Quote for the Day

“A good plan today is better than a perfect plan tomorrow.” 

George S. Patton

Water Rights and Water Wrongs

A very interesting article about water at ProPublica.org
. Essentially, the pieces asks whether Wall Street–the good guys on Wall Street, of course–will help us achieve this:


[Hedge Fund manager] Disque Deane . . . supports the idea of setting aside what policy makers call “lifeline supplies” to guarantee households some minimal amount of water. But he says if markets jack up prices on higher levels of consumption, that may not be a bad thing. Anyone who wants to fill a swimming pool, water a golf course, or use billions of gallons of Colorado River water to grow cotton in the Sonoran Desert, he says, should have to pay for that privilege.

without our farmers and ranchers and small town America ending up like this:

Eventually, though, Crowley County passed a point of no return. With so much water gone [because farmers had sold their rights for the high prices offered], the empty irrigation ditches didn’t work; one lonely farmer at the end of the run would see all his water soaked up by the soil long before it ever reached his farm. And with fewer and fewer farmers around to share the expense of maintaining the ditch systems, the cost kept rising. Farmers had little choice but to sell, and all but 11 in the county did. The place literally dried up.

Kneeling in his driveway changing a truck tire last summer, Tomky’s son-in-law Matt Heimerich recalled what the town had lost. Though tens of millions of dollars in water rights were sold, few of the proceeds were reinvested in the community, he said. One by one, families moved away. The tomato and sugar factories shut down, and without goods to ship, the railroad stopped sending trains through town. Ordway’s car dealerships closed, and the tractor store went bankrupt. As though someone had pulled a bottom block out from a Jenga tower, Crowley County fell into an inexorable collapse.

“I couldn’t have eaten enough Prozac,” Heimerich said.

We don’t take water as seriously as we should. I think that’s self-evident. And pricing water differently and more sanely is, in theory, a good idea, so that we begin allocating it better than we do. But. There is always a but. And right now, I don’t know what comes after the but.


I know I don’t want farmers, ranchers, and small town America to disappear. Oh, and water rights are assets, assets that, as this story makes clear, are becoming more and more valuable as I write this. Assets that warrant good estate planning to preserve them for future generations. So there’s that.

On a related note, if you’re interested in water and water issues, may I recommend the always interesting podcast, Water Values hosted by attorney Dave McGimpsey? I discovered about a year and a half ago and listened to it regularly as I ran. As I ramped up my estate and business planning practice, I stopped listening, intending to return after I had things moving along in estate planning. I’m thinking it’s time to begin listening again, especially since farmers and ranchers make up such an important part of the two, dry, Western states that I serve.

Employee Background Checks: Be Careful Out There

Here’s an interesting podcast about the do’s and don’ts of employee background checks under the Fair Credit Reporting Act or FCRA. Enjoy now and avoid problems later.

A Suggestion or Two on Going into Business with a Friend

You and a friend think you want to go into business together. Maybe you’ve even decided as much–or are at least pretty comfortable with the idea. You feel compatible with one another. He has talents you don’t have. You have talents he doesn’t have. Together you would make a great team. Or would you?

May I make a few suggestions about what you should do before you ink a deal that puts your time, money, and reputation on the line with this would-be partner? And can I say that what I’m about to tell you applies whether or not the potential partner is your brother or sister, your best friend or recent acquaintance, a man or a woman?

1. Act like a banker. If you were going to take out a loan with your local bank, your loan officer would want a loan application, a balance sheet and income statement. She’ll want your last two or three years of tax filings. In some cases, she’ll want a cash flow statement. She’ll pull a credit report. If she’s good, she’ll check you out four ways from Sunday, and finally–if you’re lucky–she’ll have you sign on the dotted line–on the line at the end of a loan agreement and probably on a line at the end of a collateral assignment. And she’ll have some confidence that you’ll pay the loan back because she’s checked you out so thoroughly. IMGP1526

Should you or can you be so thorough with your potential partner? Yes. And he should be with you as well. I know of someone who was about a year into a partnership when he first learned that his partner hadn’t filed his personal income taxes for five years. A couple of years later the tax man (actually woman) descended on the delinquent partner and the firm’s business. The result was ruinous for him and very damaging for the partnership. So, act like a banker and know who you’re dealing with.

2. Go trippin’. Want to know your partner even better? Go on an extended trip with him or her. Doesn’t have to be far, but it should be for at least a week and require you to spend much time together in all sorts of situations, situations that will expose his and your irritating habits. By the time you return, you’ll know how he handles money, whether he’s a penny pincher or a spendthrift. You’ll have a better idea of his character, whether you can trust him to tell the truth or count on him to lie, even about the little things. And you’ll be in a better position to decide if that partnership is such a good idea.

3. Be clear and realistic about profit sharing. Before you go too far, make sure you both are clear about how profits will be distributed. I was partners with my brothers in an insurance agency years ago, an agency where the income flowed completely from commissions. Before we joined forces, we settled on a compensation scheme that we all thought was fair and which we hoped would avoid hard feelings. Basically, we decided to split all commissions three ways. We did this for reasons I won’t go into here. What we didn’t think hard about enough was whether that split would incentivize good work habits, whether it would get us all out the door and seeing the people. I know we all assumed that we would all work equally hard. To put it mildly, that was unrealistic of us.

We were three almost completely different persons. One of us was a great life insurance salesman, an area of relatively high commission per sale. Another was more interested in selling investments, an area where commissions per sale tended to be smaller. And me, I fancied myself a salesman, but I was more of the technician, the behind-the-scenes guy who designed the cases and made sure the details were taken care of. In other words, though are commission split was good in theory–the theory that said we were all going to sell a similar amount of insurance and investments–in practice it was very unrealistic. Problem was that once we started down that road, it was hard to change our arrangement. As a consequence, our partnership was not as profitable as it might have been. So, think about compensation and profit sharing really hard–and be realistic.

5. Vacations and other benefits that can bite you in the rear. As with profit sharing, be very realistic here. Take it as a given that you and your potential partner(s) will come to the table with different expectations about work and play, health insurance and 401(k)s, etc. etc. You all need to be up front and clear about your expectations. If you’re not, trouble will ensue. Count on it.

6. Family matters matter–to some more than others. You have promised your daughter that you’d never miss a single one of her volley ball games while she is high school. Your potential partner hasn’t attended a single baseball game his son has played in. See the problem? If your approaches to family differ significantly, you may want to think twice about going into business together. That should be obvious, but to some it is not.

I could go on and maybe will in another post, but you get the idea: Those planning to go into business with one another need to have multiple intimate conversations about some very important issues. All cards must be on the table before you commit time, money, and reputation to the proposed business venture. All of them. No secrets. None.

You’ll be happier and more successful in the end if that’s the case. Trust me.


Six Things to Ask Yourself as a Business Owner

Another helpful link, this one from Northern Trust: 6 Things to Ask Yourself as a Business Owner. Sorry for the quick spate of links to videos and webinars. I happen to be on the look for something else, and found these instead. I thought they may be of interest to my readers. This one is short–about 2 minutes–but the six questions may prompt you to think more deeply about what you want to do with your business. Enjoy.

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