Sell the farm and live the life of Reilly?

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Jack The Lad

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Here’s a nice juicy one…

 I own and manage a farm. I’m pretty good at it; I’ve won food quality awards and so on. I estimate that the farm in total is worth about €2,500,000, after tax. And that’s conservative. I generate a pre tax income of about €55,000 per annum directly from this farm. Although I love outdoor life and the challenges a farm can present - it’s very heavy work, long hours, seven days a week, the red tape is beyond belief and the potential to expand is too limited for my liking.

I have a fantasy. Selling the farm, handing it all over to a brilliant financial adviser, and living the good life someplace in the sun.

 What do you think folks… could €2,500,000, invested in a conservative way, generate a decent income for the next, say, 60 years?
 
Jack The Lad said:
What do you think folks… could €2,500,000, invested in a conservative way, generate a decent income for the next, say, 60 years?
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Does this imply that you are c. 20 and running a multi million € farm or that you expect to live to a very ripe old age?

Have you considered getting staff in to run the farm with you taking a bit of a managerial/back seat role?
 
2.5million in bank at 3.5% would make ya around 87k gross,your farm is not very profitble considering its value in fact your return on capital is less than the inflation rate!,investing it conservatively you could make over 100k a year easily.
 
Is there 60 years of income left in any farm in Ireland today?

What €2.5 million, I'd be inclined to look at something else (after taking a long holiday to think about it).
 
bearishbull said:
2.5million in bank at 3.5% would make ya around 87k gross
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Don't forget though ... even if you assume that rates stay at 3.5% for decades, neither €2.5M nor €87K will be worth the same amount in decades to come due to the eroding effects of inflation.
 
JTL,
I will assume this is not a wind up. If so, I can quite assure you that €2.5m is sufficient to provide for a comfortable retirement for the rest of your life.

4% real is the rule
see here... http://www.retireearlyhomepage.com/novtips.html

in your case that's €100,000 before tax, of real i.e. indexed, income.

Do you realise what the cost of living is in places like Costa Rica, Guatemala, Panama, Malaysia, Thailand etc. Do you have any idea of the amount of people with a fraction of €2.5m having primary residence in these places, and what their lifestyle entails? Do you think healthcare costs, the single biggest cost of your retirement (all at the end usually), are good value in the developed countries?

I've made not less than 7% nominal return over the last 8yrs, 35% last year , and intend to retire within the next 3yrs on substantially less than what you've got. With my property paid for, I plan to live most of year in paradise on 3-6% per annum from about 1/5 of your net worth.

WTTW
 
CCOVICH said:
Is there 60 years of income left in any farm in Ireland today?
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Absolutely there is. Maybe not in the short to medium term, but long term definitely. We won't be importing cheap food from half way round the world forever.

 
To sum it all up....

€2,500,000.00 means either:

Total freedom

-or-

this
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'one of these things is not like the other'...
 
ClubMan said:
Does this imply that you are c. 20 and running a multi million € farm or that you expect to live to a very ripe old age?

Have you considered getting staff in to run the farm with you taking a bit of a managerial/back seat role?
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I am 35, and damn it I'm going to make it to 95 if it's the last thing I do!

Seriously, though... To answer managerial/back seat question, first problem is difficulty finding someone willing to do the work, then finding someone competent, then being able to afford to pay them! I can take on part time workers on occassion.
 
bearishbull said:
2.5million in bank at 3.5% would make ya around 87k gross,your farm is not very profitble considering its value in fact your return on capital is less than the inflation rate!,investing it conservatively you could make over 100k a year easily.
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Welcome to the crazy situation facing farmers. We all own very valuable property, but the return from it is crap. Problem is, in agriculture you need the massive capital to produce the crap return. I've never considered it in terms of inflation... it's an excellent point.
 
ivuernis said:
Absolutely there is. Maybe not in the short to medium term, but long term definitely. We won't be importing cheap food from half way round the world forever.

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Excellent. Can I borrow your crystal ball?
 

Definitely not a wind up.

I have travelled quite a bit in the third world, and I know what you mean. The first thing, I guess, is to dare to dream. and then to do it. You certainly have given me something to think about. Thanks WTTW.
 
Hey Jack the Lad

I'm curious if there's a missus? If so - what does she think?
If no - sell it, enjoy the funds and the freedom! How about this for a destination for starters?
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Don't mean to be hogging the postings here, but hadn't expected this response and would like to reply to as much as possible.

CCOVICH and IVUERNIS are looking at the future of farming in Ireland. Well, essentially farmers produce food, and people have to eat, and the world population is growing, and a possible outcome of global warming is a reduction in global agriculturaly viable land.... so in theory, I think, some time out there in the future agriculture is going to be a big earner. Problem is saying when that might be. The near future is uninspiring, with World Trade Talks kicking european farmers around the pitch and a willingness by Eurocrats to rely on imports to reduce cost of running europe (BIG MISTAKE guys).... and I don't know if I want to stick it out when I could be less stressed sucking Malibu on the beach (sort of)
 
Ruth said:
Hey Jack the Lad

I'm curious if there's a missus? If so - what does she think?
If no - sell it, enjoy the funds and the freedom! How about this for a destination for starters?
[broken link removed]
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Just married 6 months ago... Mrs Jack is putting me up to it!

As for the picture... Yes Please!
 
CCOVICH said:
Excellent. Can I borrow your crystal ball?
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Of course you can, here...

[broken link removed]

[broken link removed]

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Limits to Growth

Food and shelter are the essential human necessities, everything else is a luxury.

 

I agree, and if I were you (and I wish I was in your shoes), I'd sell up too and enjoy myself for now while the Eurocrats piss away our future. But keep some money aside for when you return to the Emerald Isle or other pastures green (in the literal sense) when holidays in the sun aren't as attractive as they are now. Let's just hope the gulf stream hasn't switched off by then
 
Jack The Lad said:
handing it all over to a brilliant financial adviser
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Therein lies the rub...
unless someone you would absolutely trust with your life and has a demonstrated track record with their own hard cash, theres no such thing...the brilliant financial advisor is YOU

I would also suggest that learning to manage your own money, and I'm talking the psychological aspects (e.g. when to sell) rather than the mechanical aspects (e.g. setting up a laddered bond strategy), starting off with €2,500,00 rather than say €25,000 could be a very expensive lesson indeed...

I'm glad I made my mistakes, realised what it takes to make money investing, when I was playing with buttons... it a whole lot easier to 'make' -20% than +5%, believe me... and -20% loss on €25,000 is a lot easier to recover from through a monthly salary than -20% of €2,500,000!!
 
That is quite a rub!

Well, although I am by no means a master of making money (see annual farm profits!) I do invest fairly carefuly, and have been succesful in doing so up to now. Your point is very valid though, I'm thinking a bit of conservatism would seem to be the key to realising the discussed venture.
 
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