Online Investment Education
for Farm Households
Jason Johnson - Texas AgriLife Extension
Ruth Hambleton - University of Illinois Extension
Bob Wells and Tim Eggers - Iowa State University
Nancy Porter - University of Clemson
The project is guided by a team of 14 members from 10
states and USDA/CSREES.
http://collaborate.extension.org/wiki/OIE_Team
Percent of Agricultural Producers Experiencing Financial
Stress Now or Will Within the Next 3 Years
40%
Experiencing Stress Now
Will Experience Stress – Next 3 Yrs.
40%
35%
35%
30%
30%
25%
25%
20%
20%
15%
10%
Nationally
15%
Texas
10%
5%
5%
0%
0%
Nationally
Texas
Changes in Documentation Required of Producers
Requesting Financing from Lenders in Recent Months
57%
59%
25%
17%
17%
17%
7%
1%
Decreased
No Change
Nationally
Increased Slightly
Texas
Increased Substantially
• Investing for Your Future
• Online Investor Education for Farm
Households
– Financial Industry Regulatory Authority
Investor Education Foundation
• Annie’s Project role in piloting IFYF for
Farm Families
Farm Crew:
Tim Eggers, Ruth Hambleton, Bob Wells, and Jason Johnson
What We’ve Learned – Internet Access
What We’ve Learned – Internet Usage
What We’ve Learned – Products & Investments
What We’ve Learned – Investment Portfolios
Asset Allocation
and the
“Lessons of Monopoly.”
IFYF for Farm Families Units 1-11
Increased confidence in off farm investment principles and products
Activity #1 - Complete the Emergency Financial First Aid Kit.
Objective - Identify and organize all pertinent financial documents.
This serves as a checklist, record, and organizational tool for important
accounts, contacts, account numbers, and policies. Beneficiaries are
reviewed for relevant accounts.
Activity #2 - Complete an Integrated Business Balance Sheet &
Personal Net Worth Statement.
Objective - Combine personal and business assets/liabilities so that
personal and business asset allocation can be examined separately or
together.
Activity #3 - Complete the “Ideal” and “Current” Asset Allocation Review
Objective - Review alternative asset classes in a portfolio approach
framework. Compare desired asset allocation strategy with current asset
allocation strategy to identify possible areas to expand investments to
become more diversified.
Ideal Allocation
Current Allocation
Activity #4 - Complete the Estimated Expenses & Emergency Cash Reserves Worksheet
Objective - Estimate monthly family expenditures and identify the appropriate emergency
cash reserves to be retained in readily available savings accounts.
Activity #5 - Evaluate “on-line” and “brick and mortar” money market, certificate of
deposit, savings, and checking account options.
Objective -Identify the most appropriate source for providing these services. Identify
higher-interest earning accounts and institutions compared to existing providers.
Activity #6 - Obtain a free credit report detailing personal credit history and credit
accounts.
Objective - Examine credit history, open lines of credit, available credit limits, and
current balances related to personal financial accounts. Check for errors and inspect
all current liabilities.
Activity #7 - Obtain UCC (Uniform Commercial Code) Lending Records
Objective - Search UCC Records to determine if personal or business property has
been pledged or is encumbered. Use UCC records to discover the availability of assets
for attachment or seizure and the financial relationship between entities.
Activity #8 - Objectively Evaluate Insurance Needs (life, health, disability, etc.)
Objective - Assess insurance needs. The emphasis here is to determine your needs
and then practice consumerism to find the best provider and cost combination.
Activity #9 - Complete the Investment Risk Tolerance Quiz (for each financial decision
maker in the family/operation).
Objective -Assess risk tolerance for those instrumental in the financial responsibilities
of the family and business.
Activity #10 - Evaluate local brokerage and “on-line” discount brokerage options.
Objective -Evaluate the alternative brokerage options to facilitate investments in
bonds, stocks, exchange traded funds, and other investment assets “off the farm.”
Activity #11 - Complete the Retirement Estimator for Farm Families
Objective - Estimate the income needs and potential sources of funds for a
comfortable retirement.
Activity #12 - Evaluate alternative Individual Retirement Account (IRA) types for
individuals and alternative retirement plans for businesses.
Objective - Compare retirement program type details to ensure that participants are
utilizing the most appropriate plans for their individual and business circumstances.
Activity #13 - Complete the Estate Planning Questionnaire and Farm
Asset/Management Transfer Plan
Objective - Assess the current value of the estate, titling of assets, and communicate
farm asset management plans.
Activity #14 - Evaluate Potential Financial Advisors using the Financial Advisor Questionnaire
Objective - Evaluate the credentials, services, and compensation basis for potential financial
advisors. This activity will help you make informed decisions about engaging a potential
financial advisor based on the information they provide.
What are we evaluating
• Effectiveness of the online curriculum for
its users
• Overall design of the online program
(simplicity)
• Activities contained within online program
• Content of the program relevant to the
topic
• Navigation and instructions of the online
program
• Logistical and performance items of the
online program
How will we evaluate
Participants
Emailed an
invitation to
complete a 25
question survey
Facilitators
Follow up phone
interview
March-May 2009