I Was Wrong About Diversification | Mistake Many Farmers & Ranchers Make (Ep. 358)

You know, the old question, do I farm and ranch or do I just farm or ranch?
Because if we're going to be calving in May and planting in May,
are we actually paying attention to our crops like we should or our cattle like we should?
Are we losing cattle because we're in the field?
Are we not growing a great crop because we're calving?
Because we didn't get planted on time?
I don't know the answer to that question.
I have no idea.
But we have to ask, which lane are we choosing?
Hello, hello, hello, and welcome back to the podcast.
Thank you very much for being here.
Today, I want to talk about something that has come up four times just last week.
And so when things come up repeatedly for me, I think, well, it's probably time to do a podcast on it
because everybody's got the same questions.
And that is diversity, diversification.
People are asking, Mary Jo, do I diversify into real estate?
Do we flip houses?
Do we start another business?
What do we do?
And ironically, this is people that have money from cattle sales.
And so I know the great old Internet out there is going to hear a clip of this and they're going to lose their ever loving mind because people are making money.
But, you know, you can either be on the side of making money or you can be on the side of not making money and complaining about it and not asking how the other side is doing it.
Disruptions get you in trouble.
Anywho, so we've got some people that have an influx of cash or they're trying to expand within the industry that they're in.
And maybe they don't have enough cash to expand in that industry.
Or they're just saying, hey, Mary Jo, we have everything wrapped up in agriculture.
Should we be diversifying into something else?
So, you guys, here's the thing I've learned over the years is I don't know everything.
I don't always have the right answer.
But I'm happy to give you my thoughts.
And these are just my thoughts.
Okay.
Here's what I've done.
I personally have diversified, right?
I have this business where I'm teaching you infinite banking.
Let's just call it the without the bank business.
So I've got this business that I'm teaching infinite banking.
And then I've had long-term rentals, short-term rentals.
I've had other businesses.
When I first started this business, I had a little chocolate candy business that I was doing.
And I was making candies and doing this on the side.
Trying to make this full-time, but the chocolate candy business was pretty busy.
And then I, well, I was doing other things.
I've always kind of had my fingers in multiple things.
But here's what I've learned as of late.
Is that if you have one business that is successful, you have one avenue that you really know and
understand, you may want to just stick to that avenue and maybe expand within the avenue.
But why completely change lanes?
When you completely change lanes and start going a different direction, you're having to learn that new direction.
You don't know what the road looks like.
We're having to pivot and learn all of this other stuff, which takes our time and energy away from what we do know that's making money.
Now, there's a caveat to this.
So hold on.
But I just want to tell you what's happened to me and the way I've done it.
As soon as I go to real estate long-term rentals, I'm having to renovate a property.
It doesn't matter what property I've purchased.
I'm having to renovate that property.
That is costing me money on the infinite banking side of things because now this business is not getting the attention that it needs.
And I have people over here that are helping run it.
Right.
I have amazing staff.
I have amazing agents like John.
And everything's going okay.
And it's slowly growing.
Like it's not level.
It's slowly growing.
But it's very, very slow.
Where if I devote my full attention to infinite banking, this business goes like this.
If I am not sidetracked by something else I have to learn or other people I have to manage.
Okay.
What I've recently done is said, you know what?
We'll keep the Airbnb because I like the land associated with it.
It's not really that much work because we have one.
If we had two of them, whole different story.
Because I manage that Airbnb with a client of mine.
He also has an Airbnb.
When he and I are getting questions at the same time in the apps, I'm like, oh my gosh, if I had two of these, this would drive me crazy.
Right.
Last weekend, we had people at our Airbnb.
Not the end of the world.
He had someone at his Airbnb.
Comments are coming in.
Hot tub's not working.
How do I get the hot tub working?
Oh, I did have a text message.
Can't get in.
Door's not working.
Just certain things that are, you know, simple questions.
But nonetheless, taking up your time.
And so what I found is that that kind of stuff, if we have one Airbnb, okay, I can handle that.
But at the same time, I'm in meetings all day.
