Dad's wisdom with Moe Russell, author of Take the high road to personal accountability

Chris: We are grateful that you are joining us for another episode of the Ag View Pitch, as we know that your time is very valuable. Our team at Ag View Solutions is always here for you for any questions or comments that you may have. Please feel free to reach out to us at cbarron@agviewsolutions.com. And now here is your host, Chris Barron. Welcome everybody to another episode of the Ag View Pitch, and we are excited to introduce to you Mo Russell. He is with AgShurion and is is a great friend of mine. He has been a mentor of mine, and we're going to do a Dad's Wisdom that I think you're going to want to listen all the way to the end because it's going to be a great one. So with that said, Mo, how's it going?

Moe

Russell: Great, it's a pleasure to be here, Chris.

Chris: Well, it's good to have you here, and I'm super excited about this conversation. I want to start out by saying thank you to you. You've been a great mentor in my life. You were our consultant in our farm operation for a lot of years I learned a ton of stuff from you, and, and I just wanted to start out by saying that. I didn't tell you that was coming, but again, thank you very much. It's like when you go back to your 4th grade teacher and say, look, I, I made this work, you know, thanks for, for helping me out. And that's what I want to do is sincerely tell you thank you. It's been, it's been a great lesson of life working with you, and now I'm super excited to have this Dad's Wisdom conversation. So with that said, um, introduce yourself to the listeners and tell a little bit about yourself.

Moe

Russell: Yeah, uh, Mo Russell, originally from eastern part of Iowa. I was raised on a diversified family farm. I have 5 brothers, no sisters, and, uh, my parents encouraged me to first of all get an education. So I went to Iowa State University and graduated in ag business in 1971. And I went to work for Farm Credit Services. And I worked for them for 26 years. I started as a loan officer and when I left them, I was managing their 83 offices in Iowa, South Dakota, Nebraska, and Wyoming. And it was a great organization, great career, but I had a lifelong goal. That I wanted my MBA by the time I was 50. And, uh, I was living in Omaha, Nebraska at the time, and University of Nebraska at Omaha had a 2-year MBA program where you go to school on the weekends. And when I turned 48, I did the math and figured if I'm going to have my MBA by the time I'm 50 I better get with it. And so I did.

And there was 30 people in the program I was in. About 10 of us worked for corporate America, AT&T, Union Pacific, large organizations. About a third of us worked for other size organizations. That's when I was with Farm Credit Services. And then there was a— the last third were entrepreneurs. And I spent 2 years with different people and I really got the urge to be an entrepreneur and start my own business. And so that was the genesis of Russell Consulting Group. We started it in September of 1998 with essentially no money. My partner and I each put $500 in the bank And we never borrowed a dime and sold the business and it was very successful. And so I still handle clients. It's called AgSure now, but it was originally Russell Consulting Group. And I still handle clients for them on a commission basis. So— It's, uh, it's been a great ride.

Chris: So— oh, go ahead. Well, I was just going to ask, uh, so are you retired or are you not retired?

Moe

Russell: Uh, I tell people I work half days now.

Chris: Okay.

Moe

Russell: I work from 7 in the morning till 7 at night, and the other half a day is all mine.

Chris: Oh, okay.

Moe

Russell: Well, no, I— it's, uh It's— I'm slowing down, I guess. I don't like to use the word retire. I'm spending a little more time doing some things I want to, but I don't put myself in the category of being retired.

Chris: Yeah, well, you're helping a lot of people yet too, and that's really the key thing in life, right? You get what you give. That's right. Um, talk a little bit about, you know, when you were growing up, you mentioned, and I want to go back to the kind of the first part, and we're going to work through what you did, what you explained. But, you know, the first part, you have 5 brothers, no sisters. Talk a little bit about growing up in that environment. What are some of the key things you learned that you lived through that were kind of some life lessons that you carried forward growing up with 5 brothers? And I'm sure that was exciting.

Moe

Russell: Yeah, we fought a lot. Okay.

Chris: But— That's weird. I didn't know family members ever fought, especially boys.

Moe

Russell: Especially boys. But we learned a lot about getting along. And I'll share with you, we— 5 of the 6 boys are in business together with 2 hog production companies and the family farm. And we get along great.

Chris: And you grew up?

Moe

Russell: Yeah, grew up. And 3 of us own a condominium together in Naples, Florida. And all of our friends, when we entered into that venture, all of our friends said, that's the dumbest thing I can ever think about doing. You people will end up killing each other. You can't get along. And if the brothers get along, the wise probably won't, and we all get along great. And I think that is, uh, I think what we learned growing up in a large family and on a farm, we've taken those skills into our personal and business life.

