Biggest transfer of wealth in US history as the baby boomers age.
Sent from my iPad using Tapatalk
Things that make me go Hmmmmm....Land Prices
- Thread starter Trapshooter1
- Start date
-
- Tags
- None
Biggest transfer of wealth in US history as the baby boomers age.
Sent from my iPad using Tapatalk
deerdown
Well-Known Member
I saw a report yesterday that said 60% of Americans are invested in the stock market. I would have guessed more.
I personally have not substantially been in the market since 2008/09... Yep, missed out on a lot of upside for sure....
Thinking about jumping in with some dollars. I know you can't time such things, but maybe wait until another 5-10% shaved off the market would be a prudent time to jump in if one isn't invested today? Maybe ladder in those dollars starting now, then every week or 2? Not sure the best approach. Will be buying something like VOO or FXAIX. Thoughts?
DMarley83
DMARLEY83
Thi
Probably the best post of the week! LOVE IT!!!
I checked the big board and my land says still valuable!!
Probably the best post of the week! LOVE IT!!!
Lucky 13
Active Member
I am a big fan of FXAIX. Like many index funds, the fees are so low that they don't really amount to anything. Most professional traders can't beat the SP500 on the long run
60% of americans are in the market from what I have read also BUT the amount of investment is HIGHLY slanted
93% of all stocks are owned by the wealthiest 10% of investors
The bottom 50% of Americans in terms of net worth only own 1% of stocks.
sep0667
Land of the Whitetail
It might drop rec land prices some. My down payment was largely money I had invested in an individual brokerage account. For some that may have been socking money away into an account to use as a down payment on a farm and were getting close to maybe buying something this spring or this year (depending on how long it stays down) they may now be out of putting money down on something because they are now down thousands, so this might have a drop on rec land prices. Even if someone still has enough to put down on something and they just lost 10% the past couple days they may not want to pull the trigger on ground right now until they get their loses back or ride it out longer so they are not realizing a loss.
Deerdown-any sort of sp500 fund would be good, long term they do better than throwing a bunch of money at one individual fund. VTI, FSKAX are other commone good ones. You are buying a share of the top 500 us companies, if a company falls out of the top 500 the next is put in. Plus buying any of those funds like VTI for example you are buying shares of say apple, google, etc within that fund.
Deerdown-any sort of sp500 fund would be good, long term they do better than throwing a bunch of money at one individual fund. VTI, FSKAX are other commone good ones. You are buying a share of the top 500 us companies, if a company falls out of the top 500 the next is put in. Plus buying any of those funds like VTI for example you are buying shares of say apple, google, etc within that fund.
tall@wide
PMA Member
To me the hard part of buying land and not paying cash would be the amount you spend in interest payments. Even on a small parcel like 80 acres it's staggering what you pay in interest over a 20 year loan. It almost doubles the price you pay for the farm versus paying cash. Very poor investment in most cases except for the enjoyment you get out of using the land.
Def not a poor investment. You get to write off all the interest, improvements, depreciate any buildings, fences, tile, etc. If filing a schedule F there's herbicide, seed, mileage going to farm, etc.... all write offs
Enjoying it all the while it appreciates in value long term.
Windlooker
Well-Known Member
Pre pay principle. Look at your amortization schedule. Pay the current months amount (principle and interest). Look ahead to the next month and write a second check for the principle only. You can’t be charged interest on pre paid principle. If one has the funds available. Will cut the mortgage life down exponentially as you’re making two payments saving all the interest on the second payment.
Keep in mind the principle is a fraction of the total payment, especially early in the loan. That does shift as you move later into the note, but it’s worth it.
Keep in mind the principle is a fraction of the total payment, especially early in the loan. That does shift as you move later into the note, but it’s worth it.
Last edited:
Hardwood11
It is going to be a good fall!
I’ve definitely used loans (paid principal & interest) for several years in farms . In my case the income had paid a good portion of the payments. Not a full cash flow, but close.
Meanwhile it has appreciated…
deerdown
Well-Known Member
I've done the same, BUT, that was when land returned 5% and loan rates about the same. This market is not like then, Returns are 2-2.5% and loans are what 7-8% ?...
Makes a big difference.
smithhunter1975
Active Member
I am in the same boat as Deerdown. I have been strongly considering buying another farm as it is an investment that I really enjoy. Seems like 2-2.5% return is a "good" recreational property these days, most are even lower than that. Even if paying cash this seems like a not so great investment. I cannot see recreational ground continuing to shoot up in value or else it will be higher than ag land at some point (given ag land may be slightly dropping).
Windlooker
Well-Known Member
Buy it. If you don’t someone else will. I’ve purchased several pieces over 23 years, my last was last October. There’s another piece I want and would buy tomorrow if it came available. Yes, I’d be extending myself. I’ll find a way.
All the blah blah about politics, rates, markets always change. Regardless it’s the best investment on the planet.
