fiancée student loan...

Saving & investing, frugality & simple living. They're all part of the wealth equation.
Here's the place to discuss getting (and keeping!) your money.

Moderator: lvergon

DoingHomework
Moderator
Posts: 5606
Joined: Wed Sep 23, 2009 9:01 am
Contact:

Re: fiancée student loan...

Postby DoingHomework » Wed May 02, 2012 12:35 pm

Savarel wrote:Look dude... the reality is the reality. The barn business isnt sustainable in the long run. If the parents wish to go down with the ship, so be it. Your fiance is destroying her future every moment she continues with this.


Whether that is true is an important question. If the barn business is sustainable long term but suffering because of the recession then it makes sense to pour money into it to capture the long term profits. In that case the business must be scaled back somehow to conserve short term cash.

If it is suffering because of a long term decline in people riding horses (or whatever they do) then operating it at a loss for even one more day is a mistake.

It also seems like the laid off father could take over the daughter's role and free her up to take an external job.

If I were in the situation I would be putting a lot of pressure on them to show me the numbers just to make sure they have a viable plan and aren't just trying to bail out a sinking ship.

talz13
Posts: 9
Joined: Tue May 01, 2012 12:27 pm
Contact:

Re: fiancée student loan...

Postby talz13 » Wed May 02, 2012 1:38 pm

DoingHomework wrote:
Savarel wrote:Look dude... the reality is the reality. The barn business isnt sustainable in the long run. If the parents wish to go down with the ship, so be it. Your fiance is destroying her future every moment she continues with this.


Whether that is true is an important question. If the barn business is sustainable long term but suffering because of the recession then it makes sense to pour money into it to capture the long term profits. In that case the business must be scaled back somehow to conserve short term cash.

If it is suffering because of a long term decline in people riding horses (or whatever they do) then operating it at a loss for even one more day is a mistake.

It also seems like the laid off father could take over the daughter's role and free her up to take an external job.

If I were in the situation I would be putting a lot of pressure on them to show me the numbers just to make sure they have a viable plan and aren't just trying to bail out a sinking ship.

No, the business is profitable, just not as much as it was prior to a few years ago. The business income takes care of the business expenses and the salaries, and it's not draining money from the family savings accounts to keep it afloat.

tazdollars
Posts: 289
Joined: Mon Sep 29, 2008 7:32 am
Contact:

Re: fiancée student loan...

Postby tazdollars » Wed May 02, 2012 2:17 pm

If it's not doing anything except taking care of expenses and paying sub-market salaries with nothing left over at the end it is, by definition, not profitable.

Tightwad
Posts: 1356
Joined: Mon Nov 01, 2010 5:15 pm
Contact:

Re: fiancée student loan...

Postby Tightwad » Wed May 02, 2012 2:34 pm

As a general rule of thumb, horse ownership/breeding/riding stables/etc should only be undertaken by people with a good deal of money as they can be quite expensive. It's better suited as a hobby rather than an occupation.

talz13
Posts: 9
Joined: Tue May 01, 2012 12:27 pm
Contact:

Re: fiancée student loan...

Postby talz13 » Wed May 02, 2012 2:37 pm

H
Tightwad wrote:As a general rule of thumb, horse ownership/breeding/riding stables/etc should only be undertaken by people with a good deal of money as they can be quite expensive. It's better suited as a hobby rather than an occupation.

That's definitely what we know from them having the business for 40+ years!

FelixTheKatt
Posts: 3
Joined: Tue Jul 05, 2011 8:54 am
Contact:

Re: fiancée student loan...

Postby FelixTheKatt » Wed May 02, 2012 2:41 pm

I have been in the equestrian business for 20 years, and unless you are running a multi-million dollar show facility, running a barn just isn't profitable. The horse industry is dying, and dying fast. Those who keep barns alive do it because they love it, not to become rich.

It sounds like this farm is in some serious trouble, and I wouldn't count on the economy turning around and helping it.

Here are some questions I would ask to see if there is even a chance if this farm can succeed. If they cannot answer these questions sufficiently, you need to convince your fiancee to walk away, she will only drag you both down with the failing farm.

