Buying A New Tractor As A Hedge Against Inflation.

   / Buying A New Tractor As A Hedge Against Inflation. #31  
npalen

Invest in some really nice vintage archtop guitars. I've heard they are a great hedge. Just watch antiques roadshow.

By the way, you have a great website!

Jeff
 
   / Buying A New Tractor As A Hedge Against Inflation. #32  
I have not read the other replies... My friend bought a tractor WAY before he needed it (he still doesn't really need it much). I thought he was nuts but the cost of that same tractor is way more expensive and he's already has it totally paid off.

IF he had a change of plans or had to sell it, the outcome would be different but so far it's working out for him. I don't think I could (or want to) pay for my tractor 10 years later... I keep an I for tractors like mine that are for sale and I think I could sell it for about the same price.

{edit} I went to an inflation calc. and the $15,500 I spent in 2005 is worth $19,265.04 now... I couldn't sell it for that much (not sure I would even sell it for that if someone offered me that - not worth it).

I bought my L3400 in 2006 for $17k. Certainly aint worth over 20k.......allthough I think the newer L3800-L3901 are a tad over.

With ~900 hours and some imperfections (dented hood, one headlight not working, both rear taillights and flashers busted) I could probably get 10-12k for it.

Still aint bad though. Being worth 5k-7k less than I paid, over 900hrs of pretty hard use. I dont treat mine as a garage queen like some I see.
 
   / Buying A New Tractor As A Hedge Against Inflation. #33  
If the OP needs this argument to talk SWMBO into a tractor prurchase then I think it makes sound financial sense. He should go for it!
If he wants to make/preserve money then it seems like folly.
 
   / Buying A New Tractor As A Hedge Against Inflation. #34  
Interesting, I wonder where the Professor is on this. Anyway, a tractor won't be worth a plug nickel without diesel in it. My wife, the conspiracy theorist, says that's why the gubmint puts an additive in diesel fuel to make it go bad in a year or so, so we, the preppers can't squirrel it away. I think she might have something going there...
 
   / Buying A New Tractor As A Hedge Against Inflation. #35  
If you need a tractor that is one thing. If you are trying to prepare for a market crash or hyper inflation I would invest in guns, ammunition, adult beverages, tobacco products, and toilet paper. You could trade for anything else. Just my two cents.

My theory is simpler - for SHTF, invest in guns and ammo. You can get anything else you need later from those who didn't.
 
   / Buying A New Tractor As A Hedge Against Inflation. #36  
TOILET paper is always at the top of my list of survival supplies.

Timing is everything. I kick myself for seling an old worn out Steiner 430 a couple of years ago. There was a glut of them on the market at the time. CDN Dollar was strong. I had to lower my price and lost money. Had I kept it, I could have made a handsome profit today. A new Steiner 440 (Diesel) today costs 28-29 Grand CDN! Freaking INSANE!
 
   / Buying A New Tractor As A Hedge Against Inflation.
  • Thread Starter
#37  
Old thread but interesting in retrospect.
 
   / Buying A New Tractor As A Hedge Against Inflation. #38  
Far as I'm concerned the ONLY tractors that are an 'investment' are the pre 4 tractors and they actually appreciate in value. I know, I own 2 of them and presently they are both worth around what I paid for them new and they are 20 years ol. The newer stuff will never increase in value, only depreciate. Of course if you factor in the declining value of the dollar, they aren't worth much anyway.

Me I have gold, guns lots of ammo and other things that aren't for sale, anyway. Just in the midst of loading up another thousand rounds.
 
   / Buying A New Tractor As A Hedge Against Inflation. #39  
As a hedge against inflation, a tractor would be a poor choice. They lose value the minute you take delivery of them...thousands less than you paid. Even if their value increases with inflation, it's not going to make up the thousands they initially lose. If you're not factoring in the cost of renting a machine when needed, the convenience factor, etc....just the straight "investment" potential, it's not really hard to figure.

People will say "I bought a tractor for $15,000, used it for ten years and sold it for $15,000, so it didn't cost me anything." That's not true. Because of inflation they lost money.

I used an inflation calculator and picked the year 2000 and the year 2010 to figure out what it would be for the $15,000 tractor I mention here. To be dead even, you'd have to sell the tractor for $19K in 2010. I don't see that happening very often. In the example above, the person selling the tractor for what they paid lost $4K on the deal. Granted, they had the use of the machine, but that's a different topic.

In short, buying a tractor isn't an "investment" it's an expense. Yes, commercial farmers are "investing" in their business when they buy equipment, but the equipment itself is not an investment, it's a business expense that they get a tax credit for. There's essentially no chance they will sell the equipment for more than they paid for it, corrected for inflation, down the road.

Other than retail sales, the only reliable way to make money on equipment would be if you bought something used that needed significant repairs you are capable of performing yourself, getting it all fixed up, and selling it.
What if you buy a tractor for $41,000 use the heck out of it to make thousands of tons of hay for 4 years, then sell it for $56,000?
How’d I do?

Like everything else you can buy the old saying “buy low, sell high” is the key.
 
   / Buying A New Tractor As A Hedge Against Inflation. #40  
Series "I" bonds.
 

Tractor & Equipment Auctions

8 Ft Fork Extensions (A50322)
8 Ft Fork...
CATERPILLAR 308E2 CR EXCAVATOR (A50458)
CATERPILLAR 308E2...
FRUITLAND VACUUM PUMP (A50854)
FRUITLAND VACUUM...
2013 TRAVIS BODY & TRAILER, INC. ALUMINUM BELLY DUMP (A50854)
2013 TRAVIS BODY &...
ALL TITLED ITEMS HAVE A $35 TITLE FEE!!! (A50775)
ALL TITLED ITEMS...
2000 KOMATSU VALMET 860.4 FORWARDER (A51222)
2000 KOMATSU...
 
Top