Advisors help clients make their rural dreams a reality-and sometimes their own.
Fifteen years ago, in his late thirties, recently
divorced, and struggling to convert an investment customer base into a
financial planning clientele, Guy Cumbie dreamed of owning and living
in the country. The former president of the Financial Planning
Association specced it out on paper, literally and in detail.
Among other features, he wanted 50 to 100 acres, a
white farmhouse, ponds, rolling topography, a creek and wildlife,
including deer, doves, turkeys and quail. Moreover, it had to be within
50 miles of Fort Worth, Texas, where Cumbie has his office and
practices financial planning, and have good perimeter fencing and
cross-fencing.
He even named it after the "Lazy Mac" brand he
designed for it. "'Mac" stood for the "Lazy Middle-Aged Crazy Ranch,"
says Cumbie.
Today, he's remarried, with a daughter who says,
"Daddy, look at those cows," every morning, and Cumbie Farms exists
pretty much as its owner originally envisioned it. Cumbie says he had
an epiphany of sorts in the life-planning process with the Kinder
Institute of Life Planning in the Rocky Mountains, which helped
rekindle the spark of energy behind his "Lazy Mac" dream.
Two centuries ago the English Romantic poet William
Wordsworth gently exhorted readers in his poems to appreciate and learn
from the benefits of nature. "Come forth into the light of things, let
nature be your teacher," he wrote.
Today, growing numbers of baby boomers seeking a
more bucolic lifestyle-not "retiring" in the traditional sense-are
seeking a way to learn and be closer to nature. For some, it may mean a
desire for a simpler life. Of course, for others it will be a means to
supplement retirement income.
This has many faces: a small vineyard, an organic
farm, a bed and breakfast, a nonprofit farm for the disadvantaged to
visit or a rehab for injured animals. It also can be a flower farm, a
lavender farm or perhaps a cheese dairy. In many cases, they are
stepping off the corporate treadmill, fulfilling dreams for a simpler
life that often were long deferred.
How do you advise clients who are retiring or
preparing to retire and start anew in the country? How do you help
clients with the "business side of things," not just the fun part they
dream about? Not every financial advisor is an expert in such matters,
of course. Still, many are helping guide clients to a safe harbor-and
sometimes joining the movement back to nature themselves.
Advisor Holly Hunter, CFP, RLP, in Portsmouth, N.H.,
and her husband, for example, recently bought a 100-acre goat farm in
Mexico. "We will be energy independent [solar and wind], and of course,
able to grow our own food and fish, as we are 300 feet from the ocean,"
says Hunter, who like Cumbie drew her inspiration from training through
the Kinder Institute. "The finances have been ultraconservative, as you
cannot borrow money for a mortgage in Mexico," she adds.
While the serenity of the rural existence is
certainly very real and palpable, it can come at a significant price
and with added complexity. Cumbie, who is assisting a number of
like-minded farm and ranching clients, readily acknowledges that his
experience with farming is not necessarily a template for everybody
else with similar dreams. "The bottom line-it's been exceedingly hard
and complex, far beyond our earliest sense of it," remarks Cumbie, who
allows that he has done everything from attending water rights seminars
to learning how to properly complete the IRS Schedule F.
On his way to work in Fort Worth one recent morning,
for example, he freed a deer caught in a fence near his gate. It was
hanging upside down by one of its hind legs between two upper strands
of barbed wire. "It would have died if I had left it there for even an
hour," says Cumbie, who also built the 1,000-foot fence himself.
Still, Cumbie would not have it any other way. He
says he's living his dream. Although his agricultural endeavors bring
in some revenue, he has no intention of giving up his day job as a
financial planner. He says he is increasingly able to help clients
aspiring to a rural lifestyle. "I've been able to do value-added
consulting with people looking for places in the country, in terms of
specifying the size, location and features of properties, and in doing
fundamental visioning work," says Cumbie, who is careful not to project
his own preferences and values into their situation.
Beth Jones, a registered life planner with offices
in New York City and Washington, D.C., is assisting a 57-year-old
client who is giving up life in suburbia as a consultant working with
developmentally disabled children from birth to three years old. In
place of this she plans another existence on a small farm, helping
people get in touch with their feelings and emotions through horses.
"In our work creating a life plan, she discovered
she no longer derived satisfaction in her work, due to regulatory
issues and paperwork burdens. It became more about keeping extensive
records for audits than working with children," Jones says.
