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Tuesday, February 4, 2014

Make Your Money Work for You!

In the 1950s, an old time Powder River County rancher told his son, “It’s the good years that’ll break you, not the bad ones.” If that advice was sound then, it might be good advice today as well. And with historically high cattle prices, times are good right now for a lot of ranches and ag related businesses. That may mean that rather than having to go to the banker for an operating loan, there is cash sitting in the bank. For many, that’s a rare, or even new, experience.

Learning how to handle a surplus of money can be more difficult, but just as important as picking herd bulls, replacement heifers or knowing when the hay is cured enough to bale. And when you’re spending all your time with the herd bulls, replacement heifers and hay bales, when do you find time to study fiscal management?  Something that might help you find the time is hearing that investing and learning about it can be fun.

One of the things to remember is that your money should work as hard for you as you worked to earn it. It works for you through appreciation, dividends and/or interest earning. Widely known and used, there are times when savings accounts and Certificates of Deposit (CD’s) pay a decent return…and there are times when they don’t. Other options include, but aren’t limited to, investing in a money market, mutual funds, stocks, bonds and annuities.

Just as you talk to your machinery dealer, bull breeder, extension agent, weed specialist or any other resource when you need advice in those areas, financial consultants can help you decide how to make your money work for you. Your choice of the right method, or methods, of investing means balancing risk with reward in the proportion that suits you. The job of a financial consultant is to educate you on the investment products available and the risk associated with each. And if the first adviser you go to doesn’t explain things so you understand them (because they are understandable), make it interesting and make it fun, keep looking until you find one that does.

This up market may not end this year, or even next year but if we can learn anything from history, it will end. Now is a great time to learn about investing and put your hard earned dollars to work for you so you will have a long term rather than short term surplus of cash.

Remember that Gardner & Billing, CPAs are a resource for explaining types of investments and the consequences of owning them, but investment advice should come from the financial adviser of your choice.