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As you may have noticed, I opened up a Substack account. This makes it easier for me to send smaller, but more frequent content.
Substack messages will be focused more on life lessons and my day-to-day activity, connecting everything back to farm and finance.
If you don't want this more frequent content. Feel free to unsubscribe through a Substack email, you will still be able to get my weekly newsletter.
Substack - A new economic engine for culture and my handle is @farm640
SW Financial Literacy
Stacking Gains
Accelerate Growth
Habit stacking has been a popular and well known thought in many books around habits. I learned about it in particular through James Clear’s book, Atomic Habits.
The concept here is that you attach a new habit you’re trying to pick up with an existing habit that you already have in place.
For example, my kids and I wanted to get in the habit of taking our daily morning vitamins. I never miss drinking my coffee in the morning, which has become a habit and ritual by itself. Therefore, I placed the family’s daily vitamins in front of my coffee capsules so that we never miss a day of vitamins. New habit locked in.
There is another way for stacking gains on top of each other.
Brandon Turner, who is a podcast host, author, and helps raise money for investment funds, likes to use the deal stack. This is when you purchase:
single-family investment property in year one
duplex in year two
four-plex in year three
eight-unit apartment complex in year four
Continue
The genius behind this approach is that most people aren’t ready to take on an eight-unit apartment as their first investment property. Start small and as your abilities grow, you gain the confidence and expertise needed to excel with the bigger properties.
I am in the middle of doing an acre stack.
When I bought my first farm, my financial position could not afford to go out and buy a quarter of ground.
Instead, I found a 68 acre property, of which only 41 acres were farmable and the rest was waste. We were able to build that property up to 47 acres farmable and 1031 exchange for a nice profit within two years.
We then moved into a 112 acre property. With the gains from the 1031, our financial position was strong enough to take on this larger investment. There were no wasted acres on this farm, even though it was further away from headquarters and not quite as easy to farm as the property is broken up.
Fast forward to the present, and our financial position has been taken a leap. We’ve spent the last month preparing to buy a full 160 acres via land auction. There will be sweat equity needed but once the work is completed, I hope to have that full clean, farmable quarter that I was looking for just a few years back.
If I waited for my financial position to be strong enough to buy the quarter, I wouldn’t have been able to use the debt pay-down and sweat equity to grow as fast as I have. Stacking into larger properties as you grow your expertise and finances does work, just like goal stacking.
Need help with your operation's financials?
Have you updated your financial statements for the year?
Did you complete a review of your position with your lender?
If not, this is a dangerous step to skip. How will you know if you are in a position to buy ground (and how much ground) without getting a lender's feedback? How can you learn anything new without a review?
If you missed this crucial step during your renewal appointment, there is still time. I've opened up 30-minute financial review consultations helping you:
Update your balance sheet for the year if not yet completed.
Give feedback on the strengths and weaknesses of your position.
Help you plan for growth.
Sign-up here if my services can benefit your operation:
Also, I want to continue bringing you the resources to help you grow while in a healthy financial position. If you ever have an interest in the Farm Buying Toolbox, sign-up here:
I can’t wait to be in touch and start helping you toward your goals.
Have a great week!
Grant
