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1. 1) Re timber as an investment, the New York Times article missed the most important aspect: A timber tract may gain little in value for 50 years — and then its value begins soaring like a rocket when trees get around 14-15 inches in diameter. Buy a nearly mature tract for back taxes in a recession and you can make money.

   https://upload.wikimedia.org/wikipedia/commons/thumb/4/42/Mean_annual_increment.jpg/300px-Mean_annual_increment.jpg

   http://callisto.ggsrv.com/imgsrv/FastFetch/UBER1/ZI-5AHC-2008-DEC00-IDSI-117-2

   2) Another important point: spacing/pruning is critical. The trees must have enough space to get adequate soil, water and sunlight. Too much space, however, and they branch out/fork which greatly reduces their ultimate value. You want straight, 80 foot high trunks with few branches and no forking until the tree crown.

   3) The right soil and water is important for a particular species of tree — just because a forest survives does not make it a good investment. What is important is that the trees grow at a rapid enough rate to reach harvest size within in 80 years of life and not take 200 years. A forester can drill into a tree, count the rings to get age, measure trunk diameter and judge if growth rate is profitable.

   4) Forestry is a skilled profession. Like farming it can look simple to the ignorant outsider but you can lose money quickly if you don’t know what you are doing. E.g., cutting wood too early when it is in its prime appreciation stage and might yield 40% more money if harvest is delayed for 10 years.

   5) American hardwoods are being ruined by foreign pests invading this country. Emerald ash borer is killing off ash and another pest threatens black walnut. The valuable chestnut was killed off long ago.

   6) In my opinion, ETFs, REITs etc are just another way for financiers to sit on their butts and rip you off with service fees.

   7) Forestry has complicated tax rules. For example, let a timber company buy the trees from you “on the stump” –i.e, they cut the trees — and your profits are taxed at low capital gains rate. Cut the trees yourself, haul them to the mill and sell them there and your profits are considered income from a business and taxed at higher income tax rates. Some expenses can be deducted in the year they are incurred whereas others can be deducted only several decades later when the timber is harvested–at which point inflation will have reduced the deduction to almost nothing. IRS has a publication of 100+ pages giving the details.

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