If you are reading this article, you probably already know that lumber is the new investment gem.
But what exactly is it that sets lumber apart from other investments?
STORY 1: The Perfect Gift
This week, I would like to tell you the story of grandparents-to-be John and Amy. A few months ago, they received the life-changing news that their daughter was expecting her first child! John and Amy were ecstatic and have been preparing for their new role as grandparents ever since. Amy plans to retire from her kindergarten teaching job of 35 years to help take care of her grandchild full-time. She has loved her job, but recently it seems like almost every day she comes home exhausted with stories of misbehaving, screaming children in her classroom. Amy longs to leave the commotion of the classroom behind and help her daughter raise her child. John worries about Amy retiring since they do not have much money saved, but tells her that she deserves time to relax and enjoy being a grandmother. He even offers to pick up some more work in his free time.
John has been out of a steady job since the hardware store he managed unexpectedly shut down a few years ago, but he spends his days helping neighbours and friends with small repair jobs to help pay the bills. Lately, one of John’s neighbours has noticed John struggling more than usual with some of his more physical jobs and jokes that he should take it easy. John laughs and runs his hands through his greying hair; “The bills aren’t going to pay themselves, and plus I’m going to be a grandpa soon- of course, my joints don’t work how they used to!” But when he gets home and curses his aching joints, John can’t help but wonder if he may have to retire from his repair work in a few years.
One day in early autumn, a few months after Amy had retired officially, John and Amy go for a walk in the park and admire the crimson and amber leaves falling around them. “I can’t believe our grandchild will be born in autumn, it’s the most beautiful time of year! It’s so magical.” Amy sighs; “But you know, I’ve been thinking. We won’t be around forever, we should give our grandchild something really meaningful to remember us by!” John feels his aching joints as he walks and agrees that it would be truly special to surprise their daughter, and future grandchild, with the perfect, memorable gift. He reminds Amy of their tight budget, but has an idea of his own; “What if we put a little bit of money into a savings account each month for our grandchild- I mean their first car and college tuition aren’t going to pay for themselves!” Amy shakes her head; “Putting money in a savings account is so impersonal. I want to give our grandchild something that they can hold onto and cherish!” John understands and agrees, but wishes that their gift could grow in value over time since they do not currently have a lot of money to put towards it. “What about investing in stocks?” John suggests. “I can do some research and maybe we could figure it out. That’s something that our grandchild could hold onto and it can even grow in value!” “I am not entirely convinced.” Amy responds; “But it is definitely a step in the right direction. I can help you do some research later.”
When they get home, John and Amy begin their research and immediately become overwhelmed by the complexity of investment. How will they know if they made a good investment? What if the stocks they pick lose all of their value? If they use a broker, how do they know exactly where the money goes? “The more information we find, the more confused I am! There’s a reason we’ve never invested before!” John complains. They read through countless horror stories of stock prices plummeting and investors losing money. They see countless advertisements for different brokers, each one claiming to be a better choice than the last. “Stocks are so complicated, there’s no way our grandchild will understand and appreciate them!” Amy exclaims. John sighs and agrees that it is time to go back to the drawing board for finding a gift.
Investing in trees would be the perfect contribution to the future of John and Amy’s grandchild! Trees are real, tangible assets, like real estate, that have value on their own. John and Amy could understand that their money is going directly into planting living tree saplings that will continue to grow until they are ready to harvest. They don’t have to worry about blindly giving their money to a broker and dividing it between different, unpredictable stocks. Better yet, the profit from each tree depends only on the price of timber at the time of harvest, so John and Amy would not have to “play the market” to decide the best time to sell. The World Bank projects that the timber industry will quadruple by 2050, so there is a very slim chance that the timber from John and Amy’s trees will not be in demand!
Whether you are a new investor or an experienced one, investing in trees is easier than ever before with Smart Forest. For more information, visit us at Smart Forest and start your tree investment journey today! Make sure to look out for next week’s story; The Ones Who Had it All.
