How Long-Term Investments Can Benefit You

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In uncertain times, with markets usually volatile, it is tempting to make long-term investments and hope to ride out any economic storms.

There are advantages and disadvantages to all types of investment terms so what are the specific benefits of Long-Term investments.

The most obvious benefit of long-term investing is compounding. This is the effect of dividends or interest being reinvested to achieve sustained Capital Growth.

If investing on a regular basis, this equates to cost averaging. This means that you may purchase shares or units monthly, for example, the cost of the units will differ short-term but as long as the overall investment increases long-term then any troughs or peaks are smoothed.

What about a lump sum long-term investment?

In this instance you are hoping that the investment increases over the long run to achieve capital growth or any income derived will outweigh capital depreciation. However, what if the investment actually grew over the long term, GUARANTEED.

If you think about it how many investments can you think of that physically grow and offers huge demand and markets.

For a long-term and stable investment, you couldn’t do much better than an investment in Timber. While many investments have been very difficult to predict returns, timber remains a solid investment opportunity for the savvy investor. The return on investment figures for the last forty years shows timber comes out as a top performer when measured against many other asset classes.

So how does a forestry investment work?

Usually, an investor will commit a lump sum. This will purchase saplings, fund the land lease, pay commissions and forester/management fees. The saplings are planted and they start to grow. Initially, the saplings are worth very little but as time passes the young trees start to gain in value due to growth. Weaker trees will be harvested and sold to allow the stronger trees to become more established. Usually, this first harvest will happen within the first five years. The income the harvested trees return will be passed to the investor as an income payment. The remaining trees continue to grow and all the time they increase in value. Further harvests will take place until the investor is left with high value, strong mature trees.

Please allow me to take you through a scenario. For example, an investor initially purchased 600 saplings. After year 4, 300 trees are harvested (assuming a return of £5000 in income). After year 8 a further 105 trees are harvested (assuming a return of £15,000 in income). After year 10 a further 68 trees are harvested (assuming a return of £20,000 in income). To this point it is assumed £40,000 has been returned in income.

For argument sake, lets me make the calculated assumption that a mature Melina tree (Gmelina Arborea) is currently worth £250 each and over a 12 year cycle the price increased by 5% per annum compounded, a mature Melina tree would be worth £453 approximately.

Therefore, 127 trees would remain after 12 years and harvested. Assumed returns would be 127 X £453 = £57,531. On this basis the overall return would be £97,531 for an initial investment of… £18,000.

Now what if I was to inform you Gmelina Trees in Costa Rica have risen in value 2005-11 on average 17.83% per annum.

As a long-term investment option, various bodies predict strong growth for the timber industry and for the foreseeable future. In the UK alone we use 50% more natural resources per person than what nature can replenish. When you weigh-up the long-term nature of timber an investment today is an interesting option to help secure your financial future.

Alternatively, if you are looking for UK Pension investment or a home for an existing pension, forestry may just provide the returns you need to start in building your financial security for the later years in your life.

Whatever way you look at it, investment in timber is a solid financial choice.

Always seek advice from a qualified professional before committing to an investment.

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Investing in Two Successful Tropical Tree Species.

Two Successful Tropical Tree Species.

The forestry sector in Costa Rica has been influenced for many years by two commercially viable and vital tree species, Teak and Melina. Offered to both national and international investors, both species are highly sought after and have become a favourite as species of choice within sustainable tree farms.

Teak and Melina originated in Asia but over the last 30 years have been planted in many regions of Costa Rica. This is mainly due to the trees adaptability to the climate and environment. Therefore, as non-native trees, they are the two most widely established tropical tree species in the Costa Rican forestry sector.

Teak started to be planted in Costa Rica during the 1920′s. Teak was strongly marketed for being a sought after and important tropical hardwood. There is still a massive demand for tropical hardwood especially from India, where teak is known as the hardwood of choice.