Chris: Yeah, that's key. So, um, give me some examples, or give the listeners some examples of your parents growing up, some of the life lessons of your dad. Some of the things that he would have, would have taught you and led you down certain paths?

Moe

Russell: Yes. Uh, one thing I learned from my father is the importance of character and integrity, and with some real-life examples. One of my heroes is Peter Drucker. And he says that character and integrity by itself accomplishes nothing, but its absence faults everything. And I've never forgotten that. And one thing my father did was he loaned a neighbor a hayrack, and my neighbor— there was a faulty board in it. And nobody knew it, and my neighbor fell through it and wrenched his knee and ended up suing us. And the neighbor, we went to church together, we were friends, and he went to my father and said, you know, if you just admit that the board was faulty, we can collect the insurance and live happily ever after. And that was, uh, my father said, no, if I knew it was faulty, I would have never loaned it to you, and I'm not going to admit something, uh, that's not true.

And that was my first real life— I was 12 years old at the time, and that was my first real life, uh, lesson about character and integrity, uh, because When it's all done, that's all you have.

Chris: Yeah, yeah, money only goes so far. That's right, right. That's awesome. So, um, talk a little bit about your experience in lending. So you were with Farm Credit Services, you said, for 26 years. Um, talk a little bit about some of the things you learned there that would be useful to the listeners from a dad's perspective, right? Because you saw a lot of farm operations, you saw a lot of, probably a lot of transition, a lot of things that worked well, a lot of things that didn't work so well. What are some of the lessons learned there?

Moe

Russell: Well, during that time I spent with Farm Credit Services, we went through the farm crisis of the early '80s, and I learned a tremendous amount, uh, through that. Uh, and, uh, in fact, I was just talking to one of my clients, uh, Monday, and, uh, we was talking about his, uh, two boys that are farming with him, and he said, you know, uh, they just don't seem to have the passion and the drive, uh, and the get up and go, uh, that I think they might. And I said, well, one thing you need to think about is they've never gone through some of the times we're going through. For example, inflation. We haven't had inflation like this for 40 years, right? And if they're less than— if they're 45, 48, 50 years old or less, they've never experienced that, right?

And so, uh, that's one nice thing about being a dad and having a lot of experience is you can share some of those experiences, and, uh, it's been very valuable.

Chris: Talk a little bit about that. You know, you said you went through that, that time frame. That was tough, right? I mean, there was farmers that were no longer farmers, right? Didn't make it through. There was some that, that did make it through that had to do some hard things too and really make some changes. What are some of the things that are lessons there that might apply today? Because, you know, we are, we are in an interesting position now, right? I was just showing you kind of offline. I mean, I would argue right now as we record this here in April of 2022, we're looking at an inflation rate, you know, and this is my number, but it's 18%. I don't care what the government says. I've got numbers. I'm seeing what people are spending.

Moe

Russell: Yeah.

Chris: That in conjunction with interest rates going up, they're— at least the Fed's telling us we're going to see interest rate increases What things do farmers, from your perspective as a dad and as an experienced, you know, lender and consultant over all these years, what are some of the key things we need to be watching for and paying attention to?

Moe

Russell: First of all, I think it's important that you know your numbers. The farms that got into financial difficulty, things were too good during the period of the late '70s Uh, and that was an inflationary period when the commodity prices were high, like now too, right?

Chris: Yeah.

Moe

Russell: Okay. And it was kind of easy and fun to make money, and I think a lot of farmers over-expanded at the time, uh, acquired too much debt, and then interest rates, uh, skyrocketed, and they essentially went broke. And the challenge we had was to try to work with them and correct their problems and help the operation survive. And we did a lot of them. And quite frankly, a lot of our original customers in Russell Consulting Group were essentially broke. I mean, if you valued their property at what it would sell at an auction in those particular years and subtract their debt, they probably didn't have any net worth. And as I look back, those people that developed a plan, knew their costs, did a good job of marketing their products, and knew their numbers from a balance sheet and income statement perspective, they have accumulated unbelievable wealth today.

And that really makes me feel good that we helped those people because I think Without somebody to help them, they would have been a casualty and wouldn't have survived that period of time.

