Does anyone have experience with the strategy of Farming Without the Bank?

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The Infinite Banking Concept and Farming Without The Bank are interesting concepts.

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Have not used a bank for at least 20 years except to buy a piece of equipment once in a while.  Spent several years filling out paper work for operating loan and paying $500 a year and never use it.
Although i thought we might have to this last year but didn't need too thank goodness.

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I should also mention there are lots of guys in our area that run million dollar plus operations without a bank.

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Read the book and listen to her podcast.   Amazing strategies and finance tips.

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I'm on my 6th year of farming on my own renting 100% of land and buildings and I haven't found a bank or Farm Credit within 200 miles that will back me to buy the homestead I need to continue, one being at least 50 miles from a big Metro (currently 22 miles from Downtown Minneapolis my county seat) so I have 2 outside cash streams of Welding(most profitable) and Trucking. I've read the Farming without the bank book and had a conversation and watched videos with ********** but all Base on you have the option to buy the family farm at farmland price not commercial industrial land price. When your moving 50+ miles and have very limited connection its difficult to get a offer accepted had 3 nice farms got sold for $52k-150k less than my offer because the seller knew the other buyer better than me. Honestly these jokers are making money off less educated when the success rate of their idea is much lower than advertised. The last 100 years so many regulations have come in to play if previous generations didn't make a succession plan your going to be behind.

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It is in my opinion unrealistic to farm without a lender or banker. we started out in 1990 and developed strong open and honest relationship with our lenders,backed up by excellent accurate financial statements. we have used our credit to maintain operations and keep accounts current when production or prices were poor.more importantly as our farm grew we new we had our lender behind us if we came across a deal on land or equipment. Also we typically buy crop inputs early often earning a 10% or more ROI . I am amazed at the number of farmers who think they got a deal by having their seed or chemical financed at for example 2% by there retailer,seed or equipment dealer. In most cases  the products could have been bought 10% cheaper by taking (or negotiating a cash discount) do the 3rd grade math figure out the best deal at least if you have a lender you have a choice.

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I think there can be ways to farm without a banker.  From experience with paying high interest rates in the 1980s, it takes a lot of work just servicing small debts.  But,  the key to debt management is to use it as a tool and only for things that have a high enough return to service the debt plus a reasonable return to labor and management.  Raising commodities only is always going to net over time low margins so figure out enterprises that sell some sort of specialized product or service.  That way you can get paid at a high enough rate and make money for your family as opposed to working for all your suppliers.

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I would rather struggle with a bank than without.  An opportunity will eventually lend itself and if you have no lender backing, it would be a struggle on short notice to get funding.

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Read ***********’s book “becoming your own banker”. The concept can take awhile to grasp, but it’s a great one. It’s not something that is going to just happen over night. It’s a concept that has been around longer than the federal reserve.

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Read the book and study concept. I am using it not only for my self, but future generations. Don’t just read her book, but others in reading list before you decide.

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Yes I started 8 yrs ago started by buying cows then bought 130 ac of land for great price cows paid off land 7 yrs had another farmer farming 30ac of that 130 for 2 years then I took over have been farming for 3 now I did borrow 50000 to buy tractor pd that off I bought another tractor and nw combine 1st year of farming debt free and equipment total for all equip was 15000 debt free after 3 year I'm final making some money it's slow process without debt but well worth it I now farm 70ac trying get more I also owned another profitable business same time which pd households bills

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Read ****’s book…read ******’s book.  It makes sense.

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The author, *************, provides free preliminary conversations to explain the strategy and applications. She utilizes properly structured whole life insurance policies as the foundation. I found a local financial advisor to get me started. First year seemed to be financially strained, second year gained confidence as I took a loan against paid up additions which retain 3-10% interest on paper. Its an investment with access to asset unlike stocks with market risk and tax on gains. Make the call.

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We also farm without a bank. We run about a $2 million a year operation. My father and I work more than a man should have to, and our equipment is not new but we get the job done.

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Well, this post got me doing the research. I listened to different podcasts about Infinite Banking, read her book, and watched some Youtube vids.

