Klean Diesel Kaput

It's a Zerostart lower rad hose heater. I generally do one hour of plug-in time for every 10C below freezing. That's enough to let me start without any preglow time.

 

Ok, I understand ... I guess. My hobbies are cheap, I figure saving is more important

Which is why I was 100% debt free by my mid-30's

I use them on the heavy equipment at the hobby farm. They work very well

 

Debt free works for some, but with the farm we try to run a lot of debt for a simple reason, taxes. Most farms run this way. I know a lot of farmers who tried running their farms debt free and eventually gave up.

 

Another example of tax laws producing unintended and bizarre consequences.

Tom

 

Agreed

 

Its pretty simple really. YOu get taxed for the money you have on hand, you dont get taxed for debt. When it comes to assets and land taxes farmers get a huge break.

60% debt and 40% profit is what has been pounded into my head as being successful yet safe. I know a farmer who was an accountant and now runs a 1,000 cow farm. he runs 73% debt and 27% profit, which is about the max you can go and still pencil it out at the end of the year. Hes very successful in doing it, but he spends a lot of time doing bookwork.

As long as you continue to cover you fixed costs and over time you can cover your variable costs, things will always work out.

Dairy farming is extremely capital intense. Meaning you need a lot of stuff to run an effiecient farm and you need a lot of new advanced stuff to make it even more efficient. Then on the flip side you really dont make any money. This is why you rarely ever will see a young farmer just build a barn and start farming, the bank simply wont let you.

Your typical 1,000 cow farm that does all of their own work and owns a few hundred acres is worth between 7 million and 11 million.

 

Sad thing is, all that stuff really is NOT yours. It's fine to be worth X dollars on paper, but at the end of the day, do you really own anything?

For example, here in Canada I incorporated as a Canadian Controlled Private Corporation.

Canadian Controlled Private Corporation - Corporate Tax - CCPC

as I involved a VERY smart law firm, which includes on its board several VERY smart taxation attorney's. Even with my company income, my net tax rate is never higher than 11%. With various Federal, Provincial, and local incentives, grants, etc, the company usually has a very small refund

As a Shareholder in my CCPC, I have the ability to "pay" myself in Dividends, which fall under my Lifetime Capital Gains Exemption. With the taxation attorney suggesting what split to provide me for the maximum tax advantage, I also enjoy a very small refund

Farming is extremely capital intensive, the cash burn rate is downright frightening. I wouldn't touch that occupation with a 10 ft pole. However, I have nothing but admiration and respect for those who chose to become farmers

 

On our frm yes we do own a lot.

 

Good to hear

A lot of folks assume that just because something is in their possession, it is theirs. Not if somebody else owns the note

 

O I know that.

Were far from debt free though. But its the way we run our business to be profitable. To a lot of people it doesnt make sense. How can you be making money when you are always in debt. Its a tough concept for many to grasp.

And right now id be willing to be that a lot of farmers are still in some big debt because of the last two years. Even if they didnt buy anything at all, a lot of them still took out operating loans at one point.

Loans are like credit cards and they work to your advantage if you are smrt with them. Its free money, but with an interest charge. Pay your credit card off monthly and you get away just fine. Pay your loans off early and you barely pay any interest if you do it right. This is how we operate, when there is good financing we take advantage of it, then pay it off early and avoid getting slammed with interest.

I believe you mentioned something about how Canadas system worked earlier. I dont think I would want to be a dairy farmer up there. Dairy farming is completely controlled by the government. yes they get a lot for their milk, but IIRC it costs something like $20,000 to add one cow to a farm because of the volume limits.

 

Correct on farming in Canada, which is why you will notice that so many are leaving the business altogether

A lot of Canadians assume that Canada is this marvelous food-making nation. With the exception of grains, many foodstuffs are imported from the US, meats from as far away as Brazil, due to cost

How is THAT for irony?!

 

Yep Canada is interesting when it comes to agriculture. But they do have really good hay, we get all of our "dairy Quality" hay from Winkler, Manitoba.

 

Also known as Comparative Advantage.

 

Here is a little tidbit about new generation diesel plug-in hybrids: Volvo Plans Plug-In Diesel Hybrid for 2012 - Wheels Blog - NYTimes.com

Teaser quote:

At 120 mpg, the Volvo diesel plug-in hybrid would make the Prius look like a gas guzzler. The only question is whether the American market will see the car. Volvo has dropped the ball a number of times in getting diesels to the American market, so I wouldn't be the least bit surprised if they repeat again. They are nothing if not consistent.

Being able to purchase a car with a 120 mpg rating would be shocking. I know I would be in a state of shock the first time I went a month without buying fuel.

 

The 120 mpg rating comes from using the plug in feature. Once the plug in charge is depleted from the battery, the mileage will be much worse. Mileage ratings for plug in vehicles are highly misleading. Using this same system for rating mileage, a pure EV would have infinite mpg.

Tom

 

It would seem that the next area of fighting over car efficiency will be the EV rating.... BTW, the Volvo has an EV-only range of something like 30 miles, so the diesel-hybrid would seem to be more efficient than a gas-hybrid. The question is how much more efficient?

 

The EPA test only runs for a short distance, not the entire tank. Thirty miles of EV range totally skews the mileage figures, so there is no way to infer that the diesel-hybrid system will be more efficient than the one in the Prius.

Tom

 

Yea, very shocking on your wallet. You'll get to pay for Diesel, hybrid and PHV battery premium.

 

In my neck of the woods, Chevron diesel is approx. 5 cents/gallon more than Regular unleaded. Hybrid premium is probably comparable to the same premium on a Prius. As I would expect to be the same on the Prius PHV battery. I imagine the Prius PHV is probably facing the same question, with the difference probably being in the range variable for the diesel engine.