Have you ever heard about the all weather portfolio? Basically it´s a portfolio created for the general public to “invest” for the long term without having to learn anything about...
Impact investment is easily the best way to fix the social and environmental problems that the world is facing today. Everyone that care about the future of our world should engage in some kind of impact investing beacause thats a way to help and make money in the same time, impact investing is a WIN-WIN. Personally i do most of my impact investing with a project that you can checkout here called Better Globe.
Have you ever wondered what the world would look like in 50 years if we humans continue to consume and destroy it like we have done for the past 50 years?
If you read my article The crash course – unlimited growth in a limited world? You know that we humans consume all the resources the earth can produce per year in just over 8 months and the pace is increasing!
That means that we consume all the fish, meat, crops and natural resources like Trees etc. at aa unsustaineble pace. It is estimated that we now have cut down 50% of all the trees that the earth has produced in its 4.6 billion years of existence, we have done that in about a hundred years. With ever increasing growth, how high will that percentage be in 50 years?
This is not so good because the trees produce something that is very important for life on earth, oxygen. They also eat carbon dioxide, something that has been increasing in the air over time because the vehicles that produce it are increasing and the trees that eating it are decreasing. Former UN Secretary-General Kofi Annan has stated that hunger, malnutrition, and desertification are the most serious problems the world is facing today. One third of the Earth’s surface is threatened by desertification.
Poverty, child death, lack of clean drinking water and poor education are some of the biggest social problems the world is facing today.
It is estimated that 1.3 billion people live on less than 1 US Dollar a day and the number is increasing.
Social impact investing
This is copied from an article in voanews – voice of Africa
Businessman Peter Nyeko has invested $50,000, along with two partners, in 20 hectares of eucalyptus trees just west of the capital, Kampala. He calls it his “tree bank.” Despite the work involved in clearing the land and caring for the trees, he says a tree bank is the best investment he could possibly have made.
“You could invest about $50,000 and in about 10 years you’re harvesting trees worth about $5 million,” he said. “You buy a seedling for less than $5, but once that seedling grows to become a fully grown tree, it will probably cost more than $150. As long as you’re willing to wait for about 10 years for a return on your capital employed, it’s pretty amazing. It’s just like a trust fund.”
This is exactly the message the Ugandan government is trying to convey to its citizens. Demand for wood is on the rise, and the deforestation rate is alarming – the country has lost nearly 40 percent of its forests over the past 20 years.
For us that feel we don’t really want to go all the way and buy land, hire experts, do all the testing and all the work etc. there is a much easier alternative more like a crowd funding project.
I have been doing impact investing and donating with Better globe since 2012, here is a short introduction video how the project works:
Here is some more of the article from voanews:
Onencan says there are ways in which the trees, if sensitively managed, can benefit the local population.
“I think you can actually empower the communities to be part of the whole program in such a way that they are the ones planting the trees, they are the ones determining the tree that they want to plant, and they get actually a percentage of the benefit. So you involve them fully so they can own that project,” he said.
Nyeko is convinced that by the time he eventually harvests his trees, they will have benefited both the environment and Ugandan society. His eucalyptus will be useful, he says, to a growing population hungry for timber.
“The more people that get involved now, the better, because the population is rising, demand is shooting up, and we just don’t have enough timber growing to sustain our demand for timber. There is a benefit in it for the whole country at large,” he said.
In any case, the NFA reports that more and more people are asking for planting advice, so tree banking will most likely become even more popular in the years to come.
I buy one donation package every month, here is what it contributes to:
As you see, here you can make donations that really help the poorest people in the world, and make passive income from the fruit and hardwood trees in the same time, a win-win concept. To this you can add another “win” because the trees eat carbon dioxide and if you buy one donation package a month for a year you will become “CO2 neutral” that year.
Impact investing in trees for long term passive income
As mentioned before it is estimated that we now have cut down 50% of all the trees in the world and the deforestation is increasing year after year. To keep up with the demand there has to be planted incredible amounts of new trees.
Apart from the donation package you can invest in single trees with a predefined profit that has high margins for the forestry company, it is calculated by experts so that they know they can deliver what is promised. The profits are not as high as if you were to do the whole thing yourself of course but in return you don´t have to do any of the work and the investment can be done for as low as 17€.
Here you can see how the impact investing in trees works:
Here are some examples of returns from trees and donation packages:
Keep in mind that the profits are on top of the social and environmental impact that the investments adds to.
Now in Christmas times, trees and donation packages are a popular Christmas presents to give friends and family. If you buy a tree as a gift you will get a beautiful certificate in a pdf file sent to your e-mail that you can print out and put in an envelope.
Every investment comes with some risks but every investment doesn´t help the environment, create jobs, build schools in underprivileged communities and fight poverty along the way. Even if it weren’t for the returns, it still helps a lot of people, the people that need our help the most. I think personally that for us fortunate enough to get born into the richer societies should share some part of it with the less fortunate.
Knowing that a part of your investments make a social and environmental impact gives a good feeling and puts peace to the mind.
To help the environment and the poor people in Africa more I have committed to becoming an affiliate for Better globe, therefore I will get a small commission on the sales created through the links here. If you don´t want to invest through my links it´s easy to find their website on your own. Note that I will never recommend something that I don’t invest in or use myself.
If you have any other questions feel free to send me an e-mail: Robin@passiveincometogether.com
Since the tree dividends are counted on one year basis, it doesn´t matter when you buy your trees during the year, the dividends will come in the middle of december every year. However there will be a one year difference in when you start to get dividends if you buy on the 31/12 compared to buying on the 1/1, so if you buy trees before newyears you will save a year of waiting time.
Every year, Better globe arranges investor trips down to Kenya and Uganda for people who are interested in seeing the plantations, schools and all the good that is done.
Down below you can find pictures from the plantations in Kenya and Uganda
Merry Christmas to you all