Forestry Investment

This is Virginia.   We usually don’t get snow this early in the year, but this has been a cool and wet year and maybe winter will come early.  The pictures are taken from our back and front doors.   The snow is falling on some trees that still have not finished shedding their leaves.

Confirmation Bias?

Forbes Magazine has a good article about forestry as an investment called Buying Woodlands for Fun and Profit.  I cannot believe how lucky I was to get into forestry and I keep on getting confirmation of that. I admit that I went into it backwards.  I have always loved trees and wanted to have something to do with forestry. Since we are not rich enough to own such a thing as a luxury, I had to figure out a way to make it an investment, and I think I succeeded.

I sometimes worry that I am victim of confirmation bias, i.e. I notice the information that confirms what I already believe and just overlook or ignore contrary arguments.  I suppose the downsides are the large initial investments & long term commitment.   It also helps to know something about trees.  I got good deals on both my forest parcels. It is not only luck.  I looked at dozens of properties and I could envision what the land would look like in a few years.   This is now the fifth year we have owned the first piece of land.  It is developing about as I anticipated, only a little better.  

Everybody has to save for retirement, especially these days.  Forestry is a good option. 

Given the ways the deficit is shooting faster than it has since World War II, I don’t think anybody can count on Social Security and other investments will be devalued by the inflation that will have to come in the wake of our enormous spending binge, not to mention paying for health care and the raids on the trust funds.  Forestry is a tangible asset. It will rise with inflation. But it is much more than an ordinary investment. 

It is just a joy to walk across MY land and I believe that I am doing something that has lasting value. I just don’t get that same feeling from mutual funds in an IRA.

The joy of forest ownership

Owning a forest has changed my thinking on forestry and changed my life. I understand a lot more about the moral imperative to make forestry work.  It is much more work and better for the world to grow and sustainably harvest trees than it is to set up a “sanctuary” or “preserve.” I feel a little like I am swimming against the tide of environmental perceptions.  And when I think back to how I used to think, I understand the misconception. I just have to make it my business to explain how it really is.

Read the article if you are interested in forestry or owning a forest.  If not, you probably have not gotten this far down the post anyway.   It is not something everybody wants or can do, but it is easier than most people think. You just have to really want to do it. It requires a commitment and you have to recognize the terms. You won’t get your money back quickly and your fortunes are controlled by the rhythms of nature. You have to think of it as a long-term retirement asset, not a quick turnaround investment. It literally grows slowly over time.  But it is a great thing if you can wait for it.

I understand that the chances are small that I will live long enough to make the final harvest, but that is okay.  We all plant trees for the next generation as the last generation did for us.  Life is one long chain letter.