Buying A New Tractor As A Hedge Against Inflation.

[4570Man]

Personally, I think you would be better off owning precious metals. ie. physical gold and silver. But that is me. A tractor is only worth as much as someone wants to pay for it. If the dollar goes for a dump and becomes worthless, gold and silver will become the currency. Like I said, that is my opinion and sure as God made little green apples someone will jump all over my statement.

I mostly agree, but I think bartering items would be more valuable.

 

[/pine]

There is a certain dichotomy between hedging and prepping...but with the current political aspects...firearms (and ammunition etc.) have become a unique cross-over commodity...the odds of value retention plus are very favorable...compared to something that requires fuel etc...
It's hard to think of other items that will retain their value and the demand...

 

[MinnesotaEric]

Could investment of cash in a new tractor be considered a long term hedge against potential inflation and worldwide financial uncertainty?
The tractor would be kept inside and used only sparingly and for hobby purposes. I realize that the rate of inflation is currently very low compared to the past.
I also realize it wouldn't have a lot of upside potential but, then again the same can be said for current interest rates on savings. Part of the "return" would be the pride of owning a new shiny tractor.

I think that we have the deflationary side of the business cycle ahead of us.

 

[ultrarunner]

Not sure about new tractors...

My boss bought a brand new Ford GT for a 160k in 2006... enjoyed the car immensely for 5 years and then sold for 210k...

I've done well with used equipment... Owned my Dozer for 17 years and got near what I had in it.

Even smaller things like a professional drain auger... had 5 years and used it about once a month... sold it for $100 more than I had in it.

So far... I have never sold a car for less than I paid... of course all but one of my cars were bought used...

My only concern with anything new is what if the electronics go bad... or affect reliability?

 

[TomSeller]

I think big brand tractors hold their original purchase but would not expect to gain much. Unless of course your wife is convinced they do and you need to keep her happy to get " approval".

 

[Cat_Driver]

Could investment of cash in a new tractor be considered a long term hedge against potential inflation and worldwide financial uncertainty?
The tractor would be kept inside and used only sparingly and for hobby purposes. I realize that the rate of inflation is currently very low compared to the past.
I also realize it wouldn't have a lot of upside potential but, then again the same can be said for current interest rates on savings. Part of the "return" would be the pride of owning a new shiny tractor.

Impossible to calculate. Example, you have the actual cost of the tractor and the actual cost of selling it some day - that's the simple math. Now try and calculate the cost of usage and the saving of using your tractor over the price or renting or hiring the work out. Now you've got the maintainance, fuel, insurance to deduct.

The two tractors I bought were Kubotas. The one I bought in 1986 was a DT 4500 used for $2,500.00. I sold it 30 years later for $8,000.00 - but used the HECK out of it. I bet I saved tens of thousands of dollars by not renting a tracor ot hiring a guy to do the work.

The second one I paid 18K new, 6 years later sold it for 18K 8 years later, my costs were a battery, fuel, oil, some coolant, filters, and that was it. In that case th tracor cost me nothing, and again saved me thousands of man hours and non rental costs.

 

[LD1]

One nice thing about tractor data is it lists the original selling price of quite a few tractors.

From old 8n's to ~1990's models all seem to sell for about what the original price was. But you look at a 10 year old tractor, condition is everything. In A+ condition with low hours...probably can get what you paid for it. 10 year old tractor with 1500 hrs and some wear.....not likely to happen.

The old ones...condition and hours are less important, as long as it runs good and looks decent.

 

[Farmer495]

Depends on what you buy. If you had bought a brand new Belarus 25 years ago for 20k and parked it in a climate controlled building and never used it, you could sell it today for 15k.

I'm with the "buy it, use it gently and consider it SAVING money and time" and know you can sell it for close to what you paid in the future.

 

[davesl708]

Personally, I think you would be better off owning precious metals. ie. physical gold and silver. But that is me. A tractor is only worth as much as someone wants to pay for it. If the dollar goes for a dump and becomes worthless, gold and silver will become the currency.
Like I said, that is my opinion and sure as God made little green apples someone will jump all over my statement.

In a total economic breakdown the only precious metal will be lead. Just look at Somolia and Syria. Gold and silver are not getting you much. Lead takes gold.

 

[Texasmark]

Years ago a worn out Ford n series went for $1600 with a worn out 5' rotary mower. Today they are advertising and I assume selling the same for $2750!