STORY 2: The Ones Who Had it All
This week, I would like to tell you the story of Holly, a homeowner, and mother who wants to avoid her past investment mistakes. In 2005, Holly and her husband Mark had just bought the home of their dreams- and for a great price! It was elegant and spacious with a sprawling yard and a beautiful front porch, just like Holly had always wanted. It was only a short drive away from a top-rated school district for their two children and better yet- a five-minute drive from the lake!
Mark and Holly’s children would build sandcastles and play water games for hours; “The lake is like our babysitter!” Holly would joke. Mark would spend his free time fishing on the local pier with his son. When his son complained about not catching any fish for a while, Mark would remind him to be grateful; “You know son, I used to go fishing with my dad all the time but we lived really far away from the lake. If we didn’t catch anything good for a while we couldn’t just give up and go home- we would sit there for hours until we caught something.
You have no idea how lucky you are to live right by the lake, when I was your age I only dreamed of it. We’ll catch something soon, I know it- there’s a whole lake of big fish right in front of us!” For Holly, the beach was her escape from her stressful life as a full-time working mother. She would wake up each morning at the crack of dawn and go for a run or practice yoga on the cool, untouched sand. When she was on the beach, her mind was at peace as she watched the sun rise and heard the gentle waves hit the shore next to her fresh footprints. When she came home, she was ready to take on the day.
Soon after Holly and Mark had moved into their new home, Holly invested the rest of their hard-earned savings in the stock market with the hope of securing their future. At the time, she worked as a private nurse in the afternoons and Mark was an accountant for a local firm. For a few years, Holly and her family thrived in their new home and their children excelled in school. They were comfortably living paycheck to paycheck with Holly selling off the stocks to cover large expenses and house payments. Everything was pretty much close to perfect- that is until the unexpected financial crisis of 2008 hit. Mark’s accounting firm was facing budget restrictions and had to lay off nearly half of its employees - unfortunately, including Mark. He broke the news to Holly and suggested selling some of the stocks to keep their family afloat until he could find a new job. A worried Holly agreed; “Stock prices have really been falling so I’d hate to sell them now, but we can just sell a few before they drop in value even more.” Mark did his best to reassure his wife; “I know but think about it, the recession can’t go on forever! I’m sure I’ll find a new job soon and our stocks will go back to normal. As long as we don’t have any huge expenses, we’ll be fine!”
Mark may have been right about the recession not lasting forever, but a few months later, Holly was rushing to work and got into a car accident right in the middle of a busy intersection. Thankfully, no one was hurt in the collision, but Holly’s car was severely damaged. She made a panicked call to her insurance company only to find out that her plan had expired a few weeks ago. She then called Mark hoping he would know what to do; “ I just got into a car accident, no one was hurt but I’m really upset with myself right now. I’ve been so stressed out with the recession and trying to pick up extra shifts at work that I completely forgot to renew our insurance plan! The accident was my fault, so I was really hoping our insurance could help cover the damages to the other car. Do you think there’s anything we can do? If not we have to pay for the repairs and the other driver’s losses totally on our own, and I have no idea how we can afford that. I’m at the mechanic's right now and he’s saying that it will be more expensive to fix my car than to buy a new one entirely! I don’t know what to do, can you meet me here?” Mark met Holly at the mechanic and tried to negotiate the cost of the repairs. He managed to bring the price down a bit, but the repairs would take weeks and still came out more expensive than purchasing a new car for Holly; “We’re just going to have to sell some of the stocks and buy you a new car, the repairs are way too expensive without insurance. We have to be able to afford to pay for the other driver’s damages too, so we might have to look at some used cars that are less expensive.”
The problem was, that the value of Mark and Holly’s stocks at the time was far below what they had initially paid, meaning they would lose some of their family’s savings for each stock they sold. By the time they sold enough low-valued stocks to afford Holly’s new car, their family’s savings were drained entirely and they realized that with Mark out of work, they would be unable to continue making house payments on their dream home.
Holly’s family was shattered when they heard the news that they would have to move to a much smaller house further inland. Mark was devastated to give up his dream of living by the water, and their children cried for days over leaving their closest friends and school district behind. Holly was heartbroken that she would no longer be able to run on the beach and clear her mind.
