# 106: How Smart Money Moves Can Keep Your Family Farm in Business for Generations
” So what we're doing is just teaching farmers, ranchers, anybody really, how to utilize money correctly so that we can make the bank plan B instead of plan A.”
The reality of farming today is that it takes more than grit and hard work to keep an operation going. The numbers matter. The way we handle money matters. And, unfortunately, a lot of farmers and ranchers find themselves navigating uncertain financial waters when the banking system shifts.
I had the chance to sit down with Mary Jo Irmen, the author of Farming Without the Bank, to talk about financial strategies that could offer farm families more control and stability. While every operation is different, she shared some insights on alternative financial tools that some farmers have used to reduce their reliance on traditional bank loans.
Financial Risks Farmers Face
It’s no secret that agriculture is heavily tied to the banking system. Loans for land, equipment, and operating costs are part of the equation for most operations. But what happens when banks change their lending policies?
Mary Jo shared that she’s seen cases where banks acquire local ag lenders and then shift away from farm loans, leaving borrowers scrambling. This can create difficult situations, especially when a renewal or line of credit suddenly isn’t available at a critical time in the season.
While traditional financing is an option, some farmers have begun looking at alternative ways to manage cash flow and keep their financial options open.
What Is Infinite Banking?
One concept Mary Jo discusses is infinite banking, a strategy that utilizes whole life insurance policies structured for cash value growth. Some farmers use this as a way to build liquidity and have another source of financing for their operation.
Here’s a general idea of how it works:
A whole life insurance policy is structured to accumulate cash value.
Premiums are paid into the policy, building up savings that can be borrowed against.
Some farmers choose to use this as a source of funding for operating costs, equipment purchases, or land payments.
Unlike traditional loans, repayment schedules are flexible, which can be helpful in years with variable income.
Of course, this strategy isn’t for everyone, and it’s important to understand all aspects of how it works before making any financial decisions. Consulting with a knowledgeable professional is key.
Estate Planning & Keeping the Farm in the Family
Estate planning is another area where financial tools like life insurance can play a role. Mary Jo pointed out that one of the biggest challenges in farm transitions is finding a way to pass the operation down without putting the next generation into overwhelming debt.
Some families choose to use life insurance policies as part of their estate planning strategy. When structured correctly, they can help provide liquidity to:
Assist the farming heir in buying out siblings at a fair price.
Cover estate taxes to avoid selling off land.
Ensure that off-farm heirs receive an inheritance without burdening the farm operation.
Estate planning is highly individual, and there’s no one-size-fits-all approach. But having these conversations early and exploring different options can help avoid difficult financial situations down the road.
Exploring Financial Options for Your Farm’s Future
Farmers and ranchers work hard to build something that lasts. While traditional bank loans are the norm for many operations, exploring additional financial tools could provide more flexibility and control.
Financial Disclaimer: This podcast is for informational purposes only and does not constitute financial advice. Every farm operation is unique, and financial decisions should be made in consultation with a qualified professional.
If you want to learn more, check out Mary Jo’s website at farmingwithoutthebank.com. It could be the first step to ensuring your farm isn’t just here for your lifetime—but for generations to come.
To connect with Mary Jo, you can find her on Facebook, Instagram, TikTok, and YouTube.
More from Farming on Purpose
Join the waitlist for our premier class - planning your marketing year in a day! Waitlist members will have access to the class at a discount, as well as the only opportunity to add on a discounted consulting session to review and diagnose their marketing strategy. Sign up here!
If you are interested in signing up for the Marketing Routine class, do so here!
If you would like to support the podcast or be a part of the conversation join the Farming On Purpose Facebook group and visit the Farming on Purpose merch page.
Check out our favorite software tool for online sales!
Thrivecart is a software tool you can use to design online checkouts with every option you can dream up. You can sell physical and digital products, connect to loads of other softwares you use for your website, accepting payments, email marketing, and more. This is the most powerful tool I use and the lowest cost one. I recommend it for anyone who accepts online payments who wants to increase their revenue or average order value. Learn more about what Theivecart can do for your business here: https://backpocketsocial--checkout.thrivecart.com/thrivecart-standard-account/
I may earn affiliate commissions from links on this page.
Listen wherever you get your podcasts!
About the Host of Farming On Purpose, Lexi Wright:
I’m your host, Lexi Wright. I started the Farming on Purpose Podcast from a passion for sharing the future of production agriculture.
I’m so glad you’re here and I hope you’ll take a moment to join the conversation with me and other listeners on social media.
Connect with me on Instagram, Facebook, and TikTok.
Rate, Review & Follow on Apple Podcasts
