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					The value of a Forest - 30 year cash flow and ROI of a 100 acre forest or
tree farm:

A tree farm is a privately owned forest managed for timber production. The term tree farm is also used
to refer to plantations and to tree nurseries.

Source: Wikipedia

Introduction to ATFS

American tree farm system

Well managed AFTS certified tree farm in Virginia provides a variety of habitats for wildlife while
sustainably producing wood



The American Tree Farm System (ATFS) is the oldest third party forest certification in the world. The
ATFS was established in 1941 in response to the need to protect forest resources on private lands,
provide advice and assistance to forest owners and ensure the continued supply of wood and other
forest products. ATFS has certified 24 million acres (97,000 km2) of privately owned forestland and over
90,000 family forest owners in 46 states.




Here in Ontario you can buy 100 acres of bare land for around $500,000 - $600 000 in Ontario or $5000-
$6000 an acre plus we have connections with a reputable agribusiness who will rent the bare land for
approx. $200 an acre so that they can grow crops on it.



Now if you take a closer look it works out to about $20 000 of revenue pre year from the rent, then you
minus the property tax of $6 - $10 an acre depending on where the land is located. So you are looking at
$19,000- $19,400 of profit per year from just renting the land out and then you can figure a 2%-4% or
even greater land value increase on avg. pre year which is reasonable if you look at Ontario's land value
in the last 50 years. So the value of the land could double in 10-20 years. So lets say the land value hits
$1,000,000 form $500 000 in 10-20 years you will make $500,000 profit from the land value increase
and any where from $190 000 - $380 000 from the land rent depending on how long you decide to keep
the land. So at the end of term you can expect to make anywhere from $690 000- $890 000 of total
profit in 10- 20 years with this kind of low risk long term investment it is almost as good as gold.
Average value of an acre of farmland in 1959 and 2008 in ontario



Year

1959 - $125 ($955 in todays dollars)

2008 $4,593

Avg. Yearly increase 7.47%

A few testimonials:


We were asked by a reporter why they invested in trees, and this is what some of them said.




“First, I trust the person who recommended this investment. I know him to be trustworthy, and I know
that when he investigates something of this nature, he is extremely thorough. I also knew that sooner or
later the stock market was going to drop. Economies are too cyclical to have NOT seen the current
situation coming. This is the only investment I have that didn't LOSE anything in 2008... had losses over
20% in some of my investments.”



“I have lived overseas for thirty years and have no intent in cashing in on social security...so work till 70+
was always the way forward. Why trees? I wanted something to kick in at 75 when I figured I would be
in the mood to kick back. I like the idea of having the option to tap money from early cuts or just let the
money roll into CD's. It’s painless, meets my requirements for sustainable eco concern, and I deal with
swell people that have walked me through the tree game more than once. I'm thick, but quite pleased
with the program.”



“I was looking for a long term investment with favorable returns that would provide environmental
benefits. I also was interested in working with a company that had good management and commitment
to the project.”
“Based on the demand and market for the product combined with the environmental benefits, it made
sense for us to invest in trees.”



“I first looked into buying trees through Fred and Amy because of their commitment to reforestation,
which I think is very necessary for slowing global warming, but now with my other investments tanking, I
think my trees may turn out to be the most profitable and safest investment I have.”



 “I like the idea of an investment that is literally ‘growing’ every year despite market conditions. I like the
pro-environment aspect of reforestation. I understand that as the rain forests are depleted or restricted
to logging, available tropical hardwoods will become much more scarce despite growing demand. I like
the fact that these are growing assets located offshore without the complications of offshore accounts.
A key component of the investment decision was the apparent integrity of the plantation owners, the
apparent success of their efforts to date, and the expectation that they will honor their commitments
and that they have an accurate and conservative estimate of future values (in which they themselves
have a significant stake).”



“I decided to own trees as another egg for the basket. Plus it was investing in something that wasn’t
detrimental to the environment.”




