Because of the cyclical nature of commodity prices, weather, interest rates, booms and bust you should always look to build off farm investments. In the current economic climate you don’t want to be where global debt is and that’s real-estate and the stockmarket. Farmers must stop doing things for a Tax deductions, it’s a fast way of going broke.
First you should build up cash reserves through “Farm Management Deposit” which can be opened at CBA. The Farm Management Deposit Account is a tax-effective investment that allows primary producers to set aside pre-tax income in good years to establish cash reserves and help meet costs in other years.
It allows for the deduction of the amount of deposits from assessable income, with interest paid on 100 per cent of eligible deposits. Both fixed term and at-call options are available. To open a Farm Management Deposit Account, you must meet special legislative requirements.
Second, there nothing wrong with cash, expect if you were in a basket case place like the USA. Cash in down turn increases its purchasing power as assets fall in value. You can earn more as interest rates increase as well. I'm looking forward to 18% of higher.
Third, you would do to look at investments that do well when countries like the USA prints money. The US is printing money like crazy as did Germany did in 1923.The people who got out of Germany and protected their wealth were people who bought rare stamps, investment art, antiques and rare coins. We have a great company here in Australia that will buy you investments back at the increased value after held for twelve months. Compounding growth has been 13 to 15% for the last 41 years. Always go with the trend as Gann would say.
For more info see Off-Farm Investments