Ever since their financial disaster, Holly and Mark have worked hard to rebuild their savings. After about a year, Mark found an accounting job near their new house and Holly continued to work as a private nurse even though the commute from their new neighbourhood was much further. They have learned to appreciate their new house, even though they lost one of their dreams. Now that they are able to afford their home without relying on savings, Holly has decided that it would be a good idea to try investing a small portion of their savings again; “I know what happened last time, but this time we can actually afford our house and we can just invest a little bit.” Mark is sceptical and would prefer not to invest in stocks, but is open to other investment options that can maybe hold their value in future times of economic crisis.
If Holly and Mark knew about investing in trees, they would take this opportunity. Trees continue to grow even if there are times of economic crisis, so they will keep their investment secure until the economy stabilizes. Historically, trees and other real assets have also been a hedge against inflation. Inflation occurs when there is an increase in the cost of living due to rising prices in the economy. When inflation rates are high, the value of financial assets like stocks usually falls, but the value of real assets like trees can actually rise. Since the price of timber grows more quickly than inflation, having forestry assets in a portfolio can preserve money above the inflation rate. Holly and Mark would not have to worry about a temporary economic crisis causing the entire value of their investment to plummet permanently.
Whether you are a new investor or an experienced one, investing in trees is easier than ever before with Smart Forest. For more information, visit us at Smart Forest and start your tree investment journey today! Make sure to look out for next week’s story; The CEO’s Daydream.
STORY 3: The CEO’s Daydream
This week, I would like to tell you the story of Rob, an experienced investor with ambitious (and expensive) dreams. Rob works full-time as the CEO of a booming technology company. For the past few years, he has come home from work late every day and barely has any time to spend with his wife, Linda. Linda worries that Rob doesn’t have enough time for himself and wishes he could separate his work life from his home life. She tries to get Rob to take a break; “Even when you’re at home I feel like you’re busy with work! You barely even take the weekends off anymore. It would be nice to be able to go out to dinner or go to a concert sometimes, you need to enjoy life!” Rob sighs and agrees with Linda; “You’re right, I’ve been under a lot of stress lately. I’ll take Friday afternoon off and we can walk around downtown and then go out for a nice dinner like we used to!” Linda smiles; “I’ll be looking forward to it- but only if we can go to Luigi’s- you know that’s my favourite!” Rob gladly agrees and immediately books a reservation.
On Friday Evening, Rob and Linda are seated at a table outside on a beautiful brick terrace with roses and ivy all around. They order their favourite Italian meals, enjoy a few glasses of wine and listen to the live music playing from inside the restaurant. Rob can’t help but mention how nice it is to be free from work for the night; “Thank you for pushing me to relax a little, Linda, I have to admit that it feels great. You know, it makes me even more excited for our early retirement. I’m only working as hard as I am so that we can afford our dreams. Just close your eyes and imagine us on our sailboat with nothing ahead of us but the open sea.” Linda closes her eyes and smiles; “I know, I really appreciate how hard you’ve been working. I just wish we had more time to spend together. But when I close my eyes I see us floating in the warm, turquoise waters of the Caribbean or enjoying a fresh cup of coffee and a croissant while watching the sunrise in the harbour off the coast of France.” Rob adds; “I can almost feel the salty, sea breeze on my skin as we look out and see the beautiful tropical fish swimming in the clear water surrounding our boat.”
He opens his eyes; “I feel like I’ve been counting down the days until I can trade the stress of the corporate world for the freedom of the sea. I can’t wait to retire early and find us the nicest sailboat possible. Then the world is ours to explore- we can sail anywhere! We can leave all of our worries and stress behind.” Linda reminds Rob that retiring by the age of 40 and buying a sailboat to travel the world is not exactly cheap; “I can’t wait either, but I am a bit worried that our dreams are too expensive. I want to be sure that we can afford life after we come back from our lovely sailing trip. I know you’ve been building up your stock portfolio for the past 15 years, but what if the values go down all of a sudden and we don’t have enough money?” Rob admits that he has been worried recently too; “I was thinking about that. The other day, I was talking to one of my coworkers and he suggested diversifying my portfolio somehow. When you have different kinds of assets it increases your portfolio’s overall value and can decrease the risk of profit loss. Problem is, I’ve never looked into investing in anything other than stocks! I have no idea how to diversify my portfolio, but I’ll definitely look into it.”
