Investing is perhaps one of the best things to do with excess or indecisive money. The hard part is getting the portfolio established, but once all that’s said and done, securing financial independence becomes that much easier.

Another plus of growing trees on rural property is that I have place to escape from the metro crowds. I get lots of exercise clearing brush. Taxes are only $150 per year and I was able to write off the mortgage interest and all expenses.

http://westinstenv.org/itf/

You could say the same things about non-dividend paying stocks.

I think gold has its place in a diversified portfolio. Obv no one should put all their eggs in one basket.

I live in the Pacific Northwest where trees grow pretty well.

We own 2 acres where we have planted about 500 fir and western red cedar seedlings (2 years Old). They cost us about $1 ea.

We spent about 60 hours clearing brush to get a 6′ area free of vegitation around ea. tree and then planted them. (We use the cd laddering tech of planting about 150 trees a year for a total of 500 so far)I water them the first year for about another 60 or so hours total. So that’s about 120 hours sweat equity.

You lose about 1/3 to death from competition.

It would take about 50 years to get them to be ready to harvest. Each tree of mature size is worth about $500 today less one third to the logger for harvest and transportation to the mill.

How much wood is worth in 50 years is anybody’s guess. I think it won’t increase by more then 1-2% a year.

I am not going to figure anything for taxes or land because it is our home.

What am I forgeting?

NOne of this works for ERE but its fun to think it thru.

SO you math guys …..what will be my ROI?

http://market-ticker.denninger.net/archives/2352-A-Tale-Of-Irrational-Premium-And-Risk-PHYS.html

Actual ink-on-paper printing is also disappearing as an honorable profession in this country, esp. when Chinese printers can buy the assets of bankrupt US printers for nothing then fill their shops with top-end machinery from Heidelberg, KBA, MAN Roland, Komori, etc and undercut American workers by oh 90% aside from freight.

Housing? Hahahhahaaa…. “Confederated Slaveholdings, Transatlantic Zeppelin, Amalgamated Spats, Congreve’s Inflammable Powder, U.S. Hay”, and an “up-and-coming Baltimore Opera Hat Company” are better investments than timber.

Actually, all of the options presented are terrible investments. I’d fire this guest poster.

You can’t eat it, plant it, grow it. It sure is pretty, though.

I made a great profit on gold a few years ago and sold too early, but anyone buying it now is a sucker especially when urged by professional hysterics/morons like Glenn Beck. Anyone who buys gold from a TV advertiser is an idiot. Never buy fancy coins; if you don’t want bars buy sad old Krugerrands that nobody wants. They have the smallest bid/ask spread and distance from spot of coins. Only buy certified bars from the 3-4 big producers. If you still want the damn stuff, buy it from apmex.com who after much research offer the best service and spreads. (I am wholly unaffiliated with apmex and only mention them to potential fools based on fair pricing and excellent customer service).

The other thing about gold is that the bid/ask spread is titanic and this never benefits anyone but the broker. It is extremely expensive to acquire and sell. Gold ETFs are cheaper but present risk that they do not have the actual metal backing it up. The same thing applies to silver. Silver bugs are even crazier than gold bugs, and that’s saying something. I’ve been in this world and so glad I got out of it.

Gold is money, until the other party says it’s not, and it is no less fiat than paper dollars/euros/shekels; the difference is in who declares it to be fiat, and in the end it doesn’t matter; if the poop truly hits the fan like the metal bugs yelp about, and it won’t, nobody will want your gold in exchange for rabbits or chickens; they want something immediately useful like clean water, fruit, milk, blacksmithing, etc.

That said, no more than 5-10% of precious metal in yer portfolio isn’t a bad idea but all-in is just plain nuts.

In case anyone gives a shit, all of my long-term money has been in GNMAs or other US bonds since oh 2007 when I smelled something bad coming. I’m the only person I know who’s made gains since then — I tried telling people but they were all “DOW 36,000!”-addled and though I was nuts. Yeah sure if I’d gone all-in on gold then and sold today I’d have made an enormous profit, but that was a once-in-a-generation trade and it’s v v unlikely to happen again for a long time.

Long story, short: forget about gold. If you really believe in the TSHTF/End Times/TEOTWAWKI nonsense, by all means, blow your load. I’ll stick with my crappy government bonds, thx.

Of course, as with any individual stock purchases, there are great risks. The lumber on the land the company owns or leases could burn up or it could end up being sub-grade, the company could violate regulations and be sued into the ground, and sector-wide, changes in government regulations (NAFTA anyone?) could screw up the supply curve.

I greatly appreciate the linkbacks, btw!

I wouldn’t advise CDs or GICs yet – interest rates are too low. Buy gold in the interim until rates get back to something respectable like 4% at least. (we all know inflation is already implicitly at that amount anyway – just wait until it officially gets out of the bag!).

I am the writer of the article and just wanted to mention that it was meant to be a fun piece that would generate a lot of interesting comments and investment experiences (and it has thanks to comments from readers like Bob, Macs, DLM, Mo and Kevin!). I never meant to do a complete analysis of each investment, hence why no comprehensive data.

This site has a wonderful community of readers with a lot of financial expertise, and I look forward to asking questions and learning more from everyone here.

@Alex
My bias for gold showed through a little didn’t it? I just have my arguments for why it would be good to have in your portfolio especially with the events surrounding our dollar.

@Kevin
I absolutely appreciate the criticism and will try harder to research and put together a more thoughtful article next time. Again, I only meant to generate discussion with a more open-ended article.

Thank you to everyone for the constructive feedback and to Jacob for giving us the opportunity to guest post on his blog.

P.S. In case anyone is curious about where I got the idea about investing in trees, you can find more information here:

http://www.guardian.co.uk/money/2007/may/06/ethicalmoney.observercashsection

http://www.owntropicaltrees.com/

Before I spent thousands of dollars on precious metals for use in some hypothetical future hyper-inflation event, I would research what actually happened in historical hyper-inflation circumstances.

Confiscate precious metals.
” ” all public transportation.
” ” Homes and Land.
Take over: All MSM (mainstream media)
” ” All food distribution.
I could go on, but it would be better would you check these on your own.

SHTF scenario and all currency is worthless.

Otherwise, I will concede that trees were a VERY unusual investment choice. I’ve never once thought of that.

Two other investment choices my dad has: thirty chickens, two cows, and a few goats. He has free milk, eggs, and on occasion, some goat meat.

This is WAY below the usual quality of posts for this site – I’m confused?

Gold isn’t an income producing asset, but at least governments can’t PRINT it!