How many lessons a week do they teach? How many horses are leased? A profitable farm does at least 5-10 lessons a day, 6 days a week. Ideally, at least half of those would be group lessons. A good farm aims to have at least 3-5 horses leased at one time-that can pay the feed bill easily. Even in bad economies, people love leasing, and you can actually make more than you did before the economy tanked. People who no longer can afford their own horse miss the experience, so they settle for leasing.

How many GOOD lesson horses do they have? A profitable farm has a school of at least 10 solid horses who are reliable, healthy, and athletic. Less than that, and the horses are overworked and shabby looking, which means no one wants to go to that farm.

How much boarding space do they have? If they have less than 10 stalls for board, they will fail. Board bills pay the mortgage. Small family barns crumble fast.

A profitable farm makes its bread and butter on 1) Boarding then 2) Leasing, then 3) Lessons. If lessons are their priority, they will never make money.

From what I've read here, this family business just isn't sustainable. It sounds like they're in way over their heads. I would strongly encourage the fiancee to move on to a new job, or for her family to sell it.

If that's not an option (which is crazy that she would think it's a good idea to only pull in $18-20K) then you'll need to pull the extra weight by taking a second job and cutting expenses.

FelixTheKatt
Posts: 3
Joined: Tue Jul 05, 2011 8:54 am
Contact:

Re: fiancée student loan...

Postby FelixTheKatt » Wed May 02, 2012 2:45 pm

Also, I don't understand the dad's lack of involvement. If your fiancee is teaching lessons, grooming, etc, then your dad can handle the books/management of the farm, and they can handle a college girl to teach lessons and handle grooming. Most farms succeed on the backs of dedicated college riders. The college girl would be happy for a barn job that paid $18,000, and your fiancee could get a job that actually pays.

DoingHomework
Moderator
Posts: 5606
Joined: Wed Sep 23, 2009 9:01 am
Contact:

Re: fiancée student loan...

Postby DoingHomework » Wed May 02, 2012 9:23 pm

Wow, Felix,

...and I mean this in a completely positive way...no sarcasm or anything else involved!

You have really laid out the situation from a knowledgeable perspective.

It's really easy to look at a current snapshot of a situation and make a conclusion that may not be accurate. Your description of the long term future of the equestrian business is telling. Perhaps an idea might be for the mother to hire 2 college students at $7k each (under 1000 hours at a little over minimum wage) after appropriate training. That would free up the future wife for another job that paid a hire wage.

The reason I asked my question about the long term future is that I am involved (mostly as an interested spectator) in a couple of businesses having to do with recreation. One is doing ok but is in a dying field. The other is not doing so well now but should recover well when employment picks up. I have no investment in these but it is interesting to watch how the focus on the present blinds people to the long term. The business in the dying industry has not even mentioned closing while the cyclical place talks about it all the time!

geoff_tewierik
Posts: 234
Joined: Mon Aug 08, 2011 9:13 pm
Location: Brisbane, Australia
Contact:

Re: fiancée student loan...

Postby geoff_tewierik » Wed May 02, 2012 9:54 pm

I'm curious as to what the fiance's degree is in.

peaceofmind
Posts: 113
Joined: Tue Jan 26, 2010 10:08 am
Contact:

Re: fiancée student loan...

Postby peaceofmind » Sun May 06, 2012 9:52 am

FelixTheKatt wrote:A profitable farm makes its bread and butter on 1) Boarding then 2) Leasing, then 3) Lessons. If lessons are their priority, they will never make money.


I haven't run a barn, but have known a lot of barn owners/trainers, and from my conversations with them, I would prepend this list with 1) Training board. (Which is basically #1 and #3 combined, really.) Most places I've boarded at (hunter/jumper/eventing barns, FWIW) have said that boarding breaks even, once they factor in the cost of labor and maintaining the facilities. If you tack on $X/mo for training, though (which is essentially "free" to provide as it only requires time, provided you have the in-house experience to provide training), then the profit starts adding up.

Is anyone at your fiancee's barn (including her) able to provide training (for horses)? If so, that could fill in her "empty" hours, and possibly also allow you to share a car (if she goes in at 7 when you do, and then you pick her up in the evening when she's done).


Return to “Personal Finance”

Who is online

Users browsing this forum: No registered users