When it comes to diversifying his portfolio, trees are a great option for Rob! Adding real assets such as trees to any established investment portfolio is a great way to decrease the overall risk of profit loss. Even if his other investments decrease in value, he still has a chance of profiting from forestry investments. While we can’t predict the future, The World Bank projects that the timber industry will quadruple in value by 2050. It is also important to remember that as trees mature their wood becomes more dense and valuable. This means that there is a higher chance of a favourable return on investment when his trees are ready to sell, even if timber market prices are relatively low.
Whether you are a new investor or an experienced one, investing in trees is easier than ever before with Smart Forest. For more information, visit us at Smart Forest and start your tree investment journey today!
Make sure to look out for next week’s story; The Sentimental Siblings
STORY 4: The Sentimental Siblings
This week, I would like to tell you the story of Amelia and her brother Peter who long to go back to their Swiss roots. Amelia and Peter were 10 and 12 years old when they moved from their quaint home in the Swiss Alps to a cramped apartment right outside New York City. Their father had taken an amazing job opportunity in the city and told his upset children that they would adjust to their new, fast-paced life before they knew it. When they left their beautiful, peaceful childhood home Peter and Amelia promised each other that no matter what they would buy a home in the Swiss mountains someday and come back to enjoy the rest of their childhood together.
Peter and Amelia have now lived in New York for nearly 15 years and have in fact grown accustomed to the city life. Peter has recently started his own consulting business in a small office downtown and hopes to expand soon as he gets his company off the ground. Amelia has loved her job as a receptionist at a hotel in the city and enjoys taking spin classes and walking in the park when she has free time. They have both started families of their own, Peter with a wife and 2-year-old son and Amelia with a husband and a 1-year-old daughter. Amelia hopes to expand her family soon and is looking for a larger apartment with extra bedrooms. Both siblings are extremely busy in the best way possible, but sometimes life in the city can be overwhelming. From time to time, Amelia envisions herself at ten years old running freely through the swiss meadows, picking wildflowers and feeling the warm sun on her skin. Peter still reminisces waking up to views of the endless mountains and feeling that the world was an adventure waiting for him to explore.
One day, Amelia left her brother an interesting message; “Hi Peter! Let’s catch up and get coffee tomorrow morning, I want to share something with you!” Peter called her back with the news that he was free to meet the following morning and he couldn’t wait to hear what she had to say.
As soon as they ordered their coffee Amelia was excited to share her proposal; “Remember when we left Switzerland and promised each other that we would buy a house in the Alps someday when we were older? I know that was 15 years ago and we were only kids, but I’ve been thinking about it a lot and wouldn’t it be so nice to have an escape from our busy lives? I do love the city, but lately, I’ve been having dreams about the freedom and peace of our childhood home. I dream of running through the rolling green hills and smelling only the fresh, mountain air and the flowers in the meadow. In my dreams, I can almost taste the sweet, decadent chocolate as I sit outside listening to the wind whistling through the mountains and the cowbells ringing all along the countryside. Wouldn’t it just be so nice to go back and experience it all again outside of our dreams? I think we should build a house in the Alps together and use it as a vacation home for us and our families.”
Peter smiles; “You know, I’ve been having dreams about our childhood too. I see myself in the winter time frolicking through the crisp, white snow. I hear it crunch below me as I lie down to make a snow angel and look up to see nothing but endless, sparkling snowflakes all around me. Then I feel my nose growing cold and hurry inside to treat myself to a steaming cup of rich, delicious hot chocolate. You’re right that there’s nothing like Swiss chocolate- it just isn’t the same in New York.” Amelia agrees and asks Peter what he thinks of her idea; “You were right, I do love that idea, but won’t it be so expensive? We would have to buy the property and pay for building the house. Building materials aren’t cheap, and we would have to make sure it’s really well insulated- you know how cold it gets up there!” Amelia laughs; “I knew you would complain about how expensive and cold it is.
