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Impact Farming


Jul 7, 2021

In this week’s episode, Tracy speaks with Michael Langemeier from Purdue University about “Sweat Equity” on the farm.

The term sweat equity refers to a person’s contribution toward a farm family operation. Sweat equity is generally not monetary and, in most cases, comes in the form of physical labor, mental effort, and time. Sweat equity is commonly found in the family business world, and it is a term that is well known to generations of hardworking farmers.

In this episode, Tracy and Michael discuss this very important topic and cover the following points of interest:

- Michael shares his definition of sweat equity.
- He shares the two most common reasons why sweat equity occurs. - Tracy asks Michael to speak to the connection between farm profitability, accepting a returning family member, and sweaty equity.
- Have you ever wondered if there is a way to measure and value sweat equity for estate planning purposes? You bet there is, and Michael’s shares the calculations and how it can be applied within a farm business scenario. He also shares some additional factors that may affect the calculation.
- He cautions our audience about the two main dilemmas that arise when calculating sweat equity and what to do about them.

Are you part of a multi-generation farm family and curious about handling and fairly compensating family members for their sweat equity contributions? If so, you will not want to miss this episode.

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