Meh. That's starting a business, not being a passive investor. I'm sure I'd get clobbered by the big boys if I ever tried to understand investing in timber. And so would, probably, the average Boglehead, even with $10+ million.You are asking a valid question in my view. Once critical else is achieved how to protect or diversify away further risk. For this reason I purchase timberland. Trees grow no matter the interest rate, politics, wars and currency issues. However, you need to fully understand the asset class and this should not be taken for granted. Finding the right real estate agent who is very knowledgeable in this space and helps you buy over selling to you - property - a critical link. If you buy cutover you can reforest yourself and gain tax benefits. My economics suggest 5 to 8 percent return over a harvest cycle but lots of assumptions. The correlation is low to other asset classes due to tree growth and volume additions annually. This asset class requires cash purchase as financing doesn’t work as you only get income when timber is harvested many years later. This also creates a natural barrier of entry for many people. Good luck
Statistics: Posted by Leesbro63 — Wed Aug 28, 2024 3:02 pm — Replies 76 — Views 9975