6 ms·

I understand that you're probably estimating bare minimum costs, but getting started for half a million dollars is actually way more affordable than I imagined

I understand that you're probably estimating bare minimum costs, but getting started for half a million dollars is actually way more affordable than I imagined you would describe. That's comparable to what some people pay for a middle class suburban home near a lot of the mid-sized metropolitan areas around the United States.

lettergram 6y ago
That’s literally the cost I just paid lol But yes, $500k is about the minimum. Plus ~40 acres. For grass fed beef you can raise probably 20 heads and buy supplementals. You might only make $5-10k up to maybe $30k (buying hay or leasing other land to grow feed) profit initially. BUT it’s not a ton of work, really only feeding the cattle every other day, doing injections on the cattle and cutting / bailing hay 2-3 times a year. Average is probably 10 hrs of work a week. When those trees I mentioned start growing in, I can net closer to $2-3k per acre. So closer to $60k profit on that 40 acre farm. That’s only one harvest a year, plus checking periodically. I can work a full-time job besides the 2 week harvest season. Another important factor for me, was the protection from inflation. Food prices go up during inflation, so my farm is worth more. Further, what the farm PRODUCES is worth more. So I took out a loan and my loan will be easier to pay off from the production and be worth more when I sell. Effectively letting me leverage the loan to make more profit.
- deleted 6y ago
  [deleted]
- DC1350 6y ago
  Couldn’t you feed a family high quality food for a few decades with $500k? This seems like a lot of effort if you aren’t planning on making a profit.
  - lettergram 6y ago
    That’s fair, but two posits (1) you can’t really get high quality food outside a lot of sourcing and effort. As an example, I grow purple green beans that taste better than any green bean I’ve every bought. You may be able to get that particular green bean from a specialty shop, but I’m doing this with 30 different plants on 1-2 acres. I can harvest and eat the plants the same day as well (which has far more nutrition). (2) I shouldn’t have said no profit, I do have a plan to make it profitable. But that’s not the primary goal, nor would it be my primary job. I’m a software engineer by trade and can work remote easily. Further, I can later sell the farm and equipment. It’s likely I’ll make a profit there as well.
    - dakna 6y ago
      I'm in a fairly similar situation, albeit on a smaller scale (6 acres) and I do this for reasons you already mentioned (nutrition, inflation hedge) plus climate change. I have years of experience growing veggies in my backyard and I agree, it takes a lot of money to get the same quality food elsewhere, and some specialties are out of reach. It's also a lot of fun. I'm also planning for retirement in the 2030s and I'm trying to funnel my software engineering money into a small productive farm/market garden that produces enough to make a small profit and hire some help when needed. I haven't found a good way to offset my initial investment costs as a beginning farmer against my regular income from my main job, but I just started to learn more about Schedule F Profit/Loss from farming. Any pointers on what to read or CPA recommendations are highly appreciated. Greetings from Hardiness Zone 6, which I assume will turn into Zone 7 within my lifetime.
      - lettergram 6y ago
        Frankly, while I've bailed hay, grown my own food, etc. I'm also unfamiliar with this scale - just decided to go for it. I already have someone willing to harvest for me and split the profits 50/50. I'm offering them a 30(me)/70(them) split on the condition they teach me to run their equipment, explain what they know, etc. There's not really a guide on starting a farm, you need to find someone who knows and work with them. I also have family members in the cattle industry, construction and one family member specializing in maintaining prairie land. Speaking with them I am working to figure out the best way to maintain and improve the farm. For instance, I have a cabin on the property from the civil war period; we're going to repair it and put a new roof on etc.
