If You Don’t Have a Financial Plan… You Still Have a Plan.
19 Jun 2017
I really like a quote I read last week from Alexa Von Tobel, “If you don’t have a financial plan, you still have a plan, it’s just not a very good one.” Alexa is the creator of one of the most popular financial planning software systems in the world, Learnvest.
This quote reminds me of when we have an attorney as a guest on our WMT 600AM radio show and we get to hear what I call “local stories of not-very good financial planning.” By trying to learn from other people’s poor planning, we can teach our listeners how to avoid these mistakes.
So what’s the latest story of poor planning? Late farm loan payments. The attorneys are telling us that the amount of late farm loan payments (or serious delinquencies), have sky-rocketed in the last 2 years. The June 26, 2016 article by Russell Hubbard of the World Herald, Past Due Loan Payments Increasing for Midwest Farmers reads,
“There is trouble brewing in farm country. A World-Herald analysis of farm loan repayment trends in Nebraska, Iowa and Kansas shows a disturbing tale: a sharp increase in loans 30 to 89 days past due. Farmer’s and farm communities enjoyed record-high prices for grain in 2012; corn went for as high as around $8.30 a bushel. The news hasn’t been so good since then, with corn prices plummeting by more than half between August 2012 and January 2016.”
So what financial plan did some farmers have for $8/bushel corn in 2012? I’m not sure, but it looks like it didn’t involve paying down their debts. Was this a very good ‘plan’?