Chris: Yeah, sometimes that third-party perspective gives motivation that otherwise might not be there, especially when there's multiple people in the operation. They don't listen to each other like they should sometimes, right? And when you show up, you can cohesively bring them together. I mean, you did that in our operation. You helped us. My brother-in-law and I are different people. We make decisions differently, and I think you were, you know, being that third party coming in really helped, helped us communicate better in a lot of ways. Yeah. One thing, there's a couple of terms that you coined that, that I give you credit for, and I would like to ask about too in this Dad's Wisdom of— you would used to use the term a lot, and, and we were probably one of those operations that was not super good financially when we started working with you.

We had a lot of improvements and a lot of things to change and do to make our operation better. And you always said, you know, you need to bulletproof your balance sheet. That was one of the things you always said. What— what— explain that. What— what makes a— what— how do you get your balance sheet bulletproof?

Moe

Russell: Uh, the first task in bulletproofing your balance sheet is to build working capital. Working capital is a first shock absorber, uh, if your farming operation goes through bumps in the road. It's the first shock absorber. And having a good amount of working capital, what we encouraged our clients to do was to have 50% of your total annual expenses as working capital. And the difference between working capital, or working capital by definition is the difference between current assets minus current liabilities. The second thing is overall equity. It, it's when it gets below 40%, in some cases maybe even 50%, there's a— and we used red light, yellow light, green light system— when it gets below 40%, it's probably a flashing red light. Now that doesn't mean you won't survive. It just means that if you experience adverse times, you just don't have much to fall back upon in equity.

So bulletproofing your balance sheet is really quite simple. Improve working capital and keep your overall equity above 50% and debt levels below 50%.

Chris: Okay, and then with that working capital, where does cash flow fit into that?

Moe

Russell: Cash flow is income minus expense, all expenses including debt payments and family living. And one thing we see operations oftentimes don't know or don't figure is what their cost of living is because it comes out of the cash flow, right? And it's an expense. And so Cash flow to build working capital needs to be positive, and, uh, that either means increasing income or reducing expenses.

Chris: We've put that into Profit Manager's titled Return to Management because that is an expense, you know, and I learned that from you, so I'll give you credit for that. I mean, years ago, it's like part of the cost of production is paying yourself.

Moe

Russell: That's right.

Chris: And, and if you don't do that, then you're You want to work for free, or, you know, right?

Moe

Russell: So, and, and in that return to management, it's really a return to the capital you have, net capital you have invested in the business, right? And you need a return on it or you won't be in business.

Chris: Exactly. So, um, you talked about leaving, keeping that equity position strong, keeping the working capital strong. Um, I'm going to quiz you because of the a little bit more than this Dad's Wisdom than I would on just the dad stuff, on the financial stuff, because I've got a financial, you know, high-level financial person sitting here in front of me. So when you look at the equity position that a lot of farms are in right now, they're in pretty good equity position, especially the majority of the operations we're working with have increased and improved their working capital to a large extent as well. We've had 2020 was pretty— ended up being pretty good, even though when we started 2020, it didn't look like it was going to be very good. It ended up being financially pretty solid. 2021 was extremely good, and it looks like '22 will be pretty good.

So when you get a string of those and you improve working capital, at the same time we're seeing these inflation rates we just talked about, we're seeing interest rates go up, and there's an, there's an enticement to buy more land. Farmers want to buy land. How do you manage that desire to buy the land but make sure you're doing it in the right way and that you don't get yourself in trouble on the working capital or the equity position? What— any thoughts there?

Moe

Russell: I think farmers should view land as an investment. It's just like if they have their retirement fund in stocks and bonds and other investments, land is, is traditionally been a good investment for years. I think if they remember that, and not acquire too much land, particularly with debt, they won't get in trouble, like, like they did in the '80s. Because land values have gone up so quickly that it's very difficult to pay for these land prices by just farming the land. Mm-hmm. You got to have other land that's probably clear or very low debt levels to help pay for that. And that's okay if you look at land as a part of your total portfolio investment and not something you just use.

Chris: Mm-hmm. Gotcha. So basically, to summarize what you're saying, you keep the equity position strong, keep the working capital position strong, and watch that really close along with the cash flow. You know, I think you told me one time, you know, when we start investing in shiny stuff, sometimes we look at different things. And I mean, I made the mistake of making an investment out of state, and then, you know, and I think it was you that told me, you know, put all your eggs in one basket and watch that basket real close. Was that you? Told me that.

