Tag Archives: Dallas Mount

Young Ranchers Meet in Wyoming!

Ranch Management Consultants, with an acknowledged huge amount of other support, hosted 48 youth from 17 states in Sheridan, Wyoming for 4 days!  If even half those become true ranchers and not serfs on the land, the livestock industry will be in good shape.  However, given the financial/investment outlook in our country, none (unless they are already incredibly wealth) will be able to build a legacy.  Our economy has been moving in this direction for years, but is now accelerating into something unrecognizable.  Too bad.

young ranchersLast week, in partnership with Wally Olson and the Plank Stewardship Initiative, we hosted the first ever Young Adult Ranching for Profit Workshop. We had 48 youth from 17 states in Sheridan, Wyoming for an incredible four days! The energy, enthusiasm, and passion these young people have for ranching and agriculture was contagious. Several times during the week the instructors and I caught ourselves in awe of the group that was assembled. Just thinking of the amazing things they will accomplish, gets us excited for the future. The format of the days involved morning discussions on topics ranging from economics, grazing, to succession. Then we grabbed a sack lunch and headed for the ranch tour that made up the afternoon. We were able to visit three amazing and welcoming ranches where at each stop, we found hands-on activities and intense discussions with management. The workshop ended with participants having small group meetings where they offered peer advice and developed action plans for moving forward. This multi-day workshop wasn’t something we at RMC could do alone. Enormous thanks goes out to the partners, instructors, and hosting ranches. We anticipate making the Young Adult Ranching for Profit Workshop an annual event.

One thing that became clear to me was that these young people are eager to take on additional responsibility and assume a more prominent role in the businesses they are involved with. It is easy for Junior to say “get out the way…. I’m ready to run this!” but it is significantly more difficult for the seasoned manager with battle scars of past mistakes, to know when and how much control to relinquish. At the Ranching for Profit School, we teach the importance of developing clear expectations for each position in your operation. Stephen Covey in the 7 Habits of Highly Effective People expands on that with the DR GRAC acronym of Desired Results, Guidelines, Accountability, and Consequences as a thorough way to delegate important tasks. If Junior is going to take over the grazing planning what are the results and specific targets we need to achieve? It should be written down how and when we are going to measure these. Targets for the grazing manager might be:

  • Every pasture has a monitoring transect by 2022-monitoring report due Nov 1
  • 75% cover by perennial plants- monitoring report due Nov 1
  • Decreasing bare ground- monitoring report due Nov 1
  • SDA/1” precip reported monthly- Monthly WOTB meeting
  • Target rest periods achieved 90% of the time- Grazing Plan reviewed Dec 1

If Junior wants more responsibility, then management should identify where the business is currently failing to produce the desired results. From there you can develop a shared understanding of what a quality result for the business would look like. Junior might need some support on how to be successful in creating these desired results. Maybe there is a neighbor that has this figured out, that Junior can talk with or perhaps there is a class or training on the subject that they can attend. Writing down the guidelines and deadlines for this task on a flip chart and taking a picture of it will help everyone remember the agreements next time the subject comes up.

I don’t buy it when I hear that no young people want to be involved in agriculture. After spending four days with 48 youngsters pulling at the bit, ready for a shot, you wouldn’t either. Those of us in the leadership roles need to create opportunities for them to develop themselves into the people they can become.

One Response to “The Next Generation of Passionate Ranchers”

June 10, 2020 at 2:58 pmMark Hollenbeck said:

You are going to be challenged to meet the demand for this school. There is just nothing for young people that want something real dealing with ranching.

When Assets Become Liabilities

 

When Assets Become Liabilities

 

by Dave Pratt

Look up the definition of asset in Webster and it’ll tell you an asset is “anything owned that has value.” But Webster has it wrong.  If I put a down payment on a ranch, financing the balance, the full value of the land shows up in the asset column of my balance sheet, but I don’t own the whole ranch. The bank probably owns more of it than I do. No, an asset isn’t necessarily something you own. An asset is something you have. Your net worth (Assets-Liabilities) is what you actually own.

