I heard a story about a woman whose family owns a farm in Hawaii. Despite her decidedly hippy-like life leanings, she was explaining why she is now politically conservative.
“You become conservative,” she said, “when you have something to conserve.”
What the women meant for non-conservatives to hear by “something to conserve” was that she’s a conscious environmentalist fighting to protect a fragile and disappearing ecosystem (that’s she’s a conservationist). But what she actually said was she’s a conservative — the thing she cares about conserving is her right to the land, her and her family’s wealth.
These kinds of slight-of-tongue tricks are important to wealth preservation. They lead people away from the inevitable questions about the duties that come with wealth accumulation by saying simply, “my wealth is a selfless thing. It’s not for me, it’s for all of us.”
Interestingly, this “thoughtful caretaker” trope hasn’t caught on as near as well as the previous generation’s strategy, which capitalized on minimizing perceived wealth without actually parting with any of it. The age-old adage I heard growing up was “We’re land rich and cash poor.”
It’s important that in the saying, the “poor” part comes second. When used on a general audience, it allows you to walk away from the phrase believing that, for all intents and purposes, the person is poor, especially because you shifted so slyly over the “rich” part.
But the thing is, there’s another way to describe being “land rich and cash poor.”
The idea of being “land rich, cash poor” is like being “gold rich, cash poor” or “bitcoin rich, cash poor.” It might mean you don’t have $5 on you to buy an ice cream cone or $1,000 in the bank right now, but it certainly doesn’t mean you’re poor, or that you struggle with the attendant, systemic problems of poverty (from poor educational access to malnutrition to a higher risk of being a victim of a crime).
Common counterpoint; my family farm is not like gold or bitcoin, it’s my heritage, my legacy. It’s been in my family for generations, and I can’t possibly part with it. I won’t.
And that’s what this saying’s all about. At least part of the subtext is clearly; “I’m not doing this for myself, I’m doing it for my kids and for future generations.” (The most recent person who argued this point with me opened with the idea that he was a blue collar worker because he only made $50k last year. He owns 1,200 acres of farmland in Iowa. Estimated worth; about $8.9 million.)
Sure, we are all attached to things, people, places, ideas. Family legacy and the sacrifices that our parents and previous generations made for us are important to honor. That’s human. But the difference between a landed farmer who earns $50,000 a year in net revenue and anyone else (a teacher, cop, or truck driver perhaps) is that if you had a month to get together $1 million for a cancer treatment to save your child, the farmer would have the choice, 1/9th of my acreage or my child. And the rest (barring a financial miracle) would bury a child. That’s the difference between whether you have the “land rich” before the “cash poor” label or not. Family legacy is important, but the point of past generation’s investment was to give future generations choices, by way of wealth. Not wanting to part with generational wealth makes sense, but that doesn’t mean you get to pretend like it doesn’t exist.
Don’t get me wrong. Many families who live on farms, throughout time and space, have been genuinely poor. They’ve struggled and starved, scraped by on little to nothing, and poured their lives into rented, borrowed, or sharecropped land they hoped would feed and cloth them, and serve as a springboard to a better life. But poor people, by definition, don’t own land. Even extraordinary low quality in land, pretty much everywhere in the world, is worth money (that’s why defining and enforcing small-holder land tenure is a global anti-poverty strategy, because owning land, by definition is anti-poverty).
Another common counter point; “I don’t own the land, I have a mortgage.” Fair enough, a mortgage is a path to land ownership and can be leveraged in some ways like ownership, but payments can be a burden. But the thing is, banks don’t give loans to people on faith— some kind of collateral must be offered; an original land parcel, a house, a down payment. You need wealth to leverage wealth. Yes, if you can’t pay the mortgage (every payment of which, of course, contributes to your overall wealth, as opposed to rent, which does not), the institution has claim to your assets, and you could lose your wealth. But that is not the same as being poor, that’s being in a position to take a risk to grow your wealth. It means you have wealth already, and you’re looking to have more. It’s basically the opposite of poverty.
We could split almost infinite hairs on this topic. But the key takeaway is simple. If you own land, and thus are land rich, you cannot be poor.
I’m not in anyway implying that aiming to grow your wealth through farming is wrong. In the US, people are largely free to do what they want with their wealth. But having your wealth tied up in investments does not make you poor; or in need of charity, pity, or the bizarre perceived position of “underdog” in society that makes you more publicly empathetic than the wealthy.
Is it expensive to farm? Yes. Do farmers have to invest a lot to make income on their farm businesses? Yes. Do many families live austere lives while they grow their businesses and their wealth? Yes.
But. That. Does. Not. Make. Them. Poor.
Owned farmland is wealth — whether it’s inherited, bought, or being paid off.
The concept of being “land rich, cash poor” is a fallacy.