We once made a presentation to a large group of farming couples. After the address the group broke up into about 10 groups of 12 people each with a chairman or woman.

We had prepared a list of questions for each workshop group to answer – such as what had been the defining issues so far in their farming success, what had not worked for them and what would they change if they had the opportunity. We then talked about their comments and thoughts in an open forum which took an hour.

Beforehand we had suggested that in New Zealand at the time if there were 100 typical 15 year old girls and boys that statistically this might happen by the time they reached 65 years:

- Probably 28 would be dead.

- Another 30 would be broke

- Likely 20 of them would still be working full time.

- Nine would be working part time and need the income.

- Another 10 would be retired and living comfortably within their income.

- Finally, three of them would be relatively well off

They were scary numbers and interestingly the farming couples made the following comments: 

· Many of the farmers found that it took them some time to learn to swim with the tide and, for example, be an 'autumn spender'.

· Many found that either cash, or a lack of it, had controlled their farming and business careers for much of their lives and much more than they had envisaged.

· All of them felt they were good environmentalists when they were profitable. When they were unprofitable they had far more serious issues to deal with.

· Most of them didn't feel guilty about inflation having provided much more of their present net worth than annual trading profits over the years.

· Many farmers agreed with good advice and historical thinking, but quite a few of them felt that they had developed certain ways of doing things and thinking about things that worked but were a little off the main path.

· As they got older they realised that it was better to have a hen tomorrow than an egg today.

· Many had found that spending right up to their income was easy to do but, over time, was a poor financial and planning policy.

· They realised that borrowing to buy items and assets that decreased in value over time was unwise.

· Many felt that when they first bought their farm that they should have waited a year before they decided where development and capital expenditure would or could be best spent.

· Quite a few of them admitted that as they got older they struggled with keeping up with change particularly financial issues and let alone gaining further financial knowledge.

· Some of them struggled to cope with the irregular cash income of a next pay day which could be months away.

· They were often happy with their own advice and the attraction of field days were sometimes a free lunch, a day off farm and the chance to talk to other farmers.

· Many struggled with the concept that time is money even though off the farm it is probably the foundation in many cases of wealth creation.

· Many understood the power of compound interest but most had been on the wrong side of this equation for much of their farming life.

· They generally had found that saving and investing almost invariably on their farm was a good combination.

· Overall they found that goal setting provided direction and avoided surprises later.

· The concept of small attainable steps was a lesson that many had learnt hard.

· Not well understood was the 'rule of 72' – that if farm working expenses increase by about 3 per cent per year then they would double in 24 years. If the increase was 4.5 per cent then they would double in 16 years.

· All had found that the financial road up and the financial road down was the same road.

· Two couples had financed two large weddings and were tackled shortly afterwards to assist with house deposits.

· Some farmers found that following through soundly on their first farm term loan with their bank paid off when the tide later turned against them.

· On occasion, they had not read the fine print well enough with their hire purchase contracts and guarantee type agreements.

· Quite a few farmers were surprised at the suggestion that 28 teenagers would die before they reached 65. However a local nurse who was a farmer's wife confirmed the statistic, but felt the number was lower than 20 years earlier.

· A farmer made the point that getting into the group of 13 farmers that were reasonably well off at 65 would give them another 30 years of dignity.

· When it came to weighing up the risk and income from investing sometimes the choice came down to whether they wanted to eat well or sleep well.

· They believed that good advice should be judged by results not by intentions.

· Many felt that money in their wallet or bank account seemed to vanish unbelievably quickly.

· Most felt the key to success in almost everything was discipline and without it in farming all sorts of problems would arise.

· Farmers felt that they should never compare themselves with others, but should learn particularly from the top quartile.

· Several of them felt that owning about two-thirds of their farm area and leasing the other third long term  would probably have been a better structure than the long haul required to get to full ownership – but long term farm land leases were few and far between.

· They learned that gaining knowledge in farming could be costly and paying for expensive top advice could still be cost effective.

· They had come to realise that it paid to be a born optimist with farming.

· At the time of the meeting wool and lamb income was struggling. The comment was made that agricultural commodities had always moved up and down but good commodities never went bust.

It was agreed though that making better use of the odd good year to cope with regular poorer years required farm management that was almost an art form.

Pita Alexander is an accountancy and agribusiness advisor at Alexanders.