5 Benefits of Investing in Teak
Teak is an incredible hardwood, as well as an incredible investment. Timberland has been a favorite investment of ultra-wealthy individuals for decades, and now it can also be yours. Find out why this beautiful and increasingly scarce tree should have a place in your investment portfolio.
- You Will Get Some of the Best Returns on Investment You Can Find Anywhere
Probably the most noteworthy reason to invest in teak is that it is an incredibly lucrative investment to make. Teak is one of the highest quality woods in the entire world, used to make such exotic products as decking for yachts and other boats, as well as high-end outdoor furniture.
Teak has a proven track record of strong growth. For instance, between 1975 and 2005, teak values increased 8.5% per annum compounded. That is very impressive growth.
And it is certainly likely to continue. Global demand for teak is rising, while the global supply of teak is decreasing. In fact, teak trees are being cut down at a rate 8-12 times greater than the rate of replanting. This ensures that teak values will continue to rise in the future, as demand continues to rise while supplies dwindle.
Wealthy individuals have noted the strong growth of timber products, such as prominent investor Jeremy Grantham, Chief Investment Strategist for GMO, who has named timber as the asset class which he predicts to be the best performing over the next 7 years.
- It is an Incredibly Stable and Safe Investment
The incredible stability of teak is another financial aspect that makes it such a great investment. In today’s world of extreme booms and busts, volatility is almost impossible to escape when it comes to making investments. Teak, however, is different.
For instance, even during the worst year of the Great Recession, 2008, when the S&P 500 dropped an extraordinary 38%, timberland values actually increased in value by 9.5%. That is pretty wild.
In addition, in the past 45 years, timber products have only had 3 “down years”, whereas stocks have had 12. This is of course measured in single-year increments. If we were to look at timber values and stocks values on a daily basis, we would see an incredible amount of fluctuations in stocks, whereas timber would be much more stable.
Timber’s stability is one of the qualities that make it a favored investment of the ultra-wealthy. That is perhaps why timber has been included in the portfolios of the ultra-wealthy for so long, because it allows them to reliably pass down a stable and lucrative investment to their children without fear that it will decrease or swing wildly in value.
- It Can Be Your Key to Creating Generational Wealth
Generational wealth stewardship is one of the key components of why wealthy families are able to maintain their wealth over multiple generations. Having a stable and lucrative asset, such as teak, to pass down through the generations will allow your family to maintain its wealth for generations to come. If you want to pass down your wealth to your children, a comprehensive generational wealth stewardship plan is necessary for this.
One of the most important aspects of a functioning generational wealth stewardship plan is having a common goal that current and future generations can adhere to. This goal has to be more significant than just “wanting to maintain the family’s wealth”. Some sort of moral or ethical element should be included that all generations hold in high regard. In this way, maintaining a family’s wealth will not be just a matter of keeping money in the family, but be a matter of working towards this common moral or ethical goal. Teak is the perfect asset for this purpose, as an investment in teak is an investment into a reforestation project.
- You Will Be Supporting a Reforestation Project
The Earth’s forests are being cut down at a disproportionately high rate. The demand for timber is directly correlated with the growth of the global population, meaning that the more humans we have living on this planet, the more forests we will be cutting down. And considering that the global population is expected to increase from 7.5 billion people today to a whopping 9.7 billion people by 2050, it is more important than ever to replant forests, so that future generations can enjoy them.
Outdoor activities such as hiking, camping, and fishing can be great ways for families to spend time together. These activities, however, require outdoor forests and green spaces to partake in them. Reforestation projects, such as supporting a teak plantation, ensure that future generations will have green spaces in which to partake in these family-oriented activities. And here’s the best part of supporting a reforestation project in a foreign nation; it can lead to permanent residency in that nation for you and your loved ones.
- You Can Get Residency in a Foreign Nation
By investing in teak, you will have access to some of the easiest, fastest and cheapest permanent foreign residency programs in the world. Panama’s Friendly Nations Visa program, for example, is one of the cheapest and easiest ways to obtain permanent residency in a foreign nation. With an investment into a teak plantation in Panama, you can obtain permanent residency in Panama for yourself and your loved ones.
The benefits of permanent residency in a foreign nation are numerous. For example, the Friendly Nations Visa provides many benefits, such as allowing you to apply for a work visa, providing a path to citizenship, and only requiring you to visit 1 day every 2 years to retain your residency. In addition, women over 55 and men over 65 receive discounts on many things through the Friendly Nations Visa, such as 50% off entertainment (movies, theaters, concerts, etc.), 30% off buss boat and train fares, 25% off airline tickets, 30-50% off hotel stays, as well as other discounts.
Above and beyond all of these benefits, having residency in a foreign nation provides you with a stable Plan B, a place that you can go if you should ever need to. Whether it is political or economic turmoil at home, some things happen that are entirely out of our control. None of us can do anything to prevent political unrest or violence from breaking out, for instance. However, what we can do is prepare for these events, should they ever happen. Having residency in a foreign country is an excellent way to prepare for any kind of disaster that might occur in your home country that you have no control over. Even if you can’t stop a disaster from occurring, you can prepare for if it ever does occur.