But we don’t have to build the house right now, maybe it would be better when our kids are a little older so they could appreciate it. That way we could save for it a little bit too. I was looking into materials for the house and logs are the best for insulation by far. I was thinking we could build a log house, kind of like the one we lived in when we were young! Who knows who owns that house now, but we could build one that looks exactly like it! That way we would be supporting the local architecture and our kids could see exactly how we grew up in the village.” Peter takes a long, thoughtful sip of his coffee; “I like the idea of a log house, that way we could buy a smaller lot too- that would probably be less expensive. I think you’ve convinced me, but only if we wait a few years so we can plan it out and save a bit of money.” They both agree to wait a few years to build, but to start their research on building a house now so they can be well prepared.
That night, Peter tossed and turned for hours. He was itching to start looking at properties for sale in the Swiss Alps and how to build a log house just like his beloved childhood home. After a few more sleepless hours, Peter decided to open his laptop and do some research. He found properties with breathtaking views that would be perfect for their charming log house and was immediately overjoyed. That is until he found out how expensive they were. He began to add up the costs for materials, lots, and building the house and was shocked by what the total came out to be. He called Amelia the next morning and broke the news; “There’s no way we can afford the lumber and the property for the house on top of building costs. I’m hoping to expand my business soon so I can maybe start saving for building our home in a few years, but as of right now it just seems so expensive. There has to be a cheaper way to build our home.”
Investing in trees would be the perfect solution for Peter and Amelia! They could each invest in some trees now, and wait until they are mature enough to harvest and keep the timber for their log house. They would only have to pay to plant the saplings, and would keep all of the lumber when it is harvested! If they invest in Paulownia trees, the saplings only take about 8-10 years to mature, so Peter and Amelia could have some time to save for the property and building expenses! Paulownia trees produce lumber that is lightweight yet strong and has great insulating properties. The species also has wood that is low in oil and resin content, making it much less susceptible to pests, diseases and rotting than other species. By using lumber from plantation saplings, not only would Peter and Amelia save money on lumber for their home, but they would also be sustainable investors! Their lumber would not be taken from natural forests, but rather from plantations that are created for the purpose of harvest.
Whether you are a new investor or an experienced one, investing in trees is easier than ever before with Smart Forest. For more information, visit us at Smart Forest and start your tree investment journey today! Make sure to look out for next week’s story; The Challenge.
Story 5: The Challenge
This week, I would like to tell you the story of Adam, a fifth-grade student who was recently assigned an eye-opening school project. Since the day he learned how to read, 10-year-old Adam has been a bookworm. While his classmates play tag or dodgeball for free time, Adam goes to the library. The second he opens a book, he finds himself engrossed in a brand new, exciting adventure. He sees himself as the main character in each story- solving riveting mysteries, finding secret trap doors, and escaping dangerous beasts. Adam often comes home from school and greets his parents with; “Look at my new library book, I’m already halfway finished!” or “I got a 100% on my spelling test again!” His dad jokes; “You’re going to go through the whole library by the time you’re in high school- well except for the nonfiction section. Why don’t you try reading some more realistic stories? You know, there aren’t exactly magical beasts and talking trees in real life.” Adam laughs; “Dad you know science isn’t my thing! It just isn’t interesting to me, I like reading about the heroes- like when they slay the giant monster or rescue the princess from a dungeon! There are no heroes in science, it’s all just facts and facts are boring.”
Adam had never had an interest in science until one day when his science teacher, Mrs Smith assigned a “mystery project”. She started by asking the class a question; “Do any of you know what the term ‘carbon footprint’ means?” She waited for an answer; “I see a lot of you shaking your heads no, which is actually perfect for this project! This week you are going to track your family’s carbon footprint! I will be giving you a chart that has 2 columns- one with a list of activities you will track and one with a space to keep a tally! Whenever you notice someone in your family doing one of the activities, put a tally mark next to it, that’s it for now. On Friday, you will all figure out what your tallies mean!” That week, Adam tracked a variety of activities from how many loads of laundry his family ran, to how many times they used their cars to how often they changed the thermostat. He even recorded every food product that was not local in his parents' grocery bags and tracked how much of certain foods like chicken and beef they all ate. He was unsure what all of these activities had in common, but was interested to find out what his tallies meant.