Teak as a tropical hardwood, is one of the most used woods worldwide. Teak is in demand, in considerable amounts, by the the worlds markets with stable and generally increasing prices. This non-native tree has been intensively grown in forestry plantations due to its hardy nature and natural resistance to flood and pest.

Larger teak tree farms are generally in the hands of large international organisations while smaller plantations up to 40-60 hectares are controlled by national producers and professional project managers. The timber derived from tree plantations is mostly exported internationally, in form of raw-logs or as a plained and processed product. The main consumer countries are the population rich India, Indonesia and China.

Both countries are the two main importers of tropical wood while Europe and America are also big markets.

Importers of teak have strict rules in terms of certification (e.g. certified by the FSC)

Much later, Melina was starting to be introduced and planted with the aim to help pulp paper production. Afterwards, the importance of Melina has climbed considerably in the territory of Costa Rica. This is due to its short harvesting cycle which is unusually short for a hardwood. After 12 years a healthy Melina tree stands just short of 100 feet tall.

Melina is the most consumed type of tropical tree in Costa Rica.
Currently, both species benefit from sustainable demand.

Here at silvinvest we highlight several superb Forestry Investments. Register to gain access to the Sales Brochures and interact with our Potential Returns Calculator.www.silvinvest.co.uk/articles

Dear Prospective Investor

Dear Prospective Investor

Similar to many, you know that you need to be investing for your future and the future of your loved ones. With so many different investment options available all over the world, it can be hard to choose an investment product that is right for you.

Also, with all of the current upheaval in the markets and economies in various countries globally, picking an investment or market where you can feel assured of a future return can be a scary and difficult prospect. To compound the problem further, rates offered on savings accounts is less than inflation.

With all of these obstacles to safe investment, personal ideals such as environmental responsibility may have taken a “back-seat” when choosing between investment options, as most of the “big names” in Fund Management normally overlook the “eco-friendliness” of a particular market when creating their investment products.

It can be difficult to know if your investment with some of these big name investment firms is helping or hurting your investment plans.

However there are options to picking a sound investment that you can rest assured is also beneficial to the environment;

It’s easy to learn.

An asset class that is the third largest traded commodity world-wide.

An asset class that has actually risen in 3 of the last 4 economic downturns.

Has grown over 25% in recent years.

Sustainable and fair to the environment for current and future generations.

So What Is It? – Timber!

When considering investment options, many do not realize that there are eco-friendly, sustainable options for investing in timber that can actually help to improve the environment!

Silvinvest highlights several investment opportunities that are not only “Green” but offer superb potential returns. We explain how to invest using Cash or an existing UK Personal Pension. We also offer ideas and ways to provide investment returns to support your heirs’ long term financial future.

All of the marketed Forestry Plantations covered by Silvinvest are sustainable; this means that a method of plantation management is used that ensures profitability for investors, while preserving the environment. The importance of investing in sustainable timber cannot be underestimated. Legislation is being enacted by various governing bodies to stop the illegal harvest and logging that are devastating so many of the world’s old growth forests.

By investing in Timber, you are doing your little bit to help preserve the one resource that is responsible for the following;

1.6 billion people worldwide who depend directly on forests.

The majority of the world’s oxygen.

70% of the world’s cancer fighting drugs.

Up to 30% of land surface.

Ecosystems that are totally dependent on the world’s forests for survival.

The forests that you the investor help to create and the forests you help protect will take in vast quantities of carbon dioxide through the process of sequestration. This in turn will be converted into clean, breathable air, helping to reduce the CO2 within our atmosphere.

At Silvinvest, we are marketing certain investment plantations that can provide:

Transparency

Sustainability

Legitimacy

Potential

Rewards

Silvinvest also provides a helpful service where you can view brochures from responsible timber plantations. Access to the potential returns calculator so that any investor can quickly “crunch the numbers” associated with this investment class and easily see the potential value of investing in timber.

For example, estimates indicate that an investment of £18,000 in Costa Rican Melina Trees can be worth £104,189 at the end of a 12 year investment cycle.