“The current financial situation has shown that you need to think outside the stock market to be truly
diversified.”



“Investing in trees has provided a new perspective in my portfolio. I realize they continue to grow larger,
no matter what the stock market does. Additionally, it is a great thing to do for the earth!”



“We invested because we trusted the people running the reforestation project; investment diversity;
and the long term success of wood prices.”
“My wife and I were attracted to make an investment in trees for several reasons. We were impressed
that a strong case was made for good investment return with well managed farms to mitigate risk to a
level we were comfortable with. We felt that with most of our resources in the stock market,
commercial real estate, and our own business, trees were a fun and potentially valuable diversification.
While we recognize the projections are based on assumptions which may or may not materialize, the
stock market decline has made the tree investment seem perfectly tame in terms of risk. “

“We just returned from our visit to Costa Rica and couldn't believe how big our trees got. We will
definitely add to our investment portfolio by purchasing more trees.”




“I wanted an investment with a reasonably good return that also had a positive impact on renewable
resources over a long term.”



“I decided to invest in some trees because I wanted to do something ‘green.’ I live in the most wasteful
society on earth and I thought I could do something on a personal level that would make a difference. I
really don't consider it an investment in a monetary sense, though if I make (or save) some money, I will
be happy. I plan on using most of the trees for my own home in Costa Rica. I sure wish I had some spare
money, I'd get some more!”



“My wife and I bought trees because we like to think we are reasonably environmentally conscious and
this was a way to put our money where our collective mouth was. I also liked it as a non-traditional
investment, reflective of some ‘out of the box’ thinking.”



“I invested in reforestation because it is a wonderful concept. I firmly believe in protecting the
environment and was elated to learn about a win-win situation. The reforestation projects enable one to
invest in a fast declining natural resource that I believe will go up in value faster than the overall
inflation rate and does an enormous amount of good for the environment.”




“With some work we were able to find that investing in trees has a good ROI. It is not only the return
starting in 4 yrs but the reforestation that happens, local employment and may other things that can't
be measured.”
“Trees are a healthy sustainable investment when properly managed, a renewable resource, not subject
to economic fluctuation; trees grow, call it inflation.”



“I like the idea that hundreds of our trees are doing their environmental part, contributing oxygen to the
atmosphere, while, perhaps, adding value over the long haul to our investment portfolio.”



 “I diverged from Teak to include Mahogany and Rosewood because on the world markets both woods
have been hi-graded and have become environmentally guarded or endangered. There are people
literally going into the Brazilian Rain forests digging out the stumps of trees that were cut 40 years ago
to get the bits of usable wood that is left because that is all that is legal to go in and remove. Currently
Mahogany is about 3 or 4 times the value of Teak, and Rosewood is about double (the value of teak). As
more and more countries enforce the international environmental treaties and the raw forests have less
and less poachable and salable wood, the legal wood -- that which is grown on plantations -- is going to
radically gain in value. Trees are not like carrots -- you cannot put them in the ground in April and they
are ready to harvest in July. It takes time, effort and care. And trees don't care if the stock market
crashes, they just keep growing and gaining in value.

 “Everybody wins. You make money, the plantation owners make money, the local community gets jobs,
the animals get habitats, the earth gets healthier, the rain forest expands, and you have left a footprint
on the earth that is meaningful. YOU have made a difference.

“Last but not least I am invested in more than one plantation in Costa Rica. Costa Rica is a good solid
country to invest in, with a solid democracy. It is politically stable.

“For less than £2,000 [in 2006] you can own 100 trees. The return on investment is excellent and you
can be sure you are contributing to the reforestation of large areas of a beautiful country.



ATFS has been successful in helping forest owners protect water resources, enhance wildlife habitat and
create recreational opportunities all while harvesting wood in sustainable ways. Some ATFS certified
forests are now in their third or fourth generation of sustainable harvests on the same land.




Quotes taken from: http://www.fincaleola.com/quotes.htm

				
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