Looking at their options early will help ensure a bright financial future for this young farm couple
Out on the Prairies of western Manitoba, a couple — we’ll call them Herb, 30, and Sally, 28, are building their lives on a 500-acre farm they own and Herb’s 17 per cent share in a 2,500 acre family farm. Sally has a town job — she works in a bank and pulls down an […] Read moreYoung farmers plan farm growth, family
Guarding wealth: Risk reduction through global diversification
One way to increase your financial security is diversification — spreading your assets among sectors and markets. That way, a single event that injures one stock or bond will not crush your entire portfolio. Farmers usually have almost all of their money tied up in their land, buildings and equipment. Therefore it is a good […] Read more
Guarding Wealth: Trust structure to preserve family farm
Saskatchewan farmers we’ll call Burt, 59, and Martha, 57 — not their real names — are the third generation of a family who have tilled their land in southern Saskatchewan for three generations. The farm, 1,280 acres they own and 1,500 acres they rent, supports a 70 head cow calf operation and 300 acres of […] Read more
Tax management essential for succession planning
For Horace and Belle, retirement planning is all about minimizing taxes and maximizing their investments
In a corner of southwest Manitoba, a couple we’ll call Horace, 65, and Belle, 62, are thinking about retiring in five years. They’d like to have a pre-tax income of $120,000 per year after they’ve left the farm. They also want to harvest $250,000 from the sale of their farm to finance the purchase of […] Read moreRead the covenants before you invest
Just like with any contact, before you sign a contract to buy a bond, make sure you read the fine print
Bonds are supposed to provide investors with a high level of security. Yet over time, the concept of making payments when payments are due has been compromised by investment bankers, who cleverly knit new kinds of bonds. The result is that if you buy shares in any company, one share is almost always the same […] Read moreTransferring the farm
Structure for tax exemptions, let the son buy in at a good price and make sure there’s enough cash left to retire
At their ages of 62 and 56, a couple we’ll call Max and Daphne want to wrap up their life’s work farming in southern Manitoba. They own 1,120 acres of which 700 are planted to various crops, 300 in hay, and 120 in pasture. Their three children, all men in their 30s, will be part […] Read moreThe changing bond market
The bond party is ending and may not return for many decades. After enduring the inflationary 1970s, the worst single decade in the last hundred years, bond prices — what people will pay for a buck of interest — rose nearly every year from 1982 to 2012. That’s a 30-year run, about the longest in […] Read more
Making big bets on economic cycles
These days, it’s hard to find a place where your investment will be safe, let alone lucrative. It helps to make the right choices
There is an economic recovery brewing. Every cycle of boom to bust to boom again is a little different, but the broad patterns are much the same. What counts when economies make their turns is to be in the right type of asset, then the right industry and finally in the right companies. Setting the […] Read moreA gentle plan to preserve value on retirement
With some careful planning and good investing, this Manitoba farm couple can be ready for retirement
Paul and Emma Thompson, as we’ll call them, both 50, have farmed in central Manitoba for a quarter of a century. The couple, whose names we’ve changed to protect their identities, have 800 acres they own personally and another 960 acres of pasture that their farm corporation owns. The corporation also owns 200 head of […] Read moreOff-farm investments in 2013
2013 looks to be the year of the enigma when stock markets flourish in spite of economic news that gives little reason for joy. An armchair investor can look ahead with a degree of confidence that a broadly based investment strategy in Canadian large cap stocks and some exposure to American and global stocks will […] Read more
Cyber-Savvy Farmer