Timber is a renewable resource that has been successfully traded for hundreds of years by many wise investors who have discovered the little-known fact that timber investments have generally outperformed stocks, bonds, and commodities over the long term.

This investment has remained remarkable immune to disruptions in the markets, or even political turmoil or terrorist attacks. The phenomenal growth of this industry when combined with various tax advantages, if held within a pension, that come from investing in commercial timber make this investment one that you cannot afford to at least educate yourself about before you make any decisions.

Since it is free to sign up for the newsletter and register to view brochures, downloads, investment calculators and more. Doesn’t it make sense to take a few moments of your time and learn more about the product?

Make a Change and Take Action Today.www.silvinvest.co.uk/articles

Pay As You Grow

Pay As You Grow is a saving fund for toddlers and children. It is directed at parents or grandparent’s who want to invest money for their children or grandchildren (legal guardians can also contribute). Since most saving accounts’ interest pays a pittance, finding a growth investment makes perfect sense.

Why Invest For Your Child’s Future Benefit?

Well, think of rising university tuition fees. According to BBC, at 2010 tuition levels, a student may well end up with a staggering £25,000 debt. Now, imagine the amount of debt going forward as new university tuition fees massively increase from 2012 onwards. Should you have more than one child, the potential financial burden is huge for any normal professional working family.

Another reason to save and invest an amount of money every year is many parents would like their children to be able to get on the property ladder. Currently, the average first time buyer age is 37 and this could possibly increase in future years. Until, as adults, they are able to pay off their mortgage, most of today’s young people will face retirement without any significant savings. Couple this with the fact that most of us live longer lives which will need to be funded from an ever stretching retirement pot, and you get a very clear picture of your offspring’s future.

What is Pay As You Grow?

Pay As You Grow is an investment in teak wood forestry plantations. What the investment basically does is fund the planting and growing of teak tress. In other words, it is a commodity investment. Investment in teak wood and forestry plantations has been, until more recently, the preserve of big investment funds.

Teak wood is the wood of choice for many Asians as it symbolizes quality and durability. Actually, teak is one of the most valuable of hardwoods because it can be used in construction, furniture, and marine applications. This makes it a price full commodity which has been producing fantastic returns every year for the last thirty years.

The way Pay As You Grow works is to plant teak wood trees and let them grow for 25 years and then harvest them and reap the financial benefit Also, a massive plus is the investment has come from a sustainable source and relieves the pressure somewhat on the long-standing and protected natural teak forests from illegal logging. Timber is a massive industry which ranks below only oil and gas in its size. Timber has uses in so many ways, just look around and see. Annually we use 50% more timber based products than what nature can provide.

All you need to do to take advantage of this opportunity is to invest a minimum sum of £3,600 in your child’s name. Your child in return gets allocated 50 teak trees and sublease agreement for the land on which they stand. You can include the investment into a Self Invested Personal Pension (SIPP) in your child’s name and receive 20 percent tax relief. Though, bear in mind that this option has some small annual administration costs. If investing via a SIPP, under current rules your child would not have access to returns until age 55 but can obviously reinvest returns from Pay As You Grow after year 25. This really does go a long way to providing considerable funds for when your child enters retirement.

If investing cash, the returns will go a long way towards paying university debt or used as a deposit on a house, for example.

Here at www.silvinvest.co.uk we host a Sales Brochure in our registered members area. The brochure also outlines various important and fun benefits to an investment. Just pop in your name and email address and you will have full access to the relevant documents. If you feel you would like to discuss the investment further, we have consultants available to deal with your queries and help with applications. Call on 0151 420 1765 for further informationwww.silvinvest.co.uk/articles

Tree Farms Are Becoming a Popular Investment.

Tree Farms Are Becoming a Popular Investment.

An area that is planted with trees for the purpose of producing timber is known as a tree farm. Tree farms are usually owned on a private basis and can refer not only to forests but to plantations and tree nurseries too. Both plantations and tree nurseries refer to places where trees are grown, for sale to commercial endeavours or retail markets.

