Its an unfortunate truth but I have yet to meet a farmer that did not at one time or another have a reliable source of off-farm income. Since this is an important part of the process of saving up for your farm and during the start-up phase of your farm, I have a couple of factors that you should consider:
- Pay per hour
- Hours of work
- Commuting time
IMPORTANT: If your dream is shared with your partner to one day own a farm, sit down and figure out which one of you is going to primarily work off-farm. When there are two of you, you can be more flexible with some of the guidelines including the hours worked and commuting time. Once you start operating your farm, working maximum overtime is a one-way ticket to burn-out or an accident if you are doing this alone. You’ll need some kind of support on your farming journey regardless of whether that’s family, friends or a partner.
Pay Per Hour Worked
When you are looking for a good source of off-farm income, you want to consider jobs that pay well over minimum wage with full-time employment. This job has to be one where you can achieve the education requirements. Look outside of agriculture for high skilled jobs that have opportunities in rural areas. Many times there are skills and benefits in jobs outside of agriculture that will help you in your farming career. Welding, mechanic, accounting and nursing all have skills that help you in the long run.
You want to look for jobs that pay $40,000 or more within 2 years of experience. Ideally, this job would have normal hours that do not require a constant commitment of overtime. You want to maximize the real hourly wage that this job can earn you for every hour away from the farm. The Frugal Engineers have a great number of examples of how to calculate the real hourly wage. If you are in a partnership, the person working off-farm should be the one who can earn the highest real hourly wage.
Real Hourly Wage
The real hourly wage starts with what you are paid per hour of work on your take-home pay. It then deducts all the expenses that you have solely because of the job. I’ll run down a quick example here. For income taxes, you can use this table to get an idea of the taxes by province.
- Base Salary: $45,000 subtracting:
- Income taxes (Ontario): $7,173
- Daily commute uses $65 of gas per week plus $1,200 in repairs: $4,580
- Lunches, wardrobe: $900
- The remaining amount is $32,347
If this job requires 40 hours per week with two weeks of vacation, that is 2,000 hours of work so the real hourly wage is $16.17 per hour. If you had only considered the base salary, it looked like you would earn $22.50 per hour.
Hours of work
If the job requires 50+ hours a week, you will not have the energy or time to truly look after your farm alone. It’s definitely acceptable and I would encourage you to work maximum hours when saving up to buy a farm but the job should be flexible enough that you can also work the normal 40-45 hours per week. If you can only reach the $40,000+ salary by working 12 hour days, look for a different job in the long run. If you work crazy hours and then try to run a farm on top of that, something will eventually suffer.
Burning the candle at both ends is not sustainable. Farming is generally long hard hours so if you need off-farm income, it needs to have a much higher pay per hour for every hour worked so that you don’t need to work ridiculous hours. As an accountant, I do work long hours from January to May. However, that is only part of the year and as compensation, I get decent vacation time to offset those hours. I would not be able to sustain the hours worked during the tax season on a permanent basis.
It also helps if the hours of work are predictable so that you can schedule chores around the time you are gone. Unpredictable schedules can be stressful unless you are using it as a flexible way to supplement your farm income. Using flexible time and contracts to boost your income is an excellent option if you are not quite ready to work on the farm full-time.
The main reason I suggest looking for high skilled jobs in demand in rural areas is that you do need to be aware of commuting times. Commuting extends your workday and comes at a cost. I would suggest trying to limit your commute to less than an hour, ideally 30 minutes. Fuel prices and repairs to your vehicle will add up.
You will also be wasting precious daylight hours in the winter that you need to look after your farm. Working off-farm and farming is exhausting, having a long commute on top of that will increase the risk that you have an accident. You should also consider how long it would take you to get to your farm in an emergency. If you are working over an hour away and your livestock escapes, it’s going to take you that much longer to get home.
If you are building your farm dream with a partner, you can be much more flexible with this as well as considering remote jobs like northern mines which can really boost your off-farm income. When there are two of you, you can worry less about the commute time if the trade-off is a much higher paycheck.
One final factor that should not be overlooked is the enjoyment of the job. You don’t have to love the job but tolerating it is important for your mental health. Pick a job that you don’t hate and that you will not mind going to each day. You do not have to be passionate about the job but you should feel good about your career choice.
There are plenty of careers out there and dozens of tests to help you determine what you might be suited for. Don’t pick an off-farm income source that you will struggle with just because it pays well. Put some thought into your second choice for a job when your number one choice is farming as your second choice is what is going to help you build your farm dream.
Here is a brief list of careers that require a variety of education levels and make a decent wage:
- Nurse (variety of options)
- Truck driver
As the list above shows, good options are the trades, healthcare and finance. What is your off-farm career strategy?