should I change my plans?

[cptacek]

Hello, I have a bit of a dilemma.

First, a little bit about me: I am a Software Engineer in Texas making about $90k, own my own house with about $25,000 equity, save 15% in my 401(k) with a 4% company match (which is almost maxing out), max out my Roth IRA, invest $50 a month in a mutual fund, and have no credit card debt except about $1200 that is no interest until 2010.

I also am a "silent" partner with my father, who is a farmer. I bought ~80 cows, he takes care of them, and when we sell the calves each year, I get 1/3 of the money and he gets 2/3 (cause he is doing all the work). I did take out a business loan to buy the cows, but will have that paid off for sure after we sell the next calf crop, if not sooner (~$16,000) This interest is at 7.25% (which is tax deductible), and I have been sending every last penny to that loan ever since I took out the loan.

ok, so I think I am doing pretty good on the financial side of things.

I am dating a farmer in Kansas...long distance relationships suck, but I am looking to transfer about 2 hours away from him. If things go how I hope they do, within the next few years, we'll get married and I'll move out to the farm. There goes my income (because there are no jobs with that kind of pay in the middle of Kansas)...I'll probably be able to make $30k there.

If anyone knows anything about farmers, you know that most of them are broke. I know that I have a great opportunity now to do something with the income I have, but I don't know what to do. What I'm thinking:

1. I could continue to do what I am doing. I will really boost my (our) retirement that way, and if we do get married, that is good to have for later.

2. I could invest some of the money in a mutual fund or ING account for the next few years so that if I could really invest some money in expanding the farm once we have the state's and church's blessing.

3. I could do a combination of both...or at least wait until we are engaged before starting to make changes.

Now, before anyone jumps on my back, I wouldn't lump any money together or invest in his farm before we were married. I believe that that kind of monetary commitment needs an even stronger commitment to back it up.

[nanamom]

Re: should I change my plans?

First of all I applaud your wanting to wait until you have the church and state's blessing to invest in his farm. Then, can you work online? Many companies have a work at home option that doesn't pay as well but does pay and eliminates the need for a car (communte) and "work clothes" They take some looking but are out there. Farmers are often broke but a living can be made. Food bills are less especially with a big garden and canning ability. You said you own your home, can it become rental property? Can you sell at a profit and invest in closer rental property? I would consider investing some for retirement for the two fo you and saving some in a long term high interest account until you both see where it will be best utilized, on the farm or in retirement. Also before you get engaged, look hard at what you will be living on and make sure you are OK with that. I know Love conquers all but sometimes start reality can be very troublesome.

[Ima saver]

Re: should I change my plans?

I would increase your contributions to your mutual funds to as much as you can spare.

[Fern]

Re: should I change my plans?

I would continue to do #1, or #1 and 2. If there's one thing i've learned, it's not to count on any one thing happening til it's really in the bag. Either way, whether you continue to nearly max out on your retirement savings or put more into taxable investments, I don't think either would be a bad decision, but my choice would be to max out on the retirement investments first.

It's just that, say worst case scenario it doesn't work out your farmer, would you regret having put your retirement savings on hiatus? I don't know how old you are, but retirement saving is SO much easier if you have a consistent and regular investment plan, and stick to it. Too many people, i think, do it 'when they can,' or when it's convenient, becus it's so far into the distant future, when they really should be making it a priority.

[Haku]

Re: should I change my plans?

Well....

Your financial situation is beautiful. I wish I was in your shoes in that respect.

However, may I put on my Devil's Advocate hat for a moment and point that it is entirely possible that your Long Distance Relationship with this farmer may not work out? I know you have hopes that it will work out. I also hope that it will work out, but the possibility that it may not exist, especially if this is someone you have yet to spend a large amount of face-to-face time with.

So, I have to agree with fern and say that I think you should do your best to maintain #1. I think you have enough financial sense about you to figure out the rest.

[cptacek]

Re: should I change my plans?

I agree that things might not work out like I hope they will...I know lots of examples where the "perfect couple" didn't work out.

Probably the best thing to do is keep plugging away into my retirement while I can...at least for the immediate future. As (if) we get closer I can always change at that point.

I have been thinking about renting the house out, and have also thought about selling it and buying some rental properties when I get my new job. Getting some passive, consistent income would certainly help, and would diversify me out of stocks etc.

You are right that the cost of living will be lower...at least housing, food, etc. Gas will still cost the same, though. And, farming is a very expensive enterprise, what with land cost, equipment cost, fertilizer, etc.

[Fern]

Re: should I change my plans?

Farming is a tough way to make a living and like you said, very hard work.

What kind of farming would it be? I think it's best these days to carve out a special niche that enjoys growing popularity these days, like organic produce, or selling such to upscale restaurants that will the premium or something like that. Seems like just doing dairy or beef cattle is not profitable unless you're one of those huge conglomberate type operations. And with poulty, now you've got to really worry about avian flu outbreaks.

[Ima saver]

Re: should I change my plans?

I had 3 rental properties and it was a nightmare. Something was always breaking and than goodness my husband was handy. We sold all 3 for far less than we paid for them, just to get rid of the headache.

[markio26]

Re: should I change my plans?

life has a way of working itself out... i think you will be fine, with whatever you decide.. really, only you can change your life... we can listen and offer input... i would be sure to have my finances in order.. maybe a trust established, iras, mutual funds, etc... only in your name. a prenup is an option also... my son had one, for the first 5 years of marriage, and they are happily married in their 8 th year.. prenup has been expired for 3 years now.. it pays to prepare.... best wishes.