Tree farms start with the planting of saplings, which are leaves that are either harvested or have been naturally dropped from trees. The investors then wait for these saplings to grow into trees. When the trees mature, they are harvested for wood and also for more saplings, which are then used to replace the trees that have been cut down, to grow a new generation of trees.

This process of regeneration can be repeated indefinitely so that a constant supply of trees is produced without the need for adding more land to the tree farm. This, in turn, serves to protect the environment as the area surrounding a tree farm can be conserved and maintained for its original purposes.

Those who invest in tree farms have the choice of the size and type of trees they plant. Some investors prefer to plant larger trees as these trees yield more timber per sapling while most investors in tree farms prefer planting smaller trees as the amount of wood or trunk as compared to the amount of leaves is less, and all the wood can more easily be harvested from the ground.

There are many different types of trees that can be planted in tree farms and the type of tree that an investor plants depends on the needs of the investor and the type of return that is desired.

One of the more popular trees used in tree farms is the melina tree (Gmelina Arborea). Melina has a high density and is used extensively for building materials and furniture. The wood has a off white appearence and this creamy colour enhances its demand for the packaging industry. The Melina is planted in Costa Rica, a perfectly suited environment for the species. It needs to be planted 10 degrees either side of the equator for it to flourish. Melina is a quick growing species and can reach 100 feet tall within 12 years and this is another reason for its popularity. In more temperate conditions a tree (oak for example) would require a much longer growing cycle before it would be suitable for harvest.

Melina is the wood of choice for pallets used in transportation. With consistent and rising demand, and with a ready-made market for this wood, it is easy to see why the Melina tree is a popular investment.

Another type of tree that can be planted in tree farms is the Teak tree Tectona Grandis. Teak is a tropical tree renowned for its grain quality that produces durable hardwood used extensively in furniture; house building, and yachts. Growing demand for teak wood, coupled with limited international supply, suggests that increases in teak prices should continue steadily. New Teak Forestry Plantations generally have a growing cycle between 20-25 years as the plantation is fully managed and use new practices to help with biological growth.

When investing in tree farms, an investor needs to carefully investigate and research the situation in order to determine which size and type of tree best suits their investing requirements.

Silvinvest highlights some fantastic investment opportunities that are not only Green but offer superb potential returns. We explain how to invest using Cash or an existing UK Personal Pension. We also offer ideas and ways to provide investment returns to support your child’s long term financial future.www.silvinvest.co.uk/articles

Self Invested Personal Pensions are a popular choice for Retirement Planning

Self Invested Personal Pensions are a popular choice for Retirement Planning

Self invested personal pensions (Sipp’s), were introduced in 1999 to the UK. Basically, it is a Tax Wrapper in the same way as any other personal pension. Tax Relief is applied to contributions and is granted at your highest rate of taxation. If you are a basic rate taxpayer you will receive 20 per cent tax relief. An £80 contribution will be grossed up to £100 invested. Also, lifetime contribution allowances are the same as a standard Personal Pensions. However, the main difference is the owner of the SIPP can make their own decisions as to where the money is invested (within certain guidelines).

At present, there are over 600,000 SIPPS in use in the UK. Anyone can have one (even Children receive Tax Relief). A SIPP offers flexibility, transparency (you know where your money is invested) and access to direct/alternative investments unavailable to a standard personal pension (and therefore not likely to be invested in the same old, under performing funds).

The shocking statistic is that 77% of Britons are retiring with their pensions providing an income of £2,000 per year or less! Making the most of your existing or preserved pensions has therefore never been so important.

So Why Self Invested Personal Pensions?

There are MILLIONS of Preserved, Frozen or Under Performing Personal Pensions in the UK. Within a SIPP, it may be possible to give the pension an opportunity to be more active, tailored to choice in the pursuit of investment returns. You can take control of your investments.

