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American greedthic

Smile. You've got gas (and oil)

American_Gothic embodies the Spartan and honest life “out on the farms” as The Great Depression was steamrolling across the U.S. and much of our planet.

In today’s Great Recession, or its recovery stage depending on who you believe, life on some of Ohio’s family farms may be getting considerably easier. At least that is according to Crain’s Cleveland Business1(April 23-29, 2012, issue) in its front and center page one story “Fast to the Farm.” That article features yet another parody of American Gothic2 this time with U.S. currency attached to the pitchfork.

The gist of the Crain’s article is that these farms, which usually have to go back decades to find very profitable times, are suddenly finding themselves flush with cash. That is a wonderful problem to have and more power to them for having it! HOWEVER it can also be a recipe for horrors. Because of the decades of middle-class or lower living, these Nouveau_riche may very well not know the best ways to manage such funds or even the best ways to be paid. Problems range from outright fraud to tax booby traps. History is replete with examples of both by people who thought they knew better.

Prices for the subsoil rights often exceed $5,000 an acre and it is not unusual to have at least close to 200 acres. Then there is the royalty income as the gas or oil is extracted. There are tax ramifications to this type of income and that can be pretty technical. For instance, when this Examiner managed an H&R Block office, some clients came in with this type of income. Their returns had to be prepared by personnel with special training using specially programmed computers.

Financial adviser types in and around eastern and central Ohio are swooping in on these nouveau riche and doing all they can to grab these fortunate landowners as clients. Some of these financial adviser types are legitimate and competent financial advisers and managers (this Examiner knows one of those mentioned). But it is a sure bet that there are some who might as well be scam artists with impressive sounding initials after their names3.

Unfortunately there is no way to tell who is legit and competent versus who is basically a scam artist. But in this case of new found “instant” wealth, the adage that about looking too good to be it probably is, is even harder to apply. That is because of the psychological effect of the new found instant wealth.

1=Readers can try but there is only a limited amount available for free.

2=American Gothic, the original is pictured above, is unquestionably one of the most famous American paintings. It is also one of the most parodied pieces of art ever and quite possibly the most parodied American painting.

3=Perhaps the credential most needed is CFP for certified financial planner. One link that might be helpful is to the CFP standards board


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