Moe

Russell: Yeah, and, uh, I see two big challenges for farmers today, particularly the large ones. They're running huge businesses, and I think oftentimes, uh, something that, that is very productive is make sure you know your numbers. Do a market value balance sheet every year. Do it accrual income statement every year and really drill down and look at those numbers. Oftentimes, uh, we don't spend enough time doing that. The other thing is transition planning. I think just in working with farmers for 50 years, it's the biggest problem in production agriculture. And it's more difficult for people that have been very successful because they, they have a hesitancy to let go of, uh, and they need to transition first of all management, uh, and then transfer assets, and thirdly then do estate planning, right?

Chris: Yeah, and maybe start it a little earlier than what You know, a lot of times I think people think, well, you know, I'm going to do it next year, and all of a sudden 5 or 8 years or 10 years goes by, right? And next year is all of a sudden here.

Moe

Russell: Yeah, absolutely.

Chris: So, um, you talked about goals. I'm going to come back to that, but I also want to talk— you know, you had mentioned, you know, you kind of had some goals from the Farm Credit thing. I think we've pulled some good lessons out of what you learned over the years with Farm Credit and working with producers. I want to circle back to the family life again for a minute because I think that's real important to understand. Talk a little bit about— you've got a wife that's been extremely supportive in everything you've done, I think, as well. Talk a little bit about your wife and your family.

Moe

Russell: Yeah, be glad to. We had an adversity in our life. We had a 20-year-old son that was killed in a car accident, and it's something I— we didn't particularly enjoy going through it, but you don't have a choice, right, in some of those cases. And when our son was in 6th grade, he had a challenge, and The school said they thought he had a learning disability, attention deficit disorder, and manual dexterity problems. And my wife Marty, she says, I just don't believe that because he's a very accomplished drummer. He could play Wipeout when he was in 6th grade, and he could play with Logos Legos and build very elaborate things for hours and hours and hours. So he didn't have an attention span problem, and he didn't have manual dexterity problem. And so, in fact, the school system was thinking about putting him in special education classes to deal with that.

And Marty said, let me work with him. And so I was right working for Farm Credit right in the middle of the farm crisis and didn't have as much time as I wanted to spend with him, but she did. And she worked with him. To make a long story short, he went from 6th grade and accomplished— he was pretty much an A student in 7th and 8th grade and did very well in high school. And what I learned is Don't give up on people, uh, no matter what your friends and relatives and acquaintance may say. Don't give up on people. And that's what I learned from my wife.

Chris: That's awesome. That's, that's a great story. Um, talk a little bit, if you don't mind, tell us a little bit about the experience losing your son. I mean, that's a terrible thing for anybody to go through, but I think it's it's healing for people too. And, and, um, talk a little bit about, you know, some of the things that came out of that.

Moe

Russell: Yeah, uh, one thing I've felt very strongly about in my life is if you encounter adversity, uh, one of the things far too many people do is when they encounter adversity, their first reaction is, who can I blame? And In fact, that's very natural. The first two people on Earth, what happened to them when they got in trouble? The man blamed the woman.

Chris: She did it.

Moe

Russell: She made me do it. And the woman blamed the serpent. He made me do it. And that's been happening since the beginning of time. And so I made a commitment early in my developmental years is not to start blaming someone. And when we lost our son, he was with a group of about 10 friends the night before, and the accident— it was a car accident. It was his fault. He was driving too fast. And the entire group of his friends that he was with that night were in the emergency room at 6 o'clock the next morning. When we got to the hospital. And one thing we did, and I didn't consciously do this, I was operating on autopilot. I looked at all of those young men and women and I said, "Marty and I want to tell you one thing. We don't blame any of you for what happened tonight." I said, "We raised Jared to be accountable for his own actions." And he took the rap for this one.

And, uh, uh, that, that's helped us through that transition. Yeah, a lot, because it's a very difficult time, right?

Chris: Yeah, I appreciate you sharing that because that's a, that's a key thing in life, right? I mean, um, accountability in, in what we do in life and the choices we make. Have a definite impact.

Moe

Russell: Yes, absolutely.

Chris: So, and I appreciate you sharing that too, because I think that, that sends a message to a lot of us that's very important. Also, I guess what I would like to do is have you talk a little bit more about the book you wrote. That's on Amazon, right? Yes. And that— what you just told is in there, and there's some other really good lessons. Talk a little bit about, about the book and some of the things that you've got in there.

