Teak and hardwood plantation. Managed forestry companies contract to grow selected species of tropical hardwood trees from seedlings. The payoff for clients begins at about eight years after planting and ends when all the contracted trees are harvested. As the trees grow, they accrue dividends of size and quality.
Profits look good, compared to what the equity markets or savings accounts are offering, and the risks are minimum. As an example, if you were to put $3,997, the price of 100 teak trees, into savings or CD’s today at 5% compound interest and allowed the interest to accumulate for 25 years, you would have a total of $13,535 at the end of the 25 years.
That compares to the approximately $118,000 projected cumulative net harvest proceeds over the next 22 years from planting 100 teak trees.
I think it is a great alternative to insurance for people who don’t believe in interest. I have invested 8k (200 trees) for the two children I plan to have instead of buying insurance for them. Yeah yeah, I know, I need to be married before I have kids but forward planning doesn’t hurt. This money can be used towards their higher education. 4k is a small amount now, but 118k when the kids are in university will be a huge support. My plantation is in Costa Rica and I plan to visit the farms sometime late this year or early next year.
There is also some land available for sale in Honduras if anyone wants to start such a business. Personally I am not interested in Honduras as the political climate is very volatile there compared to Costa Rica which is probably one of the most peaceful South American countries.