11 Wealth-Building Mistakes Farmers Make (And How to Fix Them)
Here are 11 common wealth-building mistakes I see good farmers make.
Keeping Extra Business Cash in Checking Account
A business account can get flush at times and keeping your cash in a checking account yields next to nothing. High-yield accounts pay over 4%.
Fix it: Establish a fixed amount to hold in checking, open a HYSA, and put the extra cash into it.Overpaying for Insurance
If you have not reviewed your policies in the last few years, you may be overpaying and under-insured.
Fix it: Shop your policies every couple years and compare.Leaving Retirement Accounts in Cash
Contributing to an IRA is great—unless you never invest the money. Review your account holdings and don’t assume your “investment advisor” invests the cash for you.
Fix it: Pick a simple index fund and invest.Not Optimizing Credit Card Usage
Common credit card errors:mixing personal and business spending
carrying a balance month-to-month
not using the right rewards card
Paying extra fees on credit card purchases that negate the benefits of rewards
Fix it: Get a business-only card. Pay it off monthly. Track rewards.
Not Maintaining an Emergency Fund
It’s tempting to run lean and skip the rainy day fund in the name of accelerating your business growth. That can leave you vulnerable to liability and cash flow problems; in turn, you may have to pull from investments at the worst possible time.
Fix it: Build to 3–6 months of essential expenses.Expecting Your Tax Preparer To Do Strategy
The job of your tax preparer is to file your returns from a complete set of books. If you’re focused on strategy in February, it should be for the upcoming year.
Fix it: Work with someone who does tax planning and knows your complete financial picture.Under-Pricing Your Products
Are you a price taker? Are you setting your prices on guesswork or even guilt? If you are a direct-market farm, setting your prices is one area you have real control.
Fix it: Know your financial goals (not just your costs of production). Charge accordingly. You’re worth it.Focusing on Things You Can’t Control
Yes, there is a staggering amount of stuff outside your control. That realization should provide good motivation to laser focus on what you can control.
Fix it: Make a list of what you can control and rank that list by importance. You’ll build real resilience, get a business boost, and have the proper mindset for success.Do-It-Yourself Bookkeeping
You know it’s time to hire a bookkeeper when you are…Falling behind on record-keeping
Expecting your spouse to do it
Keeping a chart of accounts that doesn’t match your business
Operating as a corporation or partnership
Leaving the dirty work to your tax preparer
Running a real business!
Fix it: Hire a qualified bookkeeper who can keep your books straight and help you understand your business better.
Not Using the Right Retirement Account(s)
Knowing which personal and business retirement account is right for you can lead to thousands in tax savings.
Fix it: Talk to a financial planner who knows when to use pre-tax and after-tax accounts. And knows the benefits and drawbacks of SEPs, SIMPLE IRAs and solo/401(k)s. Make smart tax moves. Build lasting wealth.Having a Scarcity Mindset
If you’ve ever started a project to save money and halfway through thought, “Why am I even doing this?”—trust that instinct. Learning when to spend is part of growing. And when you’re spending to grow? That’s not just an expense. That’s an investment in your success.
Fix it: Shift to an abundance mindset. Do what you do best and delegate the other stuff.
A successful purpose-driven business requires a lot more than hard work. It takes fixing some key money-draining mistakes. We can help you organize, plan, and build wealth without selling out. Reach out today to get started.
