Time Magazine recently published an article explaining how Legos© have a higher return on investment than stocks, bonds or gold. Specific Lego© sets have increased in value around 12% annually in the past 15 years, while stock indexes, like the S&P 500, have increased in value only 4.2%, and gold has increased in value only 9.6% annually in that time. The article is mostly for fun. It would be difficult, to say the least, to invest any significant amount of money in Lego© sets, even with such a high ROI. The logistics of purchasing and storing the sets alone is daunting, not to mention the work that would go into keeping tabs on such a niche market.
The Time article does bring up a good point though, which is that traditional investment avenues, such as stocks, bonds, and gold, do not always get the highest ROI. There are many ways of getting significantly higher returns than you’d get on stocks if you know where to look. One such option is teak. Teak is an amazing hardwood whose demand is high, and whose price is ever increasing. You may be pleasantly surprised to learn than an investment in teak is less risky and more lucrative than most investment options you’ll find in other markets.
Low Risk, High ROI
If I told you I had an investment opportunity that was less risky than stocks while simultaneously netting you higher returns, what would your reaction be? That it’s too good to be true? Well, fortunately for you, it is true. An investment in teak carries with it less risk than investing in traditional markets like stocks, while also offering better return on investment than average stock ROI.
Teak is an incredibly lucrative investment. In fact, since 1987, teak has outperformed the S&P 500 by nearly 50%! Teak prices have historically had an annual average price increase of 5.5%, however, in recent years, this has been averaging around 7% average price increase per year.
Teak is also an incredibly stable and low-risk investment. The beauty of investing in teak is that you’re investing in a commodity as opposed to a company. Bad management, ineffective marketing, poor PR; these are all things that can be ruinous for a publicly traded company, but which are almost non-existent with teak. Once the seeds are planted, the trees will grow and grow. Inflation starts increasing? Doesn’t matter to the teak! It continues to grow. International politics causing gas prices to shoot up and fall down? Doesn’t matter; the teak will continue to grow.
In addition to being insulated against external financial factors, teak is also insulated against external environmental factors. The teak tree truly is an incredible one. At the ripe young age of only 3 years, teak trees develop natural resistances to rot, fungus, fire, and termites. The types of calamities that could plague other hardwoods are not a concern for teak. These resistances make teak attractive not only as an investment option, but also as a product. The wood of the teak tree is highly sought after, and its unique qualities have carved out for it an established role in the manufacture of such products as high-end furniture and boat decking.
Not only is the teak tree itself incredibly resilient, but it would appear that the market is as well. Teak prices have historically increased at an average rate of 5.5% annually. In addition, teak trees are being harvest at a rate 8-12 times that of replanting. As the scarcity of teak increases, the price only goes up.
Investing in teak isn’t a new concept; the ultra-wealthy have been doing it for years. There’s a reason that those with money stay wealthy. It’s because they have the ability and means to seek out the best investment options and pursue them. Teak is one of these options. Many wealthy individuals and institutions have investments in teak. Harvard University, for example, has 10% of their $30 billion endowment invested in hardwoods.
A Sound Investment Beyond Dollars And Cents
An investment in Nicaraguan teak is an excellent investment choice for more reasons than just its low risk and high ROI. It provides many other benefits to the investor.
Residency in a foreign country is one of these benefits. When you buy a hectare or half-hectare of teak in Nicaragua, you will become eligible for an Investor Visa with the Nicaraguan government. Having residency in a foreign country is an excellent insurance plan. To have a country other than your home country which will willingly accept you whenever you want or need provides great peace of mind.
Teak is also an environmentally responsible investment. Investing in teak promotes reforestation, which leads to cleaner air and more natural beauty in our world. And remembering that teak is being harvested at 8-12 times the rate of replanting, this is a certainly a tree that needs to be propagated.
All investors are looking for a way to get the highest possible ROI while keeping risk low. But before you go digging up those old Lego© sets, you may want to consider an investment in Nicaraguan teak
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Want to hear an amazing podcast? This podcast is one of our listeners favourite episodes. Rachel Jensen from ECI talks with Mikkel Thorup from Expat Money Show about Investing In Teak and about buying real estate in Latin America. After you have listened and are super stoked, go to the webinar that Rachel has, it will answer every single question you have and point you in the right direction! Enjoy!
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