Free Wealth Management Guide Investing Proceeds From the Sale of Farm or Ranch | Page 9

through stocks and real estate to make their money last
and keep up with inflation but emotionally it is scary to
hold onto these investments when they experience losses.
The idea behind the bucket strategy is that it can help
you mentally separate your investments into two groups.
It gives you the confidence of having stable income from
bucket one while having investments that will help outpace inflation in bucket two. By segregating your money,
it may help you tolerate volatility in bucket two.
For more information, request Wealth Guide titled: Retirement Income Planning for the Agricultural Family.

Hiring an Advisor
You can invest in many investments today on your own
and avoid paying the fees of an investment advisor. This
may or may not be a smart thing to do. Besides saving
you time, a good investment advisor should be able to
help you achieve better performance over time net of all
fees. They can help you establish and maintain the right
asset allocation, provide access to investment products
that are unavailable to the general public, and help you
develop and stick to a sound investment plan. In addition,
a good advisor will provide value through advice on a
variety of financial related topics.
Selecting an Advisor
Choosing the right advisor is critical. You and your families financial security depends on the guidance your
advisor(s) provide, so choose wisely. Unfortunately, many
“advisors” selling investment products today are concerned about their own interests more than those of their
clients. In addition, many only sell investments and have
insufficient knowledge and experience in tax, retirement
and estate planning.
Some guidelines for selecting an advisor are:
1. The advisor is independent. Large investment firms
have inventories of products and quotas to meet as well
as company sponsored incentive programs. Being truly
independent helps avoid these conflicts of interest.

2. The advisor uses a fee-only or fee-based compensation structure. Advisors who are paid commissions on
the products they sell and/or on the trades they place
face a conflict of interest. They may be influenced to sell

products that pay higher commissions or place excessive trades in an account. Using true no-load funds and
charging a separate investment advisory fee can help
better align your advisor’s interests with yours.
3. Uses low-cost investment products. Just because an
advisor is fee-based doesn’t mean the fees on the products they sell aren’t high. You should work with advisors
who offer low-cost solutions.

4. The advisor uses a consultative process. They take
a comprehensive, planned approach to managing your
wealth versus just selling you a product.
5. Uses a team approach. A good advisor will collaborate
with a team of other professional advisors such as: CPA,
attorney, charitable giving specialist, insurance specialist, 1031 Exchange intermediary and real estate agent.
6. The advisor has many years of experience, is trustworthy and is someone you get along well with.

Conclusion
The tax planning and investment decisions you make
when selling your farm or ranch will affect the quality
of life you and your heirs enjoy. You owe it to yourself to
make wise decisions with the wealth you and your family
worked so hard to create. By working with the right team
of advisors prior to selling your farm or ranch, you can
develop a comprehensive wealth management plan that
enables you to save tax on the sale and invest in a manner that will give you a high probability of achieving your
financial goals.
A 1031 Exchange and Charitable Remainder Trust are
powerful tools for saving taxes on the sale of a farm or
ranch. Using one or a combination of these tools may allow you to preserve your wealth and invest more money
for retirement income and other purposes.
Assessing your investment goals, risk tolerance, time
horizon for investing, liquidity needs and account ownership decisions all play a part in developing an effective
investment plan.
Emotions greatly impact the decisions many investors
make. Decisions based on emotion tend to hurt you more
than they do help you. Developing a sound investment

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