On Friday, Mrs Smith began class with a presentation. Her first slide showed a picture of a polar bear standing on an iceberg. “ Ok, to start off today’s class, we’re going to talk about this polar bear! He lives in a really cold climate and he actually needs it to stay cold to survive. He has super thick fur that helps keep him warm and he gets his food by hunting on ice chunks in the water and fishing in the freezing water. What do you think would happen if his habitat suddenly became warmer?” A student raised his hand; “The polar bear would be really hot! His fur would be way too thick for him.” Mrs Smith nodded and called on another student; “The ice would melt and he wouldn’t be able to get his food!” Mrs Smith nodded again and continued her presentation; “Exactly! Well, unfortunately, because of global warming, the temperature everywhere has been rising which is bad news for the polar bears, but also for the rest of our world! Global warming can also cause the sea level to rise( leading to dangerous floods), out-of-control fires and natural disasters like droughts and landslides that can destroy our earth and more acidic oceans that can bleach coral and be harmful to aquatic species! Global warming is partially caused by too much carbon dioxide in the air. When CO2 is in the atmosphere, it absorbs heat that bounces off the earth and can trap it there for years, making our world hotter. Too much carbon dioxide in the air also creates a ton of pollution and can lead to more disease outbreaks. So obviously none of this is good, but why am I telling you about global warming and carbon dioxide?”
Mrs Smith continued; “ Well, each of the activities that you tracked this week releases carbon dioxide, which contributes to global warming. That’s why I’m going to give you all a challenge. We are going to calculate how much carbon dioxide each of your families emitted over this past week, and then we are going to see who can get their number down the most by the end of next week! Whoever decreases their number by the most will win a prize! Every little bit helps- it’s a challenge that affects us all, but by doing your part you can contribute to a greener world! Feel free to be creative too, do some research and find out how you can offset your carbon emissions and make sure you record everything on your worksheet!” Adam was interested. He realized that for once he could be a hero outside of one of his stories- an environmental hero! He was determined to win the challenge and get his family’s CO2 number down by the following week. But this challenge was more difficult than Adam expected.
While Adam’s parents were happy he was showing an interest in something other than reading, it was very difficult for them to change their habits. Adam wished that his parents could drive their cars less, but they had no other way to get to work. He wished that they could run fewer loads of laundry, but his parents argued that they were already running the fewest possible. He did some research and found that plants absorb carbon dioxide from the atmosphere through the process of photosynthesis, but his garden was extremely small and did not have any more room for planting. He found that buying fruits and vegetables that are not grown locally can even contribute to releasing carbon dioxide! The trucks that transport fruits to the grocery store release lots of pollution into the air. Adam wished that his family could buy more local produce, but bananas and pineapples were his favourite fruits! Adam was frustrated and tried to think of another way he could help absorb some of his family’s carbon dioxide, even after the challenge was over. He hung a picture of polar bears above his bed and wished that there was a way he could help save their habitats and create a greener world around him.
Investing in trees would be the perfect solution for Adam and his family! Maybe he would not win the challenge in a week, but if his family began investing in trees now they could help make a difference. Trees absorb carbon dioxide from the air through the process of photosynthesis, and if Adam’s family invested in planting Paulownia trees, they would absorb up to ten times as much carbon dioxide as other species! Adam and his family could offset some of the carbon dioxides they release by investing in trees. Not only do trees absorb carbon dioxide, but they also help cool the air where they are planted and keep soil in place with their roots which prevents erosion and other natural disasters. Trees can even help clean local water sources by acting as a barrier to pollution and runoff. By investing in trees, Adam and his family could become sustainable investors and earn a profit as they help build a greener world.
Whether you are a new investor or an experienced one, investing in trees is easier than ever before with Smart Forest. For more information, visit us at Smart Forest and start your tree investment journey today!