It’s Not Just About the Business: Why Tax Planning and Investing Matter
If you’re a farm or food business owner, you get a lot of attention from service providers about your business — marketing, bookkeeping, enterprise production. You’ve been encouraged to track margins, monitor business health metrics, and hit benchmark targets. And for good reason. All that stuff matters. You need to plan for profit and bring in enough revenue to cover expenses, pay yourself, and grow over time.
But here’s the truth: focusing only on your business isn’t enough.
Long-term financial success depends on three things:
What you make (your income)
What you keep (especially what you save on taxes)
How it grows (through smart investing)
If all your energy goes into business performance, you’re only working one-third of the financial equation. Tax strategy and intelligent investing deserve just as much attention if you want long-term financial resilience.
1. What You Make: Profit Alone Doesn’t Get You There
Most farm business advisors focus on profitability. But profit is just the beginning.
You can bring in $200,000 a year and still struggle to build wealth if it all disappears to taxes, tractors, and trucks. Practically everyone struggles with lifestyle inflation — even if lifestyle inflation just looks like a new John Deere. Long-term goals like retirement, buying land, or taking time off don’t just depend on how much you earn—they depend on how much you keep and how you grow it.
A profitable business is necessary, but it’s just the starting point for financial success.
2. What You Keep: Tax Planning
Taxes are one of your biggest annual expenses. But most farmers and small business owners don’t take full advantage of tax planning—especially during years when income is lower.
That’s actually when planning matters most.
Low-profit or transition years are the perfect time to:
Manage income to unlock tax credits and deductions
Perform Roth conversions
Do tax gain harvesting
Pre-pay expenses before a higher income year
And tax structure matters, too. A farm switching to an S-Corporation structure and paying a reasonable salary could reduce self-employment taxes substantially—keeping more money in the business owner's pocket without changing anything about their sales or pricing.
A few smart moves each year—especially during lower-income years—can save thousands and make a visible difference in your net worth statement.
What you keep is what fuels your long-term goals.
3. How It Grows: Investing Turns Income Into Independence
Once you’ve earned it, and kept more of it, the next question is: how do you make it grow?
Investing is the path to financial resilience, independence, and optionality. Unlike farm income, which requires constant labor (and management of labor), investments can work while you rest, take care of your family, or scale back as you age.
Even small contributions to a retirement account, made consistently, can snowball over time. And the earlier you start, the more powerful that compounding becomes.
Let’s say you invest $6,000 per year starting at age 30, and stop at age 60. With a 7% average return, you’d have about $600,000 by retirement. Wait until 45 to start? You’d only have around $200,000.
Those dollars don’t just mean a comfortable retirement—they mean options. The ability to ease into succession planning. To mentor the next generation. To choose what comes next.
All Three Work Together
To reach your financial goals, you need a plan that connects:
Business income
Tax strategy
Investment growth
Most advisors help with one or two of those. Few help you link all three.
That’s where the opportunity lies.
Don’t let your hard work go to waste. We’re here to help you thrive—reach out today.
