Tips Investing Money: Timber And Forestry Investing

Forestry and timber trading – the idea seems either boring or extremely alien to most people. After all, its much more satisfying to check out the rest of the herd and chase the latest hot interpersonal networking stock. However any investors – especially those looking for true diversification and stable comes back – are making a genuine oversight by disregarding the value timber investments could bring to their overall collection.

First, as a “hard asset,” timber investments are an excellent hedge against inflation. The comes back on timber trading have been quite impressive. Based on the National Council of Real Estate Fiduciaries in the United States (NCREIF), timber returns since 1987 through 2010 have averaged 155 a year, whilst the primary US stock index the S&P 500 has gone up only 9.1% each year.

Furthermore, on average the price tag on gathered timber itself has gone up 5% per 12 months during the last 100 years. Timber investments also perform extremely well when stocks are in a Bear Market. For those that may be thinking about timber investing, there are two main options really. The first is to access the asset class by investing in timber or timber-related stocks.

13 billion company that markets a range of paper products to customers globally. Another choice is to invest in a basket of stocks through an Exchange Traded Fund such as Claymore Beacon Global Timber Index Fund (NYSE: CUT). One option most individual investors tend to overlook is immediate investment in timber where one actually has a storyline of forestry directly. In many ways, a direct forestry investment is more secure, steady, and tangible then placing money into shares. Direct timber investments still benefit from the overall advantages of timber investing discussed above but provide much greater stability than timber and forestry stocks which can fluctuate wildly.

Whilst the price tag on timber and forestry products may differ, the most crucial variable in a forestry investment is the growth of the trees and shrubs themselves. You will find two basic types of direct timber investments available. The first – and more traditional option is to invest in pine forests, which includes been done in the US historically. However, pine is a softwood, and better investment returns can be produced by investing in hardwood trees.

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As with farmland trading, there is an increasing quantity of forestry and timber investments that are easily accessible by individual investors. We’ve seen a number of hardwood timber projects in tropical countries such as Costa Rica and Sri Lanka that are available to individuals. If one does not want to take on the politics risk that include owning property in developing countries, gleam rather unique hardwood timber investment available in Germany as well.

Another exception would apply if your spouse was working at least 20 hours a week in the business on average or if the partner contributed something meaningful to the business enterprise (e.g. man-hours, equity, financial risk). Alternatively, if you as well as your spouse are elderly people, it is possible to pool your retirement pension income to income divide.

■ For those ages 65 and over eligible pension income includes lifetime annuity payments under a registered pension plan, an RRSP, or a deferred profit-sharing plan, and obligations from a RRIF. ■ For those under 65 years of age, eligible pension income is bound to lifetime annuity obligations from a registered pension plan and “certain other payments received consequently of the loss of life of the individual’s spouse”. ■ Note: amounts received from the authorities’ pension plan (i.e. LATER YEARS Security, Guaranteed Income Supplement, CPP/Quebec Pension Plan) aren’t qualified to receive the new pension splitting guidelines.

In order to take benefit of this income splitting measure, both you, as the receiver of the qualified pension income, the entire year in question and your spouse must agree to the allocation in your taxation statements for. Up to one-half of your pension income can be assigned to your spouse.