One opportunity millennial investors should know more about is agriculture, a long term investment option that offers great benefits for both your wallet and the environment.
For fresh investors who are just getting started building their wealth, the sheer variety of investment opportunities can be confusing. Should you invest in the stock market or real estate? Or should you put your money into a retirement fund? Everyone has to make that decision for themselves, but it’s essential to know that you have many options to choose from.
What is agriculture?
Agriculture is the practice or science of farming.
Agriculture incorporates the cultivation of the soil to grow crops and the raising of different animals to provide food, wool, and other products. You may ask yourself why you should care about agriculture? Everything you eat, everything you drink, everything you wear, and even the house you live in, all connect to agricultural products one way or another.
Connect to Your Food
Today, as young adults, we are becoming more aware of where our food comes from and the effect it has on our health and environment. We care about where and how our food grows and who produces it. There’s also a push for farmers to practice sustainable agriculture. Sustainable agriculture can aid in meeting the world’s current food needs without compromising future generations. Investing in agriculture allows you to have a stronger connection with food producers and the methods they use, which has a direct effect on our everyday lives.
Grow Your Wealth
Farmland investment suits those who aim to build long term wealth as they are considered long term investments; therefore, the younger you start investing in agriculture, the wealthier you will be later on. Farmlands are agricultural real estate properties, and Like other forms of real estate, they appreciate while the trees produce yield each year. Nut trees such as almonds and walnuts, for example, start producing their first harvest at the age of five years old and then continue to increase their rate of production for up to 60 years.
The example below shows the long term wealth-building power of agriculture by comparing the value of a single $10,000 investment in agriculture in farmland with a 10.25% return from 1970-2016 to the same investments in bonds or a certificate of deposit for five years at 2.5%. Investments in these so-called “no-risk” assets are likely to end up as a minimal loss due to inflation, which decreases the value of a dollar by about 2.5% a year over the long term.
No More Risk Than the Stock Market
It is like any investment to carry some risk, but investing in agriculture isn’t any riskier than other asset investment classes. Real estate assets, like agriculture, provide a hedge against inflation and are considered attractive investments for anyone wishing to diversify their investment portfolio. As an alternative investment, agriculture has little to no correlation with the stock market and produces stable returns compared to other asset classes.
There are different types of risks associated with agricultural investments: fire, pests, drought, or disease can damage trees. However, diversifying your investment commodities geographically can protect against these risks. Moreover, all investment assets by Invest4Land are insured and certified by the Turkish government to ensure no harm to the trees, and a safe investment for you. Ready to start growing your wealth?