Creating Generational Wealth: The Klump Family Ranch

Kallie Chenoweth
Timm Klump’s ranching roots run deep through generations of his family – beginning with his great-great-grandfather, John Walter Klump. With ongoing work and strong relationships, they lay the groundwork for future generations’ success.

Family is important to Timm Klump – and the Klump men who came before him as ranchers. I was thrilled to spend some time with him and hear more of the story. This long line of men worked hard and plan to pass what they’ve successfully built on to their children.

Where It All Started

Timm Klump’s Great Great Grandpa, John Walter Klump, began life in Ohio. He volunteered to fight in the civil war and after the war, moved to Texas. Subsequently, he relocated to New Mexico to start a ranch with the White family. Each move helped him hone his skills and begin to grow the family ranching legacy.

Eventually, he set his sights on Arizona. He took whatever cows he owned outright and moved to Dos Cabezas. There, most people homesteaded on the west side – but John Walter and his family started out on the south side. The cattle he bought kept trying to return to their original home on the west side! Eventually, he moved to the west side just to make them stay. Big ranchers in the area had acquired the “fancy” land in the flats. The big ranches included the Hooker Family Ranch (of Doc Holiday fame) and the Riggs Family Ranch. Because those two families already owned most of the land, they also controlled the area’s resources – including water sources. They were united on keeping out the little ranchers and preventing them from using their resources. Klump took his cattle to the mountains, where no one wanted to ranch He also worked at ranches around the area to make money.

The Later Generations

John Walter’s son – and Timm’s great grandpa – after losing his first wife, he remarried and they had many children together. They also raised goats.

Later, one of their sons – Timm’s grandfather – had to take over the family business and became head of household when he was only 12. He started managing the books. The cattle they sold brought in about $80 a year and it cost $45 a year in groceries and feed. The small amount of profit they were bringing in allowed them to get a little ahead. As his grandfather and his five brothers matured, they started using their profit to buy property . They paid for everything with cash and avoided incurring debt – including loans.

By the time Timm was born, the family had saved a lot of money. Among all the brothers, they owned the family ranch plus several others. Unfortunately, the brothers started fighting and the ranch was split up. Timm’s dad ran the ranch while Timm was growing up.

Timm Takes the Reins

Although Timm went to college to learn about ranching, but what he actually discovered is that he’d had a lifetime of learning about ranching from his grandpa. You don’t get a redo, so Timm decided that it would be difficult to make the ranch grow. He has five brothers. They didn’t have money and were barely making it. Timm thought maybe he should go sell commodities, but it wasn’t for him. He had a vision of a solid herd of cows going down a road. He wanted to build a ranch like the one in his vision – and be a cattleman. He knows that what matters is if the cow is healthy, it can maneuver tough terrain, has a calf every year and protects those calves. His cows are like employees because they make money for him – and the calves are one of the products they produce to sell. Good solid bulls and an odd arrangement of cows help keep them going.

Their goal? They want their kids and grandkids to continue to build their financial future. His dad always says to give grace and have grace for their brothers. Open and healthy communication is so important and they have a “no strike policy” with their brothers . The ranches are located in Southeast Arizona with some along the border with Mexico.

Building Generational Wealth

Grandpa said “never ever get a loan” and his Gigi (his grandmother) said “always keep good credit”. He was torn between the two. He needed capital to build the ranch of his dreams. When he tried to talk to most banks about getting a loan, they’d laugh him off. They only wanted to deal with Timm’s dad because his name was on the leases/land, but he never had credit.

Timm started by doing owner financing on the ranches they acquired at first. Small ranches. They built a big ranch little by little and by using their cattle to their advantage. They did that through leases, private loans, owner financing, etc. But they still didn’t have any operating capital. He was working cows to pay another payment on another ranch. The local banks knew his dad and didn’t like how they went off script and had a different business plan. Eventually they got a small operating loan from a bank neighbor by fixing a fence. It was financing via the good ole boy system. Timm thought that would grow their relationship, but it didn’t happen.

Timm wanted to restructure. His best friend, Sal, worked at FSA. Since they weren’t first time ranchers and they were a family business, Sal sent him to Pat (Hamilton at FFB). Pat said he would love to work with Timm and his brothers. Pat said, it all makes sense on paper and they restructured – and now they only have one payment a year to FFB.

They had money left from the restructure, so they wanted to start a healthy calf type business and a cattle trading division. Pat looked at his business plan, it made sense, and he was the first person to tell Timm he believed in him and his brothers’ ranch plans. Pat has been with them since then and has subsequently written their first major farm loan with FFB.

This is just one more story of how Pat and FFB work with people to make their dreams come true. They look to see what makes sense based on the business model and proven success. We believe in who we finance – like the Klumps – and they believe in us.

Looking to build your own family ranching dynasty? Schedule a free consultation with a member of our Farm & Ranch Lending Team.

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