Do you control the economies across the world?
The malfeasance in the financial markets that caused the 2009 meltdown, wars & global conflict, inflation, trade wars, debt, natural disasters, politicians? Of course, you don’t but these are the tails that wag the stock market dog.
Today’s turbulent stock market limits your growth where the safest choice you have is a 30 day T-bill yielding 1.75%? Short term thinking yields short-term results. Hoping that it gets better on its own is not a strategy.
There are lessons to be learned from Warren Buffet, an investor who has beaten the stock market from day one by investing in alternative investments beginning with a pinball machine and a farm.
What is “alternative” investing?
Basically, anything except the stock market. Alternative investing is synonymous with private equity. Private equity generally refers to equity-related finance designed to invest in companies and enterprises that prosper outside the stock market.
Private equity is an alternative to T-bills and bonds … a growth strategy that you might not hear about from an investment advisor:
- The boom & bust cycle that drives emotion-based public markets has little or no impact on private equity, enhancing private equity’s diversification potential.
- Private ownership enables a longer-term strategic focus in contrast to “hope” in the public market that is focused on short-term, quarterly earnings. Being “patient” has the potential to generate a significant and safer return on investment.
- Private equity performs as well or better on both a risk-adjusted and an absolute basis.
This graphic below is from Ceres.org and is part of their analysis and conversation about a critical element in our lives … food and a sustainable food supply chain.
You will notice that at the top of every food supply chain is a farm. Sustainability in agriculture (organic agriculture) is the economic driver for the entire food supply chain. All wealth has its roots in farms.
Organic farmland is the most fundamental and secure asset where you can make the strongest impact? Healthy, clean food is critical to everyone, regardless of any economy.
Questions to ask when investing in farmland:
- Is it organic?
- Is there a clearly defined exit opportunity for your investment?
- Does your investment place the risk on the farmer who is obligated to pay off a loan or keep up with the rent? Or does your farmland investment share the risk with the farmer so everyone is invested in the same successful outcome?
- Is your farm investment double taxed (first at the company level and then on your personal taxes) or is your farm investment structured as a pass through entity with no double taxation to drain profits?
- Are you a direct owner in the farmland? Or are you investing in an entity that owns the farmland?
How to invest in organic farms? If you have the cash, great. But did you know that as an individual you can invest within your IRA and some 401ks? Just type “self-directed IRA” into your browser and off you go.
Sustainable Farm Partners offer a solution. Scalable organic farms are the root system from which all other investments grow yielding healthy crops and healthy returns.
Articles & information to guide you:
Balance & Sustainability – A case for organic agriculture
How Soil Health Impacts All Wealth – Ask yourself, “Where does everything you depend on come from?”
The Law of Declining Marginal Returns – Laying the cause at the feet of energy and agriculture.
Invest in a Business, Not Just Markets Busting the myth behind a balanced portfolio
Remember, “hope” is not an investment strategy. You have the tools to be in control, grow and do better. See your first farm and call us.
All the best and success in your sustainable investing.
CEO, Director of Farm Management & General Partner
Sustainable Farm Partners, LLP
Emmetsburg IA – Santa Fe NM
W: (505) 663-6034
C: (650) 804-0198
When a flower doesn’t bloom, you fix the environment in which it grows, not the flower. – Alexander Den Heijer