"She just completed her training in
equine-facilitated experiential learning. We're working on
restructuring her life so she can end her consulting business and start
an equine-facilitated experiential learning center with a small farm
and a few horses. A casual acquaintance has already given her one
horse." The client, according to Jones, has designated her business The
Painted Horse Retreat.
Jones says she has more than 30 clients in various
stages of this kind of life planning process. "They're all looking to
simplify and live a more organic lifestyle doing work that makes a
difference, that's at their heart's core. That's what is most important
to them. It's what gets them out of bed in the morning. My job is to
help people live a fulfilled life."
Andrew Valentine Pool, an advisor with offices in
Houston and New Orleans, relates his experiences with a client who
intends to raise alpacas. "She saw that life was more than what she was
doing previously, studied the industry very carefully and took the
plunge a few years ago," says Pool.
She and her father now have a small number of
animals and are looking to purchase a farm, and Pool is helping them
develop a business plan. He also hopes to create an investment vehicle
to assist other potential clients who like the idea of having farm
animals as investments, but lack the time or inclination to be involved
hands-on.
One potential vehicle Pool is considering would
involve a client funding a self-directed IRA, the proceeds of which
would be used to purchase, raise and breed alpacas. The offspring of
these alpacas would then either be sold or bred, and the money
reinvested back into the self-directed IRA as cash. The money could
also be used to buy other alpacas. "It could be a healthy market for
investors interested in an alternative investment strategy," Pool says.
Advisors who have been through this process with
clients freely admit that it's no cakewalk. There are obstacles that
must be overcome. The learning curve is often steep. "It's simply a
level of awareness of how to help your client satisfy their life
dreams, but it's not easy by any means," says Pete Wheeler, CFP, ChFC,
an advisor in San Diego who is counseling several clients in this
regard.
Two of his clients, a husband and wife, developed a
successful technology support company, sold it, and took several
million dollars in proceeds and bought an avocado ranch outside San
Diego. Wheeler says, "They are using lease income from the property of
their former company to support their lifestyle while they build up
their farm income."
Two other clients, a doctor and his wife, sold their
home, put furnishings in storage and moved to Mexico, where they have
established an orphanage to care for the children of prostitutes and
drug addicts. Wheeler is writing a book entitled Activities, Things and
Dreams, based on his experiences working with such clients.
Susan E. Galvan, co-founder and CEO of the Kinder
Institute, worries that many people are too innocent when it comes to
this existence. "You're living with nature, which is not always
considerate," she cautions. Galvan recommends that advisors help
clients "research what's actually involved in trying to be
self-sustaining on the land. It's very labor-intensive. Unless they've
grown up on a farm or ranch, people need to experience it in some way
for a year or two" before taking the plunge. "You don't want to crush
the dream, but the dream needs to be rooted in reality."
Sometimes the stress of the endeavor can be
overwhelming. Ann-Marja Lander, a planner in Long Beach, Calif., saw
her two clients' marriage break up over their attempts to turn a
mansion in Lancaster, Pa., into a bed and breakfast. Originally, the
couple's budget was approximately $200,000, and they had planned to
spend possibly as much as $500,000 for the work on the mansion, the
wife's childhood home. But unanticipated repairs and other expenses
caused the costs to balloon to nearly $1.4 million.
The couple finally opened the B&B, and if the
current level of occupancy holds, it is expected to gross approximately
$100,000 in 2007-in an area of Amish country where the average annual
income is about $29,000. But the 18-month process, during which the
wife undertook work on the premises while the husband helped
intermittently, meanwhile also holding down his job on the West Coast
to meet expenses, was an ordeal that finally broke up the marriage,
according to Lander.
"On the face of it, it was their dream," says
Lander. "They had planned financially for this, but the unanticipated
costs put a stress on their marriage they were unable to overcome.
Every time they turned around, there was more money to be paid and more
regulations to follow. They opened the B&B, but at a great cost to
their relationship."
As we've seen, some boomers today are seeking an
alternative lifestyle. But the modern version of going back to nature
can involve recrimination and hardship.
Susan Galvan of the Kinder Institute has a final
word: "You can live on the land and still be wired into the world for
your income. You don't have to grow or build everything. Telecommuting
may be a more practical way to get back to nature."
Bruce W. Fraser, www.bwfraser.com/home, a financial writer in New York, may be contacted at [email protected].