A widow we’ll call Susan, 64, has a 1,120 acre farming operation in central Manitoba. She owns 800 acres personally and has another 320 acres in her farming corporation. When her husband — we’ll call him Burt, passed away, the estate was probated and quickly transferred to Susan. Now she wonders what will become of […] Read more
Farm Financial Planner: Widow wants to wind down farm
With no children wanting to farm, this widow wants to sell up and minimize taxes
Higher interest, rising bond prices
U.S. interest rates are heading up, and bond prices are rising. Here's why security pays
The ominous Chinese greeting, “may you live in interesting times,” has arrived in Canada. We face declining energy prices that are dragging down the entire economy to nearly zero growth. Canadian stocks are accordingly dismal. Our partner to the south, the U.S., has a soaring currency that will inhibit its exports. As a result, the […] Read more
Time to distribute the farm assets
Farm Financial Planner: At age 80, Mary wants to pass her wealth on to her family and a favourite charity
As her 80th birthday approaches, a farm widow we’ll call Mary finds herself in a dilemma. Her husband Bob passed away 10 years ago, leaving substantial life insurance benefits which she used to cover living expenses and farm losses. Mary’s 1,280-acre grain farm is rented to tenants. The farm has broken even with recent high […] Read more
Investing for tough times ahead
Guarding Wealth: When you have to change your strategy from “making money” to “not losing money”
We are coming to the end of the longest bond bull market in history, a 32-year trend of falling interest rates and rising bond returns. Marked by a final decade of global stagnation and, recently, inflation rates virtually at the doorstep of deflation, the next step is expected to be a small rise in short […] Read more
Pay off debts before selling the farm
Farm Financial Planner: This Manitoba couple can pay off their debts and look forward to a reasonable retirement
In south central Manitoba, a couple we’ll call Herb and Cathy, both 64, are looking ahead to their future. They have farmed grain for more than two decades and have two children, a son age 40 and a daughter, 42. Each has a career off-farm and neither has an interest in returning to the family […] Read more
The inevitable rise in interest rates
Guarding Wealth: Interest rates are going to have to rise sooner than later. The trick will be in the timing
It is inevitable that interest rates will rise, but when that will happen, nobody knows. On Sept. 17, the U.S. Federal reserve announced that, yet again, the inevitable increase would be postponed, perhaps to December, perhaps beyond. Until then, the Fed will keep interest rates at the emergency level that has prevailed for half a […] Read more
Farm Financial Planner: Finding a comfortable retirement
Farmers can turn marketing board quota and a modest income into a comfortable retirment
In southern Manitoba, a couple we’ll call Herb, 63, and Martha, 60, have a mixed farm with most of their effort and capital invested in producing poultry products for a group of grocery stores in Winnipeg. They operate 310 acres of land surrounding their 10-acre yard with an aging farm house, their 35-year old son’s […] Read more
Low interest rates: opportunity and peril
Low interest rates are tempting, but in the long run, debt always comes with a risk
Almost every Canadian farm family has four financial goals: buy a home, pay off farm and home debt, educate the kids and build up retirement savings. Satisfying all is a problem of balancing each. Very low interest rates for the last five years have made it easier to pay off debts and buy a home, […] Read more
Keep farming for a lower tax bill
Keeping the farm operating will hold taxes down and maintain the farm legacy
Farming has been good to a couple we’ll call Horace, 50, and Betsy, 40. Their 3,500-acre grain operation has been consistently profitable. Now they want to plan their retirement and succession, but it’s too early to tell if their daughter, Moira, 10, will be interested in continuing to farm. The couple plan to stay with […] Read more
The difference between mutual funds and exchange traded funds
This look inside mutual funds and exchange traded funds shows how each of these investment types work, and how each of them handle risk
How do mutual funds really work? At the ground level, they are diversified collections of assets, usually stocks or bonds — sometimes both — in balanced funds, picked for their ability to generate income and/or capital gains. The key word is “diversified,” for that is their distinctive advantage. They are usually actively managed to seize […] Read more
Cyber-Savvy Farmer
