<p>I have an opportunity to invest a small sum of money today (around $5000) into an investment that would return $125,000 in about 50 years. It would return a smaller amount should I sell it prior to then. I’ve done the math and am confident in the return.</p>
<p>Problem is, I’m unlikely to ever sell the investment. It’s not a traditional stock/savings/bond/etc. It’s more along the lines of a piece of art, a rare coin, or an antique automobile (but it’s something different).</p>
<p>If I sold it in 50 years, it would be a good investment because my return would be about 6% or so, which isn’t bad. If I don’t sell it, then I’m flat out the $5000 because I could have invested it in something different in something that I would be willing to sell.</p>
<p>I’m focusing purely on the financial aspect here - how does one figure whether something is a good investment if it appreciates nicely in value but the owner is reluctant to sell?</p>
<p>Okay, we’ll just use art, since you’re being mysterious.</p>
<p>Buy what you love and respond to, and consider the investment to be the years of enjoyment you recieve from having it on your wall, or on the pedestal.</p>
<p>Most really great art collections actually begin this way, not vice-versa. Then, you may, as you accumulate art, develop a relationship or two, which leads to other “discoveries.” It can be exciting. But, never “invest” in art, or the stock market, for that matter, money you cannot afford to lose.</p>
<p>Fifty years is a very long time. What makes you so confident that this investment will actually appreciate by that much?</p>
<p>There are other places to invest your 5k - such as your own ROTH IRA. I can get 1.7% right now on a 12 month CD at my own Credit Union. Not 6% I know, but certainly more liquid than the investment you are describing.</p>
<p>We’re not talking about the diamond in your wedding ring, are we? Some people consider it an “investment” to convince themselves that it’s prudent to buy a huge rock. But if you are unwilling to sell it, then it really is just a possession, like a big screen TV. </p>
<p>You could think of this mystery thing as an investment for your heirs. You may not think you’ll ever sell it in your lifetime…but they’ll sell it.</p>
<p>The investment is tree seedlings on property I own. They will grow (hence is why I’m confident the investment will appreciate in value) but at this time I think it’s highly unlikely that I’d ever want to harvest them. Timber value goes up and down over time but $125,000 is a reasonable value of the timber in the future.</p>
<p>I’m not really looking for advice whether I should do this or not, but am looking for new perspectives on how to evaluate this from a financial standpoint. (Wrong place, I know, I know).</p>
<p>For clarification, I’m a guy. So it’s not jewelery, and my wedding band definitely does not have a diamond in it! But that is another very good example of something a person is unlikely to sell.</p>
<p>If you don’t plan to harvest the trees, then one way to evaluate this investment is to see how much more your property is worth with the trees on it than without the trees on it.</p>
<p>we have a large grove of black walnut trees on the family farm. they are more work than you might imagine–they have to be trimmed correctly to keep the trees growing properly and to keep the trunks straight for maximum lumber. </p>
<p>very beautiful addition to the property–the location is near some outbuildings so the land wasn’t tillable anyway. </p>
<p>it has been 25 years–not even close to being ready to “harvest”</p>
<p>My first thought is drought, disease, storms, floods and other disasters that could leave you with no trees, or many fewer than you planted. I’m normally a glass half-full thinker, but this may not be such a sure thing if you’re looking only at the financials.</p>
<p>No matter what it is, if you won’t sell it then it’s not an investment for you directly in the first place. It could be an investment for the benefit of your heirs if the value at the time they sell it is higher than you paid but not for you if you don’t sell. This applies to houses, antique cars, coins, artwork, stocks, or anything.</p>
<p>That’s looking at it as a ‘financial investment’ which is what you’re presenting. However, there can be a ‘quality of life investment’ wherein you derive enough pleasure from it to make it worth the cost.</p>
<p>With trees though, all kinds of things can go wrong - fire, bugs, disease, soil issues, or some unknown natural death. Someone might even pass a law in the next 50 years preventing them from being harvested which would leave your investment worthless. Who knows what would happen in 50 years with a volatile item such as this?</p>
<p>Are you a grown up? Do you have disposable income? Plant the trees!</p>
<p>There is some saying about why we plant trees. I will look for it… Something about grape vines, or olive trees… it’s not about $$, it’s about hope, and believing in the future. Sort of like a …babyontheway!</p>
<p>"preventing them from being harvested which would leave your investment worthless. "</p>
<p><a href=“from%20me”>quote</a> "preventing them from being harvested which would leave your investment worthless. "</p>
<p>Nooo!
