Hey Scott,
My husband (late 30s) grew up on farms and has been saving for one ever since his first job. But I’m afraid taking the leap will make us ‘rural povvos’. My husband earns $220K, I’ve stayed home with the kids, and we have over $1 million in cash and shares thanks to subsidised accommodation through his work.
We’ve found a $2 million farm in a lovely country town next to excellent public schools. On one income at 6% rates, it’s not doable. But with my part-time earnings we can swing it! In five years, when all the kids are at school, I’ll work full time earning around $100K. Then we can smash it.
But I can’t help looking at lovely houses we could pay off instead – no stress, and all the freedom before the kids fly the nest. The farm has been our driving force and the reason we’ve saved so carefully, and it’s something in my husband’s heart. Is there an exception to your ‘postcode povvo’ rule for hobby farms? Tax benefits, an asset … and a dream fulfilled? Should we jump?
Sally (and Steve)
Hi guys,
You’ve saved over a million bucks in your 30s? That’s super impressive. Well done.
Yet you still need to stress-test yourselves: could you afford it if interest rates hit 8%? If one of you lost your job for six months? When (not if) the farm needed $50K in unexpected repairs)?
If you can honestly answer ‘yes’ to all three, I’ll grant you an exemption to being a rural povvo.
That said, buying a small-scale farm rarely stacks up financially. The supposed tax benefits are nothing compared to the ongoing costs of keeping the joint running.
If you’re in any doubt, cosy up on the couch tonight and watch Clarkson’s Farm. Just remember: he’s a multi-squillionaire earning a gajillion bucks from making the show, with the great unwashed lining up to buy his overpriced farm produce.
Still, life is about trade-offs.
You’ll probably have to work more. You may miss out on time with your kids. It may put you under financial stress at times. But it could also be the best thing you ever do. It might give your husband purpose, fulfil his dream, and build a life you both love.
Only you can decide whether it’s worth it.
Whatever you decide, remember Clarkson’s golden lesson: you don’t buy a farm to make money – you buy a farm to spend it!
Scott