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Pensions and external Farm Investment.

  • 22-01-2017 12:39pm
    #1
    Bass Reeves
    Registered Users, Registered Users 2 Posts: 19,586 ✭✭✭✭


    Do we keep too munch money in on -farm investment. We all complain about too low returns from farming. However are we too fast to consider farm expansion or production expansion Iinvestment when maybe we should look outside the farm for investment.

    The other issue's with farm investment is the inability to extract the return/profit from the business or to draw it down at retirement. At present a lot of semi-retired farmers are using BPS/GLAS/DA as well as leasing payments to fund there retirement. However these payments will be reduced over next 5-10 years and as well we need to look at the fact that we will have longer retirement.

    Pension investment is very tax efficient if you are in the high tax bracket. While we all hear about horror stories about pension Investments some of these are related to specialist high return vehicle or downright corruption . In general there are some larger inestment funds that achieve moderate returns in the short term if you want a gaurantee because you are only going to be investing for sub 10 years. Or if you are investing for 20+ then you can accept more risk and expect a higher return over this period and derisk as you get closer to retirement.

    Other than pensions, you have property investment whether in the form of investing in commercial or domestic rental section. Some also have the option of property development as they may as either an outside farm with house and older type sheds or may have an old style large farm house or yard. In this situation you could look at long-term rental, holiday rental or Airbnb type rental. There is also the option to invest in maybe a secure lock up for tradespeople or office type rental maybe even.

    After that you have external business investment whether it is in the form a small self operated business or an online trading operation. Then you have stocks and shares or you can leave the money in the bank.

    Slava Ukrainii



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