The Farmers Club

The “Club Notes” for Saturday, the 22nd of June, 2024.

By Dwain Duxson

The power of Compounding

The great American businessman Warren Buffett is an advocate of it, and if you are a Farmer who owns Land you will also be enjoying it as well. With the price of Land going through the roof, Farmers are neck deep in a Farm wealth creation period like no other. Arguably there has been no better compounder than Farm Land just recently. And you know what? Land is a great compounder because it's not as liquid and as easy to trade as, say, Shares, Cash or residential Property. Especially if you're a family operation that has the next generation in mind, there is no way you are going to sell. But that can lead to problems as well, with most of the family wealth being tied up in the Land means that generations might not be able to realise the true worth unless they sell. I know many Farmers in my old Farming districts who would have 10, 20, 30 million or more in Land. Acre prices that were $400 30 years ago are now set at $5000, $6000, and even got up to $7000. I know of Farming people who have used compounding in their share portfolios by perhaps being gifted or buying quality shares that pay good dividends, making sure those dividends are reinvested. Many poeple have turned not much into a lot over time. Compounding and time are a great combination. When have you used the power of compounding to your advantage?  Reply to [email protected]

The Farmers Club - For the curious ones

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