We’re completely debt-free with a fully funded emergency fund, and we have $350,000 sitting in the bank from a land sale a couple of months ago. My wife and I would like to buy a chicken farm with two houses and upgrade it to contract standards. This — plus the stock — would cost around $290,000. I would keep my regular job, and my wife would run the farm. An investor friend of mine said I should finance the entire business purchase. What do you think about this scenario?
— Darryl
Dear Darryl,
Either do the deal with cash or don’t do it at all. Your investor friend is full of crap, and there’s a good chance he doesn’t have nearly as much money as you do. He’s probably got more bad opinions than dollars.
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Now, the pro formas on the kind of thing you’re talking about are incredible. They can make a ton of money, but they’re a lot of work — I mean real, hard work. Some are more high-tech than others and that can mean a little less work, but someone’s got to be out there every day with their hands on this thing or you’re going to be in trouble. I don’t know the ideas you have for divvying up the work, but I’m afraid it would just be too much for one and a half people.
I don’t mind you doing the deal, as long as you pay cash for it. But if you’re looking to invest, there’s always real estate — it seems like you’ve done pretty good there — or maybe another small business idea. Whatever you do, you need to stop listening to your friend about borrowing money. You’re liable to turn what was a blessing into a curse if the two of you borrow money on a chicken farm.
— Dave
