Benefits of Investing in Teak
Ownership of a Teak Plantation with Harvest Proceeds in 10 years
Owning Teak is physical ownership of an agricultural hard asset combining land and production of a commodity in high demand historically. A conservative plantation uses a 25-year harvest cycle, and Hardwoods has elected to base its harvest projections on a full 25-year growing period. The trees are currently 15 years old with an additional 10 years to harvest. Harvest projections are between $20,000 per 1000 square meter (approximately one-quarter acre) plantation for wholesale of logs at today’s teak price with an upside potential of $35,000 if sold in boards and assuming a 6% price growth for Teak lumber. Teak prices have risen steadily averaging 6% over the past few decades and any future rise above this rate in Teak prices will create an even greater harvest yield.
Asset Protection, Diversification, and Wealth Preservation
Diversification. By owning a teak plantation in Panama, teak owners also gain geographic and business type diversification of assets. A teak plantation is a product that is outside of the traditional markets and physically outside of the United States. International diversification is a critical element to any multi-flag asset protection strategy.
Tax deferral. What you own are long-term assets (the trees) that will be taxed at harvest. Literally, your assets “grow” tax-deferred. Like a growth stock, there are no dividends or cash flow to be taxed. Consult a tax advisor for specific tax questions for harvest proceeds.
Asset Protection. This is a non-liquid asset that is not redeemable prior to the maturation of the product. This makes it an unlikely target for creditors or plaintiffs attorneys.