The advice
Money Magazine asked Andrew Lucas, a certified financial planner in Manalapan, N.J., to meet with the Gunns in Springfield. Lucas, who runs his own cattle farm and specializes in closely held businesses, offered a few recommendations.
One of the most difficult issues for family-owned businesses, Lucas says, is working out a fair plan of succession and how to divide property when one child works for the company but the others don't. Lucas urges Kathy and Josh to sit down with his parents and draw up an agreement that spells out what the elder Gunns want to happen with the farm when they retire or pass away.
To ease their discomfort with raising the subject, Josh and Kathy could use an indirect approach, showing his parents an article they've read on succession planning. Or they can blame Lucas: Tell Mom and Dad that the financial adviser they've consulted insists that drawing up an estate plan is critical and in the best interests of the whole family.
If the elder Gunns do plan to leave equal shares in the farm to their three kids, Lucas suggests that Josh and Kathy buy a life insurance policy on his parents - you can buy a policy on someone else as long as you have what's called an "insurable interest" in them, such as a business partnership. They could then use the payout to buy the stake of a sibling who wants to sell.
The planner suggests a $1 million policy, which might run $10,000 or so a year. Lucas suggests that Josh's parents might be willing to pick up some or even all of the costs, since the policy would ultimately benefit all three of their children and keep the farm in their family.
The Gunns' best bet to generate extra money and alleviate the financial strain on their household is to expand their grass-fed-beef operation. Lucas suggests gradually increasing production from four head of beef a month to eight - a move that he estimates will bring in an additional $7,600 a month in revenue and net them a profit of $2,000 a month in the next three years.
To cover the cost of building up their inventory and expanding their marketing and distribution network, the Gunns can tap the $17,000 remaining on their credit line.
It's commendable that Kathy and Josh are eager to start saving in earnest again for future goals - retirement, college and even their daughters' weddings. But for the time being, at least, their more pressing need is to plow any extra money they have into their business.
For their age they already have a sizable amount (around $315,000) saved in their IRAs. Even if they never add a dime to those accounts, their nest egg should grow to more than $3 million by the time they're ready to retire in 30 years, assuming they earn an average 8% a year on their portfolio, Lucas calculates.
Nor, he says, should the Gunns worry too much about saving for college now. "As farm kids with a relatively low family income, the girls will probably qualify for financial aid," he says. As for the wedding funds, it's a lovely idea, Lucas notes, but it should be on the very bottom of their financial to-do list, something the Gunns have come to recognize after their session with the planner.
Says Josh: "Investing in the business has got to be our biggest priority now." Whatever happens going forward, the couple say they have no regrets about their move to the farm. Sure, they occasionally miss the restaurants in Atlanta and their friends in the old neighborhood. But Kathy says her feeling about city life now is "been there, done that."
When she is home with the kids in the afternoon and Josh pops in from the field to give one of the girls a ride on the tractor, or she's running along the farm road just breathing the clean air or four generations of Gunns are gathered around the dining room table for a meal, those moments are too sweet for them to consider a return to city life.
No matter how high the cost of moving to the farm has been, the Gunns say they've gotten more in return.
Are you prepared for a financial emergency?
With a recession and rising inflation, it's more crucial than ever to have a six to 12-month living-expense cushion in cash for an emergency. Don't have it? Drop us a line at makeover@moneymail.com. Include your name, age, city, state, marital status, occupation, how much you have in cash savings and retirement savings. Please send a photo of you (and your spouse, where applicable) too. 
