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Impact Investing Through Your Self-Directed IRA

February 7, 2017

Guest author: Alex Wilson – CEO of Precious Timber

For decades now, non-traditional investments have driven the world’s best-performing portfolios and have out-paced stocks, traditional real estate, bonds, precious metals and more. In his best-selling book, The Alternative Answer, Bloomberg TV’s alternative investment editor Bob Rice, spells out that the world’s elite investors have long relied on alternative investments to produce superior returns while average investors have missed out… until now!

These wealth building strategies were the exclusive purview of institutions and the ultra-wealthy, but today any informed investor can play the same game. Topping the list of the best-of-the-best is timberland, the space most billionaire’s turn to after they make their fortunes. Timberland returns in the U.S. are tracked by the NCREIF Timberland Index, and since the early 1980’s the asset has averaged 14% annually.

Timberland happens to be an ideal holding for long-term SD-IRA investors that seek superior capital appreciation, yet insist on less volatility. Jeremy Grantham, Chief Investment Strategist for Grantham, Mayo, Van Otterloo – a global investment firm with more than $106 billion under management expects timber to outperform over the next 7 years, and calls timber “the best long-term investment there is, and the only low-risk, high-return asset.”

snow-wood-forest-firewood

Self-Directed IRA investors, by the very nature of the IRA being a tax-efficient retirement vehicle, may benefit the most from an allocation to timberland. Investing retirement funds into a biological commodity that grows over time may significantly grow the value of the portfolio and provide more attractive withdrawal options.

Private ownership in coconuts can be an interesting play for IRA investors too. The amazing coconut tree is known by islanders as “The Tree of Life,” and has for centuries been a staple food source. Today, coconut and coconut by-products are found in thousands of everyday products, and the demand on this tropical commodity is astonishing. By owning a coconut plot (inside of a SD-IRA), investors can create annualized cash-flows from nut production.

Each year beginning in year four, a coconut tree will produce nuts – and keep on producing for an additional 60 to 70 years! Unlike traditional income property, a coconut plot has no tenants, no toilets to repair, and no termites to worry about. Income is generated by the sale of the nuts, and Mother Nature takes care of making sure the coconut tree does what it’s genetically engineered to do. Private ownership in coconuts has been called the Agricultural Annuity!

SD-IRA investors that seek alternative investments may enjoy robust portfolio stability by offsetting normal cyclical asset volatility (stocks, bonds, traditional real estate) and seeing their money grow biologically. When traditional markets (and investments) crash, as experienced in 2000 and 2008, valuable tropical timberland and coconuts continue to increase in value. Trees don’t react to Wall Street, Main Street, or MSNBC talking heads – they simply grow.

In addition to financial goals, many investors today seek more than just a financial return on their investments, they also insist on generating meaningful benefits in line with their values and beliefs. Impact Investing has become an investment of choice, where one can achieve a triple-bottom line that includes both social and environmental concerns, all while making a profit.

One firm that has been following this model for the past dozen years is Precious Timber, S.A. Operating deep in the Central American tropics, in the rapidly transforming country of Nicaragua.

Whether its making school chairs for needed schools, creating career jobs for local people, or re-establishing wildlife corridors for endangered animals, Precious Timber and their extensive and experienced team create blended value that investors feel proud of. They have designed a set of investment strategies that generate attractive financial returns while intentionally improving social and environmental conditions.

For investors that are tired of the zig and zag cycles that rob ultimate portfolio value, a consideration to an integrated approach to the pursuit of financial, social, and environmental performance is a refreshing set of objectives that combine measurable positive results.

To learn more about Precious Timber, S.A., and the opportunities they offer for SD-IRA investors, visit www.precioustimber.com or email [email protected]

 

Disclaimer: The opinions, representations and statements made within this guest article are those of the author and were not influenced by NuView IRA. NuView is not responsible for the accuracy of any of the information supplied by the author(s).