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Some need to know, with a bit of WealthDesign nice to know thrown in.

Why invest in farming

It’s often overlooked because it’s not particularly sexy to mainstream investors, but there is huge opportunity in global farmland and sustainable farming.

You see, global population has increased at a staggering rate over the past century, with an increase of one billion in the past decade alone and a projected world population of nine billion people by 2050. Yet today’s global food production continues to leave over a billion people undernourished.

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There has also been a proliferation of a new middle class with increased purchasing power in emerging markets, coupled with a shift in dietary trends, which has increased the demand for meat.

This global population growth and an increasing reliance of the global livestock industry on grains for feeding its livestock has, in turn, led to an increased demand for grains that will continue to trend upwards.

Add to that the millions of acres of land lost to urbanisation every year and the negative impact of extreme weather events, soil degradation, water scarcity, and rising temperatures on agricultural productivity.  Then there’s increase demand for biofuels, and the ‘finite’ nature of arable land to meet this ever-increasing global demand, and you’ll begin to understand why global farmlands — a prime asset — continue to be an attractive investment on a global scale.

On a local scale, we are starting to see a move into farm syndication that will allow investors to invest directly into land. Today farm syndication makes up 7.1% of all New Zealand farming operations. The fact is that not all syndicates are as good as another and prudent investing is wise.  If you would like to discuss what is available, and how best to take advantage of it, please do not hesitate to give me a call.

 

John Barber

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The world of farm business is changing. In the past, if a farmer wanted to expand, he called the bank and borrowed the cash. Today around 7.1% of all farms are some form of equity partnership. Farmers are finding it is better to be part of something rather than risk all by over exposing themselves to any lender.

These investment structures are a joint venture between groups of individuals and can range from owning just the land to being part of the land and farming business. All equity partnerships aren’t equal and investors need to be wary. One needs to understand what they are investing into. Farming is a long term investment and the asset liquidity isn’t great but it can be very profitable over a ten year period. It is important to do due diligence with an informed third party.

It is important to understand the costs, both up front and on going.  Good governance is also vital.

My background as a Lincoln graduate, farmer and a qualified financial planner, puts me in a good position to assess these opportunities.  If you want advice on how to invest into farming by direct ownership, please give me a call.

John Barber

 

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New Zealand – God’s own

It’s been a while since New Zealand could boast being one of the best economies in the world, but our economy is in a sweet spot right now. It is great to be able to quote the positives and there are a number of positive factors at play.

  1. Immigration and the impact of Kiwis coming home.
  2. The Christchurch rebuild is solidly underway.
  3. Auckland new home building is start speed up.
  4. The government is focused on increasing infrastructural work.
  5. Commodity prices are strong feeding which feeds a healthy rural sector.

Normally positives are off-set by some negatives but the only negative I can see at present is our strong New Zealand dollar. This has hurt some of our export sector but we are lucky that New Zealand supplies what China (our largest trading partner) wants.

Who said Aussie was the lucky country?

John Barber

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Goals –are your goal posts in sight?

a Soccer ball on a soccer field

 

There is an old saying if you don’t know where you are going, how you will ever know when you get there? In investments this is very true. Last week we had our annual external audit for WealthDesign and one thing that was drummed into me was the need to always have clearly defined goals (defined in a clear and measurable way) on file, for our clients. These goals should always be the benchmark that every investment decision is weighed against. In truth this is easier said than done, and takes discipline and thought to achieve.  Which got me thinking … this applies in all of our lives, not just our businesses.

For example, say you are a trustee of a family trust or you hold a power of attorney for your aging mother.  Having the basics right from the start, is vital.  You have to know what you are trying to achieve.  So work backwards.  What does the family member or beneficiary require to live comfortably and without stress?  This involves numbers!  You can’t just be airy fairy and say I want my mum to be happy and comfortable.  What will that look like? Discuss this with family.  Communication is vital.   You need to be able to formulate how much money your investment needs to provide to have the outcome desired. 

This is where we help you.  It’s often new territory you’re treading, so having the support at hand, with an expert on your team, is invaluable.  We care!  Call us!

John Barber

 

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When looking for quality financial advice …

Research shows that there are fewer than 1800 financial advisers authorised to give personalised financial advice in New Zealand. The scary thing is,  of these only around 360 are non-aligned or not linked to product providers, banks or insurance companies.  This minority aren’t allowed to advertise that they are independent.  So where do you go to get impartial, quality advice?

In my opinion, being authorised might allow you to give advice but this shouldn’t be the minimum level of qualification one should have, to provide quality advice. There has always been an education pathway before the latest round of regulations.  People should look for those advisers who believe in further education and who have demonstrated this by becoming either a CLU or CFP. These designations carry a higher qualification that AFA, providing their clients with the best quality advice in the market.

I advise you to ask what qualifications your potential financial adviser has.  It’s your life, so shop around to make sure you have the best adviser, someone that you’re comfortable with, and who is well qualified. 

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