    - rootusrootus 6y ago
      > you can’t really get high quality food outside a lot of sourcing and effort To be fair, this is very dependent upon the region you live in. I live in a suburban area bordering on farmland, and so I can get piles of really good quality foods at my local farmer's market every weekend. There's farms naturally raising grass fed beef, as well. And a couple people that go out to the Pacific and catch fish and then sell it at the same farmer's market. I imagine that's a bit of a luxury in some places, for sure, but I'd bet it's not that uncommon, either.
  - valvar 6y ago
    That's assuming it's their money to begin with (I'd assume it's a loan). With those numbers it takes about a decade to make it back — perhaps more with capital costs. That doesn't sound bad at all? What were you expecting?
    - DC1350 6y ago
      I don’t know. It just seems inefficient to me. Farming is not enjoyable work for most people who do it so the whole plan just reminds me of Marie Antoinette’s peasant role play hobby.
  - nradov 6y ago
    That $500K doesn't disappear. In a few decades the farm can be sold and you can get your money back (depending on changes in land prices).
    - x86_64Ubuntu 6y ago
      But farms across the nation are failing and conglomerating. It just seems like he's investing in horses after the Model T has been released.
      - tengbretson 6y ago
        These conglomerating farms are exactly the reason for the lower quality food the poster is talking about. If the trend you identify continues then the relative scarcity of high quality food will rise.
- gruez 6y ago
  >Another important factor for me, was the protection from inflation. Food prices go up during inflation, so my farm is worth more. this is a moot point because literally any other thing you invest it (short of maybe government bonds) protect you from inflation.
  - lettergram 6y ago
    Not quite. Stocks, gold, Bitcoin, a house you live in (not rent) don’t produce anything (unless your stock has a dividend). You want something that produces. Say I buy $300k worth of gold, 10% inflation hits and there’s no change in demand and its now worth $330k. Say I buy a $300k farm. 10% inflation hits and there’s no change in demand. It’s now worth $330k... but the value of production of said farm is also up 10%. This makes an opportunity. If I take a loan on my farm in year 1, I can buy a larger farm (say on 3% interest). If inflation hits I can pay down that farm loan at an ever increasing rate. This allows someone to leverage the inflation and debt to make larger purchases. It protects your INCOME from inflation. Not just your investments.
    - smeyer 6y ago
      What you're describing isn't specific to farms. If you take out a fixed-rate loan, you'll benefit from increases to inflation (since it makes the inflation-adjusted interest rate lower). This is true whether you use that loan to buy a farm, a house, gold, et cetera. Other than the loan, it makes sense to work in real dollars (inflation adjusted) not nominal dollars (non-inflation adjusted). In real dollars, you $300k farm doesn't change in value and your income also doesn't change. In real dollars, gold (in your example) also doesn't change. Gold is a poor and weird investment for a variety of reasons, but it's not like farms are magically better than other asset classes (like regular old stocks).
      - eej71 6y ago
        Perhaps I'm deeply misinformed, but as a hedge against a modest amount of regular inflation, stocks generally perform quite well over the long term - especially when compared against other asset categories.
- jiofih 6y ago
  > Average is probably 10 hrs of work a week > closer to $60k profit on that 40 acre farm > Food prices go up during inflation, so my farm is worth more > my loan will be easier to pay off from the production and be worth more when I sell > I can work a full-time job besides the 2 week harvest season Jesus Christ, I’m sorry to say this but you are in for a rude, violent awakening. Best of luck.
- mbrodersen 6y ago
  Best of luck. I think you are about to get a very rude and brutal awakening when your dreams meet reality. Part of my family had the same dream and ideals. It nearly destroyed them.