SIPP’s can also be a fantastic option pre-retirement as this type of arrangement can add flexibility as to how income is received in retirement. Though the maximum tax free lump sum is still 25%, the remaining funds can be reinvested to suit requirements. Whereas, with a standard personal pension, any residual fund (after taking the tax free cash) would have to purchase an annuity at a set rate for the rest of your retirement. The Sipp would allow benefits to be taken at age 55 and would offer a pension draw-down facility where the retiree can withdraw income at a level they choose, again subject to allowable levels.

Another major consideration for considering a SIPP is to provide a legacy. With a standard personal pension, in retirement should you die it is likely that your children would not receive any of your pension and your spouse may receive a a percentage of your pension if any at all. With a SIPP the remaining pension funds are paid to your beneficiaries, though subject to taxation. Who would you prefer to benefit, an Insurance Company or your family?

The investments Silvinvest highlight, are not only available for Pension Transfers but also direct cash investment. However, Preserved Pensions are not new money. Preserved Pensions have already accumulated funds and have a value.

Types of Preserved Pensions

Previous Employer Pension Scheme

Previous Personal Pension Scheme

Existing Personal Pension Scheme

SERPS (Contracted Out Personal Pensions/Protected Rights)

Are you considering using an existing pension to invest?

Establish what you have and what you are likely to receive, via a full pension report.

Here at Silvinvest we can put you in touch with Regulated IFA’s who can advise you on your options.

Don’t depend on the State to provide you with a pension safety net. Take control of your retirement planning.

The information contained in this article should not be construed as financial, tax, legal or any other professional advice or service. Please seek a professional opinion from your IFA prior to making any investment decision. The information in this article is for guidance only. While every effort has been made to offer current and accurate information, errors can occur.

Long Term Investments in Timber

Long Term Investments in Timber

It can be tempting to look for long term investments in these times of economic crisis. Investors in volatile markets have seen their profits take a hit and when a potential investor sees this they will want to get as far away from that volatile market as possible.

For a long term and stable investment, you couldn’t do much better than an investment in teak. When other investments have been heading down hill, timber remains a solid investment opportunity for the smart investor. That said, just because timber is a safe investment, it doesn’t mean that it is one with low returns. If you look at the return on investment figures for the last forty years, timber comes out as a top performer.

If you are considering investing in teak then you should make sure that you do your research first. You should make yourself aware of the sort of returns that you can expect before you put any money down. Unfortunately this is not always as easy as it might seem as there are no properly defined international standards for measuring the price of teak.

One reason that timber is a great option for long term investment is that it can be cashed in early if the time is right. If you think that you might need to cash out of the investment early then teak is probably not your best bet. Fortunately there are plenty of other woods to invest in.

It is often the case that if the market conditions are right, the timber can be sold early. For example if the price of the timber has jumped up then the trees can be harvested and sold for an increased amount of money – often more than the trees would be worth at the end of the original investment period.

Timber should also be thought of as a long term investment option as various bodies are only predicting growth for the industry for the foreseeable future. The world continues to demand more timber each year and the demand always outstrips the supply, meaning that prices remain high. A study by the United Nations has estimated that by 2050 our demand for wood will have doubled from the level of demand that we see today. When you consider the length of timber investments, getting an interest in this type of forest today is a great option to secure your financial future.

Timber is such a long term investment that you are not going to be only securing your future, but also that of your children. By investing in this sort of long term venture you are going to have a solid investment that you can pass onto your children.

Alternatively, if you are younger and looking for investments that will be useful to you when you retire, investing in forestry will get you off to a great start in building your financial security for the later years in your life. Whatever way you look at it, investment in timber is a solid financial choice.

Transfer Your Poorly Performing UK Pension Fund into a Forestry Investment

Transfer Your Poorly Performing UK Pension Fund into a Forestry Investment.

Official figures from the Office of National Statistics state that two in three people in Britain do not have a private pension, which has led to wide spread speculation that those not saving for their retirement could be spending their final years in poverty.

For the one third of people who do have pension provision, most are enjoying significant increases in the value of their funds with contribution pensions holders seeing growth of up to 33% more than they were two years ago.

