A family acquires a plot of land.
How they got the land doesn’t really matter, perhaps they stole it from some natives or they settled it when no one was there.
The family members over time turn the plot of land into a farm. This is hard work that takes time, faith, investment, and belief in the future and that the rewards your kids will enjoy are in a way your own reward.
First the plot of land is cleared and the wood is used to build a house, a barn, tools, toys, cribs, beds, cabinets, tables, chairs, and more.
At first the family must hunt and gather food from the wild while starting the garden and clearing the fields for commercial agriculture; extra food that the family will sell on the open market or to other people in the area.
As time goes on and the family grows due to marriage, births, and a few farm hands, the family expands the fields and grows more for others than themselves. The farm looks less and less like a homestead and more like a business.
The land, then, is increasing in value and the total value of the business is increasing as more land is cleared and farmed and they figure out ways to increase yield and up production.
The family is starting to accumulate wealth and the land is soaring in value as it is an asset producing free cash flow.
The family lives off the cash flow while eating only a small portion of the food. Some may say the family is dirt rich and cash poor but this family has all that it needs and there is no reason to think that the increase in yields, production, and value is going anything but up in the long run.
Through the course of it’s history, the family will face down years; low yields, and other hardships such as weather, pests, and sickness. They may even have to deal with war or depressions. But since the farm is productive and producing way more than the family needs, they have a lot of downside protection.
This family is in a good spot because this family owns a good farm. The kids will grow up with jobs and savings and they will develop skills and work ethic.
This family, while well off, is not fashionable. Though the work is much easier than it was in the past, farming is easier than land clearing for instance, it’s not exactly glamorous.
This cannot be disputed. It takes a certain kind of woman to want to live on a farm and most of the hot ones want to live in the city.
The farm land is now worth quite a lot of money and there are still a few acres that the family never did farm, the land there was less than optimal for some reason and grandpa wanted some trees for deer hunting.
The family decides to sell the 2 acres of land to two families who are going to build houses on the land, complete with swimming pools and Traeger grills.
And with a small transaction that a real estate agent mostly handles, the family makes more money signing papers than in 6 months of work on the farm.
The family now has a decision on what to do with the money; invest the money, say, by buying a combine, or spend the money on beach vacations.
The family can buy the combine and benefit a little now but keep the family business assets growing or it can spend the money on consumption.
As the value of the land goes up and the station of the family rises, the temptation to sell more of the land grows each year. As the family enjoys beach vacations they soon want to vacation in a foreign country far away. The family finds it easy to justify the expense and marketers make it easy to believe that spending the money is actually a necessity.
There are less kids being born every generation into the family so why invest when one can spend now. Besides, the farm is still plenty big and Mexicans are working the farm at low wages, so the kids need something to do.
The family though in the farming business, is running a deficit. The family spends more money than they bring in from the farm. The family has a line of credit that is being drawn down on against the value of the land.
The plan? Just sell a few acres every couple years. The family will use the money to send the kids to college and they will get better jobs with their degrees, the family reasons, so why do we even need all this land?
As time goes on the value of the land keeps increasing. All the new houses built on the former farm land is creating demand for even more land, there is talk about converting the zoning to commercial, where the real money is. After all, these new neighbors need to buy groceries, and need services.
The family is now selling land at prices Grandpa could have never dreamed. The kids are spending whole summers in Europe.
As the farm shrinks, oddly enough the family lifestyle has increased. Since the farm is smaller now, the money from selling crops isn’t enough to live off. Because of this more of the kids start moving away and the family is dispersed around the world doing different things.
The family looks more like a collection of people who share DNA. The family get together’s are odd since no one knows what to talk about since there is not a lot in common. The kids are left to fend for themselves anew each generation. Some are very successful in this new world, others are not.
The ones who are not successful can’t afford to join the other family members at the luxury beach vacation when the family gets together once a year. The older family can’t understand what is wrong with the younger generation. They wonder why the kids didn’t learn the work ethic that they did. The kids wouldn’t have made it two days working with grandpa on the farm, they think to themselves.
The quality of the family members has noticeably declined. The family members have little but disgust towards others in the family. They are happy they are not in business with them any more.