BUSINESS INVESTING
Keep a close eye on the direction of government policy but remember policies can change.
Investment tips shared Andy Macfarlane and Richard Green, two well-known agribusiness professionals and experienced investors, share their thoughts about investing off and on farm.
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tart early, have discipline around saving, be patient, and learn from experienced investors. These are some of the principles that Andy Macfarlane suggests farmers consider when they are looking at growing their capital base through off- and on-farm investments. The Ashburton-based farm consultant and director has had many years’ experience in investing on and off farm, both personally and professionally, and offers the following advice.
In a lifetime of farming there will be just a few opportunities to take lump sums of money off the farm. This money can be spent on on-farm development or off farm, depending on the family situation and relative returns. Off-farm investments are often preferable where the intent is to generate seed capital for non-farming family members and reduce the burden of succession for family members taking over the farm.
NEVER UNDER-ESTIMATE THE POWER OF COMPOUND INTEREST
SPREAD RISK
Start early, stay with it and be patient. Starting off-farm investments at 65 is a bit too late - instead farmers should start early and make incremental investments.
Take measured risks - don’t punt the farm. While farms are a great capital base to leverage off, risks need to be measured and spread, not doubled. “You want to spread your risk, not increase it.”
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Dairy Exporter | www.nzfarmlife.co.nz | July 2020
