Reason #3

          The third reason you should have a mortgage is the economics of your industry (and of the world for that matter.)  Who’s in control of that? Certainly not you or us. Considering the volatile nature of the world we live in and more specifically the profession that you’ve chosen, there’s no way to know what’s going to happen tomorrow let alone 10 years from now or 50 years from now.

          The only thing that is certain is that things will change. “How” is anyone’s guess.

          Forget about today’s markets and commodity prices, interest rates, or input costs. Here’s the real quandary that everyone should be very concerned about . . . currently the M1 is $1.7 Trillion yet the Commercial Banking System has excess reserves of another $1 Trillion as of July 2010 that the Federal Reserve could pump into our monetary system. That means that they could create $10 Trillion in new loans. What’s the result? Price inflation will soar!

          How would you feel about paying $15 per gallon for diesel?

          Now, mortgage rates currently are pretty low historically speaking. They’ve been this low before and they’ve been as high as 18% before (remember Jimmy Carter?) Do you think it would be a prudent thing to do if you could lock in a lower mortgage rate than you currently have now with the understanding that it’s only a matter of time before the rates go up again?

          It is a matter of controlling your money, your assets, and your land. But it is also about finding and taking advantage of opportunities. Today you may not need the money you’ve put into your ranch and you feel safer having it paid off. However, when opportunity knocks on a good deal on something you either want or need for your operation, what position will you be in since your largest amount of capital is locked up in your land?

          The question becomes, “what would you risk or have to give up if you needed to access the money out of your land at some point in the future when the rates have increased maybe even significantly from where they are now?”