In my Road Warrior travels, I had the opportunity to listen to Tom Haarmann, a financial expert and manager of financial services for Carolina Farm Credit. He had some interesting perspectives concerning building wealth. He listed seven common denominators of those who successfully build wealth:
- Live below their means. Wealth is not the same as income. If you make a good income, like many crop farmers this year, and spend it, you are not getting wealthier, just living high. Family living expenses for grain producers is moving toward the $75,000 - $100,000 range, on average, according to some record systems. It is not how much you earn, it is how much you spend.
- Allocate time, energy, and money efficiently in ways that build wealth. This is where enterprise budgeting, planning, strategy, and execution pay off. Do not forget to drop what is not paying.
- Financial independence is more important than displaying high social status. Those with the fancy “Ken & Barbie Doll” housing realize this.
- Parents do not provide economic outpatient care. There is an old saying, “The first generation makes it; the second generation preserves it; and the third generation loses it.” This point is well-made in this statement.
- Adult children are economically self-sufficient. Teach children money management from an early age. Entitlement is not welcomed in the wealth-building household.
- Be persistent in targeting opportunities. Walt Disney and Henry Ford were failures out of the chute, but realized the power of persistence.
- Choose the right occupation. Farming and ranching are ripe with opportunity for producing food, fiber, fuel and products for the life sciences.