[/quote]
Yes - if the OP spends 5K on the trees and they all die for some reason, the investment would have been worthless financially and maybe worthless from a quality of life perspective if they didn’t last long.</p>
<p>I have a hundred or so trees, most of which I harvest fruit from (avocados) so I’m familiar with the feeling of some great tree just suddenly dying for no apparent reason. I also usually lose money on them because of the cost of water and fertilizer (don’t forget ‘maintenance costs’ in the investment calc). However, I like having the trees for my own enjoyment and I do try to turn a profit from the sale of the Avos as well. I plant replacement trees when called for and want to keep it going. These trees add a certain value to the home as well although it’d be difficult to quantify. Hopefully they’re reasonably good for the air as well sucking in CO2 and exhaling O2. I know critters like it out there.</p>
<p>"However, I like having the trees for my own enjoyment and I do try to turn a profit from the sale of the Avos as well. I plant replacement trees when called for and want to keep it going.These trees add a certain value to the home as well although it’d be difficult to quantify. Hopefully they’re reasonably good for the air as well sucking in CO2 and exhaling O2. I know critters like it out there. "</p>
<p>Yessssss!</p>
<p>There is a property near my home, on a steep slope, on the market at a mil for as long as I can remember. I would love to plant olive trees there.</p>
<p>“Plant a grape vine for your children, and an olive tree for your children’s children.”???</p>
<p>I have a soft spot for trees, but you can’t count on them. My grandfather and a bunch of his friends bought an old lumber forest and built some camps on it. We maintain a sustainable forest business to pay the taxes. Most years we do pretty well, but some years we lose a lot because of the ups and downs of the market, ice storms, too much warm weather (which makes lumbering difficult). Still trees are good for the environment and eventually should be worth something.</p>
<p>Well I say plant the trees. If your question is really whether this many trees is worth 5k or not, because you would have to pay it all out of your own pocket, it is time for you to pop over to your county ag. office where you can ask the soil and water conservation expert about small grants and/or tax rebates for this kind of thing.</p>
<p>Where we live, everyone has to keep thier lot 70% wooded. But, if something happens, we (the village) pay a percentage of the cost to replant. It’s a good deal all around. </p>
<p>I’m just pro trees in general. The more the better.</p>
<p>The OP is talking about harvestable trees (timber?). They have to be rather fast-growing to be ready in 50 years, so let’s assume the trees are Douglas Firs (DF) or cedars. OP, you can plant several acres of DFs for much less than $5K. Collect DF cones in forests or parks (free, you can come and take as many as you want from my backyard! ;)), prep a small patch on the land where you want to plant your personal forest. Plant the free cones, and you will have a whole nursery of free seedlings in a year. DF grow very fast - the three-footers which I planted in my backyard ten years ago are already almost as high as my two-story house. A bunch of HS students can help you to plant your free trees for $1K or less. Since DF trees are native to my area, they do not require fertilizer, pest control, etc. They just grow on their own. Good idea.</p>
<p>I’m a tree-hugger and I’ve planted dozens of them. My best “investment” trees were Korean firs and Japanese maples. The $25 trees we planted ten years ago are now the size of $300 specimens sold at Molbak’s.</p>
<p>Not quite understanding your question here. If you know you will never want to harvest the trees, then why think of it as a financial investment? You must have some other motive for wanting the seedlings. I say, if you want them, and you have the discretionary income, then why not? You could start your very own arboretum. (No Dutch elms though, they will break your heart.)</p>