lettergram 6y ago

That’s literally the cost I just paid lol But yes, $500k is about the minimum. Plus ~40 acres. For grass fed beef you can raise probably 20 heads and buy supplementals. You might only make $5-10k up to maybe $30k (buying hay or leasing other land to grow feed) profit initially. BUT it’s not a ton of work, really only feeding the cattle every other day, doing injections on the cattle and cutting / bailing hay 2-3 times a year. Average is probably 10 hrs of work a week. When those trees I mentioned start growing in, I can net closer to $2-3k per acre. So closer to $60k profit on that 40 acre farm. That’s only one harvest a year, plus checking periodically. I can work a full-time job besides the 2 week harvest season. Another important factor for me, was the protection from inflation. Food prices go up during inflation, so my farm is worth more. Further, what the farm PRODUCES is worth more. So I took out a loan and my loan will be easier to pay off from the production and be worth more when I sell. Effectively letting me leverage the loan to make more profit.

deleted 6y ago
[deleted]
DC1350 6y ago
Couldn’t you feed a family high quality food for a few decades with $500k? This seems like a lot of effort if you aren’t planning on making a profit.
- lettergram 6y ago
  That’s fair, but two posits (1) you can’t really get high quality food outside a lot of sourcing and effort. As an example, I grow purple green beans that taste better than any green bean I’ve every bought. You may be able to get that particular green bean from a specialty shop, but I’m doing this with 30 different plants on 1-2 acres. I can harvest and eat the plants the same day as well (which has far more nutrition). (2) I shouldn’t have said no profit, I do have a plan to make it profitable. But that’s not the primary goal, nor would it be my primary job. I’m a software engineer by trade and can work remote easily. Further, I can later sell the farm and equipment. It’s likely I’ll make a profit there as well.
  - dakna 6y ago
    I'm in a fairly similar situation, albeit on a smaller scale (6 acres) and I do this for reasons you already mentioned (nutrition, inflation hedge) plus climate change. I have years of experience growing veggies in my backyard and I agree, it takes a lot of money to get the same quality food elsewhere, and some specialties are out of reach. It's also a lot of fun. I'm also planning for retirement in the 2030s and I'm trying to funnel my software engineering money into a small productive farm/market garden that produces enough to make a small profit and hire some help when needed. I haven't found a good way to offset my initial investment costs as a beginning farmer against my regular income from my main job, but I just started to learn more about Schedule F Profit/Loss from farming. Any pointers on what to read or CPA recommendations are highly appreciated. Greetings from Hardiness Zone 6, which I assume will turn into Zone 7 within my lifetime.
    - lettergram 6y ago
      Frankly, while I've bailed hay, grown my own food, etc. I'm also unfamiliar with this scale - just decided to go for it. I already have someone willing to harvest for me and split the profits 50/50. I'm offering them a 30(me)/70(them) split on the condition they teach me to run their equipment, explain what they know, etc. There's not really a guide on starting a farm, you need to find someone who knows and work with them. I also have family members in the cattle industry, construction and one family member specializing in maintaining prairie land. Speaking with them I am working to figure out the best way to maintain and improve the farm. For instance, I have a cabin on the property from the civil war period; we're going to repair it and put a new roof on etc.
  - rootusrootus 6y ago
    > you can’t really get high quality food outside a lot of sourcing and effort To be fair, this is very dependent upon the region you live in. I live in a suburban area bordering on farmland, and so I can get piles of really good quality foods at my local farmer's market every weekend. There's farms naturally raising grass fed beef, as well. And a couple people that go out to the Pacific and catch fish and then sell it at the same farmer's market. I imagine that's a bit of a luxury in some places, for sure, but I'd bet it's not that uncommon, either.
- valvar 6y ago
  That's assuming it's their money to begin with (I'd assume it's a loan). With those numbers it takes about a decade to make it back — perhaps more with capital costs. That doesn't sound bad at all? What were you expecting?
  - DC1350 6y ago
    I don’t know. It just seems inefficient to me. Farming is not enjoyable work for most people who do it so the whole plan just reminds me of Marie Antoinette’s peasant role play hobby.
- nradov 6y ago
  That $500K doesn't disappear. In a few decades the farm can be sold and you can get your money back (depending on changes in land prices).
  - x86_64Ubuntu 6y ago
    But farms across the nation are failing and conglomerating. It just seems like he's investing in horses after the Model T has been released.
    - tengbretson 6y ago
      These conglomerating farms are exactly the reason for the lower quality food the poster is talking about. If the trend you identify continues then the relative scarcity of high quality food will rise.
gruez 6y ago
>Another important factor for me, was the protection from inflation. Food prices go up during inflation, so my farm is worth more. this is a moot point because literally any other thing you invest it (short of maybe government bonds) protect you from inflation.
- lettergram 6y ago
  Not quite. Stocks, gold, Bitcoin, a house you live in (not rent) don’t produce anything (unless your stock has a dividend). You want something that produces. Say I buy $300k worth of gold, 10% inflation hits and there’s no change in demand and its now worth $330k. Say I buy a $300k farm. 10% inflation hits and there’s no change in demand. It’s now worth $330k... but the value of production of said farm is also up 10%. This makes an opportunity. If I take a loan on my farm in year 1, I can buy a larger farm (say on 3% interest). If inflation hits I can pay down that farm loan at an ever increasing rate. This allows someone to leverage the inflation and debt to make larger purchases. It protects your INCOME from inflation. Not just your investments.
  - smeyer 6y ago
    What you're describing isn't specific to farms. If you take out a fixed-rate loan, you'll benefit from increases to inflation (since it makes the inflation-adjusted interest rate lower). This is true whether you use that loan to buy a farm, a house, gold, et cetera. Other than the loan, it makes sense to work in real dollars (inflation adjusted) not nominal dollars (non-inflation adjusted). In real dollars, you $300k farm doesn't change in value and your income also doesn't change. In real dollars, gold (in your example) also doesn't change. Gold is a poor and weird investment for a variety of reasons, but it's not like farms are magically better than other asset classes (like regular old stocks).
    - eej71 6y ago
      Perhaps I'm deeply misinformed, but as a hedge against a modest amount of regular inflation, stocks generally perform quite well over the long term - especially when compared against other asset categories.
jiofih 6y ago
> Average is probably 10 hrs of work a week > closer to $60k profit on that 40 acre farm > Food prices go up during inflation, so my farm is worth more > my loan will be easier to pay off from the production and be worth more when I sell > I can work a full-time job besides the 2 week harvest season Jesus Christ, I’m sorry to say this but you are in for a rude, violent awakening. Best of luck.
mbrodersen 6y ago
Best of luck. I think you are about to get a very rude and brutal awakening when your dreams meet reality. Part of my family had the same dream and ideals. It nearly destroyed them.