The livestock shall grow in number and allows year after year financing your holidays, sea or air cruises or additional everyday comfort.
Building up an additional income
Mr Grant, 45, is due to
go on retirement in 15 years. To diversify and increase his actual assets
and income, he calculates he shall need, in addition, 4 668 / year
or 389 / month .
In both cases 1 and 2 . We have chosen the growth option (no yearly cash
income).
First alternative : Mr Grant, at the very start, buys 20 heads, then 4
heads per year during 15 years or ; he buys 30 heads a the start, then
3 heads yearly during 15 years
Second alternative : At the very start he buys 60 heads to be kept up
to the time he is 60.
If the calculation is made on following figures :
- cost per head 1 167
- average yearly yield (in number of heifers) 4,20 %,
At 60 Mr Grant will be the owner of about 95 heads, this means about 4 heifers a year (about 4 668 ).
To allow the purchase a specific asset
In 8 years time Mr Ship
wants to find the financing for a 62 504 boat but does not
want to borrow from a bank at 9 to 12 %.
To get that, Mr Ship can buy 6 heads per year (growth option)
If the calculation is made on the following figures :
- cost per head : 1 167
- average yearly yield : 4,20 %,
At the end of 8 years his livestock will be 55 heads, or 64 185 .
To diversify her assets and with the aim
to find a supplementary income at the age of 54, Mrs Steel
buys 20 heads (growth option).
As from the 14th year (she will then be 54), and taking into account a
supposed yearly yield of 4.20 %, the livestock has grown to 30 heads.
1) She sells 2 animals a year : stock sold out in 37 years
2) She sells 3 animals a year : stock sold out in 27 years
In 14 years time, when his son starts
high school, Mr Roland guesses the fees will amount to 304
per month, i.e. 3 648 a year. To face this expense his son
could withdraw cash from a bank account bearing say 6 %, the initial capital
to allow this rate of withdrawal must be 13 047 .
To obtain the same capital in 14 year's time, Mr Roland has to buy now
7 heads (growth option) using the same supposed figures as in the 3 examples
here above (1 167 and 4.20 % yield).
He would own 11.46 heads, i.e. 13 373 .
To accumulate saving for near relations
To be available only when they come
of age at 18, Mrs Marchant wants to prepare a capital for
each of her grand children : Eric (5) and Joelle (3).
She buys two herds, each 15 heads (growth option) using the same supposed
figures (1 167 , 4.20 % yield) then donates them to Eric and
Joelle through a deed.
When time is up, Eric and Joelle shall each takes possession of a herd
of 31.11 heads, thus a great help at the beginning of active life.
If you need more information you may leave
us a message or write to :
Elevage et Patrimoine
4 place Andrι Marie Burignat
BP n° 10
69881 MEYZIEU CEDEX
NB : letters are treated in chronological order
/