Capital Appreciation Is So 2006—Invest Today For The Yield
I’ve been beating this drum for some time, but I don’t think the point can be made too strongly or too often:
It’s a yields market. All over.
With very localized exceptions, I don’t see any opportunity anywhere today for big capital upside.
That’s why, this week at our Emergency Offshore Summit in Panama City, one of our themes has been investing in productive land…land that can throw off a yield…including farmland.
One of the best places in the world today to shop for farmland is Uruguay. As Uruguay attorney Juan Federico Fischer explained in his presentation to the group this week, Uruguay makes sense overall as a solid market choice right now because:
- It’s the safest country in South America…
- It’s politically stable, with a solid democracy…
- You don’t find big social differences…there’s not a big gap between the have’s and the have-not’s…
- The country boasts excellent, affordable health care…
- Corruption is not an issue (very uncommon for Latin America)…
- The infrastructure is developed and reliable…
- No restrictions are placed on capital flows in or out of the country…
- The country imposes no inheritance tax (a nice plus if you’re looking to build legacy wealth)…
- The banking system is solid…
- You have a number of interesting, safe, and solid investment options…
Including, again, farmland.
Uruguay is a country of 3.5 million people…12 million cows…and a lot of very fertile land. Main crops include soybeans, wheat, corn, and sorghum.
Investing in productive agricultural land is a more appealing idea right now than it’s been in a very long time…in theory. However, investing in productive agricultural land as a practical matter? That’s something else.
Maybe you like the idea of retiring to a small finca of your own down Uruguay way (which could be great)…or maybe you have no interest whatever in becoming a farmer.
Your options then would be to invest in land that you could lease out to someone else to farm for you. Or to engage farm management. Leasing your land to someone who’d like to run cattle or grow soybeans on it could be a straightforward strategy, but it lacks a big upside. Going this route, you’d make a regular but probably modest return.
Engage someone to manage your farmland for you, and you would be positioned to benefit from rising crop values.
How would you organize this in Uruguay? Juan Federico could help, connecting you with the right people in the country both to buy right and then to maximize your yields over time.
Lief Simon
