You have worked as an investment banker in New York and Hong Kong for the past five years. You are tired of living in populated cities . The Wall Street Journal contained a story about the federal governments actions to increase corn based ethanol as a substitute for gasoline.
According to reports, new ethanol factories will be constructed by the hundreds over the next decade. Demand for corn fuel is expected to soar. Based on a Web search you found 80 acres of prime farmland for sale in Illinois at a price of 10,000 per acre. You have saved enough from your past bonuses to purchase the land. You are tempted to quit your job and purchase the land to farm corn.
Colleagues have stated that it is a good idea. Not only can you move to new area, but a great business opportunity, with little risk. Surely the price of farmland will increase dramatically over the next few years as ethanol plants begin operating. Good farmland is limited, and you might expect its price to double or even triple over the next few years. You are smart and should be able to learn the farm business very quickly. in addition, you will have a cost advantage over farmers who wait to buy land at much higher prices. If you decide that you do not want to be a farmer, you can always sell the land at a "huge profit". Do you think your colleagues are giving you good advice?
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