However on the flip side, many other pension holders are still stuck in underperforming funds which could have nearly as little financial impact on retirement as having no pension at all. While money is tight and the economy is flat, it is essential to ensure that your pension is invested in funds that are going to perform well for you. And if you find that your investment is not achieving the growth you would like, then it may be time to take back control and ensure you are not left behind when retirement age arrives.

The Self Invested Personal Pension (SIPP) introduced in 1999 provides an opportunity for any pension holder to take control of their future, and transfer existing or new pension products into funds that they feel will work for them, taking command of their financial
prospects and leaving nothing to chance.

Though you may have several preserved pensions funds from old employer schemes or SERPs related options that are not performing as well as you would like, by transferring these underperforming funds into a SIPP facility you can opt to invest in industries from across the globe that not only meet your financial expectations but also appeal to your conscience too.

Unlike many other commodities that are seeing significant decline in recent years, demand in the forestry industry remains strong and this year tropical hardwood alone will supply almost 90 million cubic meters of wood, enough to fill the Empire State Building nearly 100 times. Yet investing in timber not only makes economical sense, it also contributes to a sustained and positive environment.

As trees keep growing, so it is possible to enjoy growth in your forestry investment, even when stocks and shares are on the decline. With the introduction of SIPPs, individuals can now easily transform underperforming funds into an investment prospect that financial managers have been using successfully for so long.

With steady, stable increases within the funds and predictable returns, similar to the growth of a tree itself, timber is a perfect investment for pension funds and while your pension grows, so does the health of the planet, providing a greener and more sustainable environment for future generations as well.

So if you want to take back control of your future and find an ethically sound investment that is going to work for your pension, then consider transferring your underperforming funds into a SIPP and investing in the timber industry to give the chance to create a solid foundation for your future.

for further information on Sipp’s take a look at our investing page.http://www.silvinvest.co.uk/articles

Reducing Portfolio Risk with Timber Investment

Reducing Portfolio Risk with Timber Investment

Investing in Timber is something that has become increasingly popular in recent years and this is largely because it is seen as a way to protect your portfolio in hard economic times. Retail investors as well as institutional investors have started using timber investment as a way to add a great deal of stability to their portfolios. Timber is becoming a great alternative to bonds and stocks which are seen as more volatile financial products in times where the economy is in turmoil.

One reason why the price of timber is so stable, making it such a secure investment, is because prices are negotiated for timber ahead of time. Supply contracts mean that manufacturers are able to hedge potential movements in prices in the market, making investing in timber a safer option for those looking for a low risk investment.

Cash flow in timber is rather interesting because it can often be a while before the investment matures. Once you have major investment it is likely you’re going to have to wait several years before the investment becomes profitable. The rate at which the investment matures largely depends on the sort of wood that you’re investing in as different trees grow at different speeds.

Interestingly, it can sometimes be financially sensible for the company to harvest the trees before the intended period. This is because trees are used for many different purposes, and not all of them require the trees to be fully mature. It will often depend on supply and demand in the market whether the trees are harvested early or not.

This can best be explained through an example: If timber is being grown and it is intended to be harvested for construction purposes when it is mature, this can change if the demand for wood pulp increases. If the demand has increased for wood pulp, then its price is going to increase as well, and it can be effective for companies to harvest the trees before they are mature, pulp them, and return
the money to the investors.

Alternatively, if the price of pulp is very low, then trees that were intended for pulping, might be grown to maturity and sold at a later stage in order to return a higher amount to investors, although they are going to have to wait for a while.

There are several simple reasons why timber is going to be a good investment, and why it is going to become an even better investment in the future. One is the simple fact that the demand for timber is consistently increasing. Despite increased levels of recycling, the amount of wood pulp required continues to grow every year.

Investing in an industry which has constantly increasing demand is a sensible financial decision. Timber is also a good investment because it consistently beats the stock-market for returns and as we have already mentioned, is a safer investment.http://www.silvinvest.co.uk