All the blah blah about politics, rates, markets always change. Regardless it’s the best investment on the planet.
Hawk32
PMA Member
Could some of you talk to my wife for me.lol Maybe she would listen to you because every time I bring up buying another piece I have my eyes on I get beat down.
Windlooker
Well-Known Member
I got lucky and introduced mine to deer hunting about 8 years ago. She loves it and is a better hunter than me. It’s an easier sell lol.
Buy!
Will it be worth more in 10 years than today? I'd bet the house on it.
Will it be worth more in 10 years than today? I'd bet the house on it.
deerdown
Well-Known Member
The fact that someone else will buy it has no bearing on the way I make my decisions. The same can be true of anything for sale in this world, why would you base your decision based on what someone else would do? Don't let FOMO drive your decision....
I'm not looking to buy land right now. I watch the market in my area very closely, and if the right piece for me came up, I'd buy it, but not looking to buy as an investment right now. Happy with my other investment returns at the moment. Everyone is different, depends on age, what kind of investments one has and how diversified they are, how much of your assets are in land already, what's your goals, what's your health, what's for sale, what does your wife think/want, what bills you have coming for the kids education, medical bills.....There is no 1 size fits all. Do what you're comfortable with. Land is not super liquid especially if you need to get what you paid and you need it tomorrow, some other investments are easier to exit. Land has been a great investment, there are others as well.
One thing I tell my younger friends, and wish someone told me earlier, You have to invest to get ahead. That has rang true for decades, but sometimes there are ups and downs with those investments. Sometimes it's easier said than done, but to get ahead, you have to pull the trigger at some point. Good Luck
Windlooker
Well-Known Member
When I say i buy land that’s not the only area of investment. Be diverse of course. I was in a public safety job when I started. So I took 10% of my gross income and put 5% in the market and 5% to save for land. That’s where I started.
Now we’re in the market, land, rental properties and angel investing. It’s taken years and a ton of work and sacrifice, but overall it’s been worth it; with land being the most dependable without a doubt.
Now we’re in the market, land, rental properties and angel investing. It’s taken years and a ton of work and sacrifice, but overall it’s been worth it; with land being the most dependable without a doubt.
Last edited:
Hardwood11
It is going to be a good fall!
I’m looking for an angel investment !! More land for hunting , I’ll pay you 5%!
Win win !
I promise… this ALMOST Exact mindset of “ground too high, doesn’t pencil out” was to this same degree & difficulty 25 years ago. I bought an 80 with half ROUGH tillable for $115k then. The best I could get for rent was “I’ll plant your food plot if I can farm it for FREE”. Corn was like $1.50-2.00 a bushel-Ish. It had negative cash flow. I had so many buddies or folks I knew that were hunters that thought it made no sense to buy land. INTEREST on that farm was 7.5%. I still remember a billion comments like “for your payment, you could go on 2-3 outfitted hunts a year for that $!!!” It was “as difficult” or “close” 25 years ago as it was today. There were just as many guys that said “no way” or “can’t do it” back then.
When commodities went up and interest rates went down…. Prices shot up a good bit. Like “it used to be $1500 an acre. Now it’s 2500 an acre! Or $3500 later on, etc etc”. & SOME guys thought those jumps were insane & didn’t buy. Or I knew a few that said “dang, I’m cashing in!! These prices are stupid!! I’m selling!!!”
Honestly…. Any point in time I’ve watched land over 30+ years now… it’s always been “hard”. “I dunno if I should?!?!?!” “Nervous”. Whatever. Right NOW- today - prices are reasonably high. Interest is a bit high. Income is “ok”…. Not great. It could get more or less attractive but the “value of land”, risk, willingness to pull trigger, etc - it’s not that much different in reality. Maybe a bit more difficult in one way or another but all the same fundamentals are at play. Just buy some. In reality… even buying a bit…. It’s a “forced savings account” that if u don’t lock in…. MOST people (including myself) will just find other places to spend $ & usually spend it on things that won’t be there in 10 years.
When commodities went up and interest rates went down…. Prices shot up a good bit. Like “it used to be $1500 an acre. Now it’s 2500 an acre! Or $3500 later on, etc etc”. & SOME guys thought those jumps were insane & didn’t buy. Or I knew a few that said “dang, I’m cashing in!! These prices are stupid!! I’m selling!!!”
Honestly…. Any point in time I’ve watched land over 30+ years now… it’s always been “hard”. “I dunno if I should?!?!?!” “Nervous”. Whatever. Right NOW- today - prices are reasonably high. Interest is a bit high. Income is “ok”…. Not great. It could get more or less attractive but the “value of land”, risk, willingness to pull trigger, etc - it’s not that much different in reality. Maybe a bit more difficult in one way or another but all the same fundamentals are at play. Just buy some. In reality… even buying a bit…. It’s a “forced savings account” that if u don’t lock in…. MOST people (including myself) will just find other places to spend $ & usually spend it on things that won’t be there in 10 years.