There's a message coming in that we can't get in.
And luckily, I just had not been in a meeting.
Granted, Clint, the guy helping me manage, Clint could have answered that question as well.
But who knows if he was busy because he also has multiple businesses.
And he works and he's got a lot going on too.
And so I've just noticed that with my stuff, when I started looking at my numbers, diversification into other lanes was not making sense for me.
So what I've done is I have said, okay, well, what if I diversify in agriculture?
What if I just sit and go, okay, I'm going to buy some farm ground and I'm going to buy some cattle because that's what we have recently done.
The farm ground is great because my brother is farming that.
And I know it's being managed correctly.
I know I don't have to worry about a payment.
We are not farming on shares or anything, but I know it's being taken care of, right?
Farm ground is pretty easy.
Don't have to do a whole lot with it.
Don't have to mess with people.
Just one person.
That's my brother.
Pretty easy.
And we've recently bought cattle.
That too is with a neighbor who we know we can trust.
We know that they're going to take care of it.
They've already rented our land for years.
We know that they're going to take care of the cows.
We know that they're going to do what's right.
We have a contract in place.
We know that they're getting checked on every day.
They're getting fed.
Like right now, as I'm recording this, they're on our place.
We can see them in our backyard.
We helped move them.
Like we're in contact with those people.
We know we've hired a good manager.
The farm ground, a good manager.
The Airbnbs, I'm managing it.
So here's the thing about diversification.
I am diversified now, really, in what I understand.
And that's agriculture.
I'm not in a whole different lane having to learn new stuff.
I know agriculture.
I know land values.
I know cattle values.
I know cattle.
Like these are the things that I already know.
And the little bit of those things that I don't know.
I have good people that I can ask.
Good managers.
Good people that I can trust.
And so when people ask me about diversification, currently it depends.
I am going to say, no, don't change lanes unless you have a really good manager.
Why did we sell our long-term rental instead of turning it into a short-term rental?
Because there was not anybody locally that I knew that could manage it or would manage it
the way I would manage it.
And even if they did, did I want a hassle of being in real estate?
Because I don't want anything to do with it.
I don't want to have to worry about something being broken and being repaired.
I don't even want to be asked about that.
Oh, the stove broke and we need to replace it.
I don't want to know.
It's not something that I have found that is this massive interest of mine, right?
A passion.
I love the cattle.
I like the crop ground.
I love infinite banking.
I love doing this.
I'm going to stay where the passion lies.
If my passion was in managing people and being a manager of companies and being this big CEO
person, then great.
I would go have my fingers in a bunch of different businesses and I would manage people.
I have looked at, oh, maybe I could buy this business or maybe I could buy this business
and I could run this business.
Believe me, I've looked at those things because I can see how people are running their business
and it makes me cringe.
But guess what?
You got to sit back and go, hmm.
If I did all that, then I would have to manage the people in the business or I would have to
find a manager who could manage those people and I could be external.
If I could do that, that might be of interest where I'm only having to deal with one person.
But you have to find that one person to deal with.
And it's just not that exciting to me, frankly.
So I had some clients call me last week and they said, Mary Jo, what do you think about
diversifying into real estate?
Our family does that.
You know, that makes sense.
And I said, well, you're doing sell by marketing and you're making a lot of money doing sell
by marketing.
Why would you change lanes if you know how to do sell by marketing?
And we know, right, based on all the trainings of sell by marketing guys, we know that when
the market falls, there's money to be made in sell by marketing.
So even if cattle prices fall, we know there's still money there.
If that's what we know, why wouldn't you do it?
The client is a veterinarian.
His wife homeschools their children.
And so she's just saying, hey, we kind of have all our eggs in one basket.
Should we be diversifying?
Do you need to diversify?
Like people are always going to eat meat, right?
So do we need to be diversifying, especially if we know how to run the business?
Or should we pour more into the business because we're making more?
In their particular situation, we went, I met with them in 22, I believe it was.
In 2022, they were making 1.5 million gross.
In 25, they made 10 million gross.