Although your banker would disagree, there is a completely different way to define assets. In his best seller, Rich Dad, Poor Dad, Robert Kiyosaki defines assets as “things that put money in your pocket” and liabilities as “things that take money out of your pocket.” Between monthly principle payments, interest, insurance, maintenance and repairs, most of the things your banker calls assets are, according to Kiyosaki, really liabilities.

Ironically, the fancy cars and homes that we see as the trappings of wealth are actually huge constraints to generating wealth. That doesn’t mean we can’t enjoy the finer things in life, but until we build a wealth generating machine as our foundation, buying “liabilities” will slow, and may block, our ability to create wealth.

There is an even bigger problem with assets.

In the final chapter of his wonderful book, Nourishment, Fred Provenza writes about taking a sabbatical to Australia with his family. To finance the trip he needed to sell their home in Utah. He explains that he didn’t build the house himself, but had done a lot of work on it and had “a lot of skin in the game.” Unfortunately, at the time of the sale the housing market was very depressed and, while they got their investment back, they didn’t get much more. Between the time of the sale and their trip to Australia, they rented a smaller house Fred called “the dump.” At first he was resentful of having to give up owning his “castle.” But after a couple of weeks in the dump he began to realize that he hadn’t owned the house he’d helped build. He explained,  “It owned me.” It owned him financially, requiring huge monthly payments. Even after the sale, it owned him emotionally.

Assets can clutter our space and minds, causing distractions and stress. They make it more difficult to clean and organize. They tie us down. The biggest constraint to moving for some of us is the burden of taking all of our stuff with us.

The things we own trap us. I recently had lunch with a couple who’d been ranching for about 10 years. They both worked off-farm to make ends meet. Over the last several years they’d bought a small place, secured several leases, and built up a herd of a couple hundred cows. But now, with a young family, significant debt and the off-farm jobs, they seemed stuck.

After subtracting the liabilities from their “assets” their net worth came to $1,300,000. On the back of a napkin I wrote them a “check” for $1.3 million and asked them, “If you had nothing but this check and the clothes on your back, and still wanted to achieve your dream, would you use this money to recreate the situation you are in? If not, how would you deploy this money to accelerate progress toward your dream?”

Their expression changed almost immediately. While they’d made progress over the last 10 years, the business they created was going to make it difficult if not impossible to achieve their dream.  Rather than a stepping stone, their operation had become an obstacle to further progress. They set out to use the wealth they’d created to change their course.

I went through the identical exercise with another couple whose net worth was closer to $3 million. When I asked if they would recreate the situation they were in, they immediately and in unison said, “No.” But, when I met with them again a year later, they hadn’t changed anything and resigned themselves to “staying the course.” Rather than using the assets they owned to create the lives they dreamed of, they were owned by their assets, which they used as an excuse to stay stuck. Chuck Palahniuk, author of Fight Club, described it perfectly when he wrote, “The things you own end up owning you. It’s only after you lose everything that you’re free to do anything.”

Listen to New England Executive Link member, Pat McNiff, explain the cost of keeping assets and the process they used to determine what they needed to keep and what to discard or sell.

4 Responses to “When Assets Become Liabilities”

March 27, 2019 at 2:31 amjames coffelt said:

I believe a personal financial statement is the best tool to measure wealth creation. It considers cattle and land appreciation. Update it twice per year, every bank has one. We measure the wealth creation relative to equity. We further measure the wealth creation against the 8% we can average in the stock market, passively.

Reply

March 27, 2019 at 10:11 am, Roger Ingram said:

Excellent article and video. Should be required reading and viewing for all chapters!

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March 28, 2019 at 1:48 pm, Keith said:

Good article, wouldn’t mind to be receiving such every now and then

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March 28, 2019 at 2:03 pm, Richard Smart said:

Please remember to deduct the tax man’s share when calculating what liquidating your assets will yield.

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