Moe

Russell: Uh, the genesis of the book came from my observation of watching people's behavior in their personal life and in their business life. Uh, I think we have almost— it's almost like a cancer in our society today the, what I call the victimization attitude, or woe me, when something goes wrong. And it's like I mentioned, people incorrectly and to their detriment, when something— when they approach adversity, their first reaction is, who can I blame for my problem? And And I think oftentimes we can all grow personally if we look in the mirror when we ask that question and say, "I think I see the problem." And so that was the genesis of the book. And what the book does is I share a lot of personal stories and business stories that I've learned.

And, uh, it was almost a relief to write it because I kind of had the feeling that, you know, if this helps somebody, uh, I've accomplished something, right? If I never sell a book or if I never get huge royalties or things like that, that's not what it's about. Yeah, it's about helping somebody, right? And I think it has.

Chris: That's awesome. What's the name, title of the book? And if somebody wants to look it up.

Moe

Russell: Yes, it's by Mo Russell, M-O-E, my nickname. And it's— the title is Take the High Road to Personal Accountability.

Chris: Okay. Take the High Road to Personal Accountability. And that's on Amazon, right?

Moe

Russell: Yes.

Chris: Yep. Awesome. So people can definitely need to check that out and grab that if you can. You talked about the importance of giving. Talk a little bit about that. I mean, we get what we give in life. Any, any lessons there? You know, I think one of the things that we see, and I'll throw this out there and I'll give you the question back again, but is it's hard, I think, a lot of times in transition for the exiting generation to figure out what the right approach is? Because you're going to have a lot of families have actively engaged kids, non-actively engaged. They want to be fair, they want to be equitable, and they want to give. But on the same token, there's probably a situation where, you know, fair isn't equal and equal isn't fair. That's right.

You know, talk a little bit about that and transition in any things that you've learned as you've watched some farms that have been able to successfully transition.

Moe

Russell: Yes, uh, and you mentioned an excellent point. It's not all about money. It's about— and I know in your work with your clients, you talk about their core values. That's really important. And when people do a good job of examining their core values, a lot of times making a lot of money is not— might not be, might not be. And oftentimes I see people spending 90 or more percent of their waking hours just on a mission to create more wealth. And my wife Marty and I read an interesting book just this month called The Generosity Habit, and it's written by Matthew Kelly, and he's written several books. And it's a very quick read. But it's excellent about generosity. And being generous may not mean giving people money or things or like that. It may be giving your time and your talent. And I know in your business, you know, I've heard you say, you know, it's not about money.

I want to help people, right, be successful, right? And I think that, uh, that's commendable.

Chris: Thank you. Thanks. Yeah, well, and I, I've had a good mentor, so you've— thanks, thanks for that part too. Um, I guess I, I'm getting to, to where I want to get towards the wrapping things up, but you mentioned something early on about setting goals, and there's, you know, quote unquote SMART goals, you know, that are specific and all that and, and really dialed out. Are there any, any things that you've seen over the years, again, as a dad, as a, as a mentor, as a consultant, as a lender, that has stuck out to you that are some goals that, that really make a lot of sense in the farm industry or some things that we really should be striving for? I mean, you talked about the important stuff, right? Quality of life, family, all of that. Um, yeah, that's a great wrap-up with that.

Moe

Russell: Great question, Chris, and I'm glad you asked it. Uh, in my book, I, I share this story. Uh, in 1951, a group of researchers interviewed the graduating class from Yale University, and they asked them a series of questions, but they mostly centered around, do you have written goals? 4% of the grad— people in that 1951 graduating class had written goals. 20 years later in 1971, they interviewed the surviving members of that 1951 graduating class from Yale University. And the 4% that had written goals had accumulated more wealth than the other 96% combined. And that really left an impression upon me. And I've had written goals for my entire life. I mentioned the one about MBA. And I think that is the best advice dads can give their kids. They need to determine what the goals are. But if they write them down, there's a very, very high likelihood they're going to accomplish them.

Chris: Yeah, now that's, that's super advice because getting that, writing it down and, uh, looking at it and making sure it happens, and accountability to that too, I think is a key thing, isn't it?

Moe

Russell: Yes.

Chris: So, all right, well, um, I think we're getting about wrapped up. That was a really good, good place. Um, anything else I, you know, anything else you can think of that, uh that sticks out to you that you would like to leave the dads with or the sons with or the farmers with as you, as we wrap up here?

Moe

Russell: I don't believe so, Chris, but I really appreciate the opportunity to do this and to work with you.

Chris: Thank you. Yeah, appreciate it. Thanks, Mo. Mo Russell and Russell Consulting Group and AgSureon. And I'd like to thank everybody for listening And we will catch you again in another Dad's Wisdom next time and catch you on the Ag View Pitch.