2005: Happy New Year!

We ended last year with a column focusing on the 10 most common questions that I’m asked on the speaking circuit. Let’s start 2005 off with some new year’s resolutions that you may want to consider.

Check Your Credit History
This year, depending upon the region of the country where you live, you will be able to check your credit history once for free. Please accept the offer because this information is used for many important decisions, e.g. for acceptance and denial of credit, the price you pay for credit, insurance acceptance and rates, and employment decisions.

Save, Save, Save!
Attempt to save 5-10% of net earnings or income annually. Whether a person earns $20,000 or $200,000, the savings rate is approximately the same. Encourage your children to save as well so that the compounding factor can time to work to their advantage.

Liquidity, Liquidity, Liquidity
The year 2005, like 2004, will be volatile economically. Liquidity, or assets that can be turned to cash without disrupting normal operations or lives, is critical. The guideline is to keep two to six months of household expenses/earnings, or working capital (current assets-current liabilities) of 10-20% of expenses if a business. If you have liquidity, you have flexibility.

Knowledge
As agricultural producers, you will differentiate yourself from the pack by information and your ability to work with people. Attempt to gain two to six hours of education per week, either by reading, learning from others, or attending educational seminars or meetings. Second, find five to 10 mentors, or positive people that add to your life, as your informal board of directors.

Goals
Goals are dreams with deadlines. If you write them down, you will be more likely to accomplish them. Keep balance between mental, physical and spiritual aspects, and in 2005 have a little fun on the way to meeting your goals.

Predictions I Made or Missed
Made:

  • The Canadian border opening between January and June 2005. It appears March 2005 was the winner.
  • Increase in short term interest rates.
  • USC and Oklahoma would play the National Championship game.


Missed:

  • Land values would decline slightly.
  • Oil prices might lead the U.S. to a recession.


Better luck this year!!

My e-mail address is:sullylab@vt.edu

Editors' note: Dave Kohl, The Corn and Soybean Digest Trends Editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups.

To see Dave Kohl's previous road warrior adventures type Dave Kohl in the Search blank at the top of the page.

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