a new building up.
Spending say $10,000, even if it is borrowed money on new or better mattresses would be like buying the book. Instant payback and you can recover from the cost even if you walk away from the building in a year or two.
Putting up a new “cheap, fast, free stall barn” is like buying the TV. It sure feels nice to be “doing” something. What about all of the extras that suddenly pile on? New barn= more insurance, more taxes, most likely more cows, which is more labor, more feed and on down the line. That turns out to be a very expensive solution to fixing some mattresses.
You can always point out to someone and say “I was doing well until-” when you are broke. When you are broke you can’t think clearly about what the next step should be. That is why cheap, fast barns get put up a few months before an auction.
I know that you truly believe you can get over the hump if you just borrow a few more dollars. You will even feel like it is the right decision when your banker goes along with it. You should be aware that they may not be loaning the money to you, but instead looking at the loan as improving your re-sale value and being able to write off the loss at F.S.A.
Not your losses.
Being broke forces you to operate in a panic.
The content people can think more clearly about what the next step should be.
Guys with 50 cows email me and they want to go to 200 because that will solve all of their problems.
Guys with 200 cows email me and they want to go to 500 because that will solve all of their problems.
Guys with 500 cows email me and they want to go to 1000 because that will solve all of their problems.
Do you see where this is going.
The next step is never the last step.
Before you do something drastic I want you to see this:
We love to debate shit that doesn’t matter. Tractor colors, seed varieties, bedding types, milking frequency, hired labor, everything. Why are some farms able to milk 1000 cows 3x and get all their crops done on time and other farms can’t get 50 milked and fed before the evening chores?
It is easy to blame money, time, labor, equipment but it is always the system that makes it work. It doesn’t matter the size, it’s the attitude and system that makes it go. The farms that get things done on time look like the picture above.
The crops, cows, facility, labor are all congruent with the system. It all works together. The only problem is very few farms actually work like this. The farms that are content have their system figured out and know what kind of farm they are.
Most farms look like this:
Most people, farms included, spend their time focusing on all kinds of things that get nowhere. The breed doesn’t matter if you don’t feed them. Sand doesn’t matter if you can’t get it. Sexed semen won’t help if you can’t get cows bred. Green tractors or red tractors won’t matter without fuel. Pioneer or Mycogen wont matter if you don’t cover the pile on time or correctly. We worry about all kinds of things that are the last part of the priority list and farms end up upside down.
I don’t want that to happen to you. I don’t want you to make a decision now that will impact the rest of your life in a negative way. Building a new barn is that kind of decision. What if you never do recover from the debt? What happens then? $100,000 might be a cheap barn but how would you recover if your auction doesn’t cover the costs? How will you recover if you spend to the hilt now and can’t keep cows going once you move in?
To help you answer these questions I have scoured the readers of Dairyhack in North America to present to you Dairyhack’s Financial Consequences Round Table. Over the next four weeks you are going to hear some of the best answers on how to keep swimming and plan for the future from guys that have spent their lifetime paying bankers, riding the markets, and keeping a wife. I am really excited about this and I think you will be too. I have presented the panel with 30 questions that never get asked when you are starting out. Hearing their answers has been amazing. I can’t wait to share it with you. The panelists are a 400 cow dairy from Iowa, a 60 cow organic no-grain dairy in NY, a 2000 head Holstein steer feedlot and 2 100 cow dairies in the Canadian Quota system.