Like they have grown that much in three years.
Why would you not continue to pour into that business?
That just makes sense to me.
As soon as we change lanes and we have to worry about all this other stuff, unless we have a good manager for that stuff and we need a place to be putting some capital and creating some cash flow, why would we do that?
And just them asking that question showed me that they don't really understand real estate because real estate right now is not the greatest place to be based on the people that I'm talking to.
And when I'm looking at people that are real estate investors, yes, they're still investing.
The deals are out there, but they're far and few between.
There's, you know, less people making money in that industry.
So why would we go that way?
Well, we're going to go that way if we don't truly understand what's happening in real estate, right?
So as long as we can stay in our own lane and or we find a manager on the other side of it that we can have run these businesses for us, that's great.
That's fantastic.
But if we have a successful business and now our focus is going to be moved away, I'm just going to tell you from experience of what's happened to me, my numbers do not look as good.
And so I'm not going to tell somebody else to do that.
If you want to try, go ahead and do it.
Hey, I did it.
Somebody could have told me the same thing and I'd have been like, you don't know what you're talking about.
I'm better than that.
I can run this business.
I can do multiple things until you can't because you're tired.
That becomes a factor as well.
You know, I'm not getting younger over here.
I'm getting older.
And as I get older, I'm getting more and more tired.
And there are certain things like one of my colleagues just said to me a couple of weeks ago, Mary Jo, why do you still mow your grass?
Hire somebody to mow your grass so that you have time to do other things.
You know, like I don't love mowing my grass twice a week.
Let's be honest.
Like that gets a little annoying.
But I do like to mow your grass because it's my time of no thinking.
Right.
Or I'm able to think without all these other distractions, I should say.
Because I'm just sitting on a mower.
Just trying to keep a straight line.
Like it's pretty brainless until I get to a tree and I got to go around a tree.
It's kind of my downtime a little bit.
And so if I don't mind mowing the grass, I'll mow the grass.
But you do get to the point where you're running so thin because you have so many things that you're doing.
Which one is being successful?
It's kind of the, you know, the old question of do I farm and ranch or do I just farm or ranch?
Because if we're going to be calving in May and planting in May, are we actually paying attention to our crops like we should or our cattle like we should?
Are we losing cattle because we're in the field?
Are we not growing a great crop because we're calving?
Because we didn't get planted on time?
I don't know the answer to that question.
I have no idea.
But we have to ask which lane are we choosing, right?
You've got some guys that are farming that also do drone crop spray.
And that's great.
That's fantastic.
But they have to have the right manager in place because if you want to be in the tractor and you want to be the one farming, then you can only get so busy before you become the manager of it all.
Why doesn't Mary Jo have 10 agents?
I don't want 10 agents working for farming without the bank.
Because then I am busy managing people and I don't get to sit behind the desk and talk to you guys one-on-one.
That is my absolute most favorite thing to do is to be able to talk to you and hear your stories and then share your stories if needed be.
But if I can't do that because I'm so busy managing people, I've defeated where my joy comes from.
And there's something to be said for that as well.
So I don't know that I've given anybody an answer.
Hopefully I've given you some things to think about because that's the way I'm thinking about it.
But because this very topic has come up with four different people in a week, that means the topic has to be discussed.
And this is just my experience of what I've learned.
Stay in my lane.
Don't cross over lanes.
Don't take a full, you know, right turn and not know where I'm going.
And try to figure it out along the way.
And hopefully this road just keeps on going and traffic just keeps on flowing.
That's not going to happen.
Eventually something has to give.
From my experience.
So hopefully that helps.
If you guys have comments, questions, concerns, let me know.
Maryjoe at withoutthebank.com.
If you've not gotten your book, go grab your book, Farming Without the Bank.
Get the bundle.
Get Nelson's book with it.
And then schedule your time for John and I to help you.
That is what we're here for.
That's our favorite part is sitting down with you guys and figuring out if it's going to work or not.
We look forward to it.
Okay, if you need anything, you know where we're at.
You have a good rest of your day.
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