Ad­vice avail­able about re­tire­ment

Matamata Chronicle - - Rural Delivery -

Re­tire­ment ad­vice will be pro­vided to farm­ers at this year’s Dairynz Farm­ers’ Forum at Mys­tery Creek Events Cen­tre in Hamil­ton on May 23 and 24.

Lead­ing a work­shop on suc­ces­sion plan­ning is lawyer and au­thor of Keep­ing Farm­ing in the Fam­ily, Ian Black­man.

‘‘Even if you are a sharemilker who doesn’t yet own land, it’s es­sen­tial to plan for re­tire­ment and suc­ces­sion now and to struc­ture your busi­ness cor­rectly from the start of your ca­reer,’’ said Mr Black­man.

He has de­vel­oped what he be­lieves is the per­fect so­lu­tion for the co­nun­drum that is faced by farm­ing fam­i­lies con­sid­er­ing suc­ces­sion plan­ning.

‘‘The so­lu­tion to suc­ces­sion plan­ning is set­ting up the right le­gal struc­ture: a trad­ing com­pany that owns all the farm­ing as­sets, with the shares in that com­pany be­ing owned by a fam­ily trust.

‘‘This is very dif­fer­ent to the model most com­monly seen in the in­dus­try, which is hav­ing the fam­ily trust own all farm­ing as­sets. How­ever, through my ex­ten­sive work in the ru­ral sec­tor, I’ve seen proof that the cor­rect le­gal struc­ture is the best so­lu­tion by far.

‘‘That’s be­cause it al­lows the suc­ceed­ing child, or chil­dren, to pur­chase the farm, for value, over a 20-30 year term, which is of­ten seen as the fairest op­tion by the non­farm­ing chil­dren,’’ he ex­plained.

The suc­ces­sion plan­ning process Mr Black­man will de­tail at the Farm­ers’ Forum work­shop will in­clude ques­tions that help farm­ers fig­ure out their goals for fi­nan­cial and emo­tional se­cu­rity.

In ad­di­tion to get­ting suc­ces­sion plan­ning ad­vice, best-sell­ing au­thor and fi­nan­cial ad­vi­sor, Martin Hawes, will lead a work­shop for farm­ers on smart in­vest­ment strate­gies for each stage in a dairy­ing ca­reer.

‘‘The farm is a means to an end and the ‘end’ is even­tual fi­nan­cial free­dom. Farm­ing should help you cre­ate wealth so you can live the life you want to live.

There­fore, you need to cast your eye world­wide for in­vest­ment op­por­tu­ni­ties.

The best in­vest­ment isn’t al­ways rein­vest­ing in your own farm or buy­ing the farm next door.

‘‘Many dairy farm­ers spend their lives go­ing through the mo­tions of farm­ing and do­ing a great job. But, they don’t have a clear vi­sion of their ul­ti­mate fi­nan­cial and life­style goals. Once they de­velop these goals, the next step is in­vest­ing wisely to achieve them,’’ he said.

Mr Hawes said a com­mon in­vest­ment strat­egy for many New Zealand dairy farm­ers was to buy up more farms.

He said this was rarely the best in­vest­ment strat­egy past a cer­tain ca­reer stage, which was usu­ally around the age of 45 to 50.

‘‘In mid­dle age, it’s most im­por­tant to con­cen­trate on low­er­ing farm debt and di­ver­si­fy­ing in­vest­ments off-farm. Buy­ing more and more New Zealand farms – af­ter a cer­tain ca­reer stage – is like go­ing to the casino and con­tin­u­ally putting all your money on the red seven.

‘‘It’s a very risky strat­egy,’’ he ex­plained.

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