I think I would describe Farming without the Bank/ IBC with whole life insurance as a high yield savings account that you can take out a loan against, with a death benefit. Definitely something that would take a few years to get up and going, but doable. I'm impressed with the potential to grow generational wealth if managed correctly. And I love the idea of paying the interest to myself instead of loosing it to the bank.

I'm waiting for my brother to read the book before scheduling a call with *******. We are fairly young and just beginning to really grow our operation and I think now is the time to start rather than waiting another 10 years.

Thanks for the idea seed to get me going!

Any suggestions or advice from those that have been doing this on starting up? Anything you'd do different?

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There seems to be a mix of concepts in this discussion. Literally farming without bank (ie. debt free farming), and the Infinite Banking Concept (the book called Farming without the Bank, and ******’s book).

Actually, and correct me if I’m wrong, but it seems more people’s here have just focused on getting out of debt, so that they don’t need the bank. Most of the comments on here about IBC just seem to say, read the book, it makes sense. Is there anyone who can give a real world example of their operation that is using The Infinite Banking Concept and how it has actually benefited them and helped them to get ahead? I have read the book, listened to the podcast occasionally and like the concept, it just all seems to good to be true, which you know what Grandma says about that!

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We are now a year into a policy. Here's how's it has gone for us so far:

As younger farmers we took out a policy on our dad. Hopefully we'll get one on our mom soon too. Right now the LLC has term policies out on each of us members just in case something happens and spouses need to be bought out or people need to be hired, other expenses, etc.

For the Dividend paying Whole Life with PUA Rider you only "need" to pay in the premium for the death benefit. The PUA rider allows you to put more in to grow cash value. Yes it takes 5-7 years for total premiums to equal cash value. But something like 70% was available to withdraw right away. After starting, we pulled out most of the cash value for an equipment purchase. Yes it is a "loan" against the policy.

Interest paid on the loan does not go towards cash value, but the cash value continues to grow. Like taking out a loan against stocks (or a commodity), the "stocks" are still there. They can continue to go up because they are still in the system. But, since it grows at a guaranteed rate it won't go down like something in the stock market would.

AND the interest on the loan is also tax deductible as a business expense. No payback timeline on the loan as long as you keep up interest payments. Interest was a bit higher than a normal equipment loan, but it could be cash flowed easier without a set payback time. It would be great for buying cattle or something with a long payback time.

Our end goal is to potentially use it as an operating LOC. Right now the interest on the whole life is about the same as an operating loan at the bank, but if interest rates rise, especially into the double digits, the whole life will be cheaper. And we won't have to justify to a bank what our operating needs are.

It's a useful tool, but it does take thought and management. Lots of good info out there, but also LOTS of harmful insurance sellers out there too.

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We haven't had a lender in  20+ years. Been cash flowing it and only buy equipment upgrades when funds allow it.  Farm 2500 acres,  we may be using 5+ year old equipment but gets the job done. Seems to be the guys with the brad new stuff owe more then their worth.

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Really the only downside is that it takes 5-7 years for your cash value life insurance policy to be with what you have paid in.

The principles are sound, but the insurance company has to make money too. If you could become an insurance agent and sell yourself a good policy (not all policies/companies work well for this purpose) and get the commission, this is a no-brainer.

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My dad's family was ready to sell out and move but dad really wanted a shot at reviving the failing business and convinced them to give him a shot. This was not an easy task because of previous debts, outlandish interest rates and providing for a young family. He hated paying 18% to the bank and decided he needed to be his own bank in order to survive. It is definitely a process and requires fiscal discipline. But after 10-15 years he had accomplished the task. Debts were paid off. The bank was no longer necessary and he could slowly improve the equipment line. He also worked out a plan to buy out his dad's remaining portion of the business. 
I had worked for the family farm for about 6 years, trying to get my own start, when my dad passed away. I decided to go full time on family business to ensure its continuity. Let me just say that we would not be where we are now if he had not made the sacrifices early on to cut out the mental and financial stress of the bank. Some years we wouldnt have been able to pay the interest had we needed the bank.

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Does anyone have experience with the strategy of Farming Without the Bank?

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