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Natural Resources

Ecuador Teak Timber Investing

By
Gary Scott

Natural Resources

There is plenty of timber investing potential in Ecuador teak timber investing . Here is information about an investment in teak that two bankers I know have started there. If the numbers are only half accurate, this has a return that is almost unimaginable.

Ecuador Teak Timber Investing Note

Here is what they wrote:

Ecuador Teak Timber Investing

We have finally found an affordable Ecuador teak timber investing opportunity in Ecuador . The simple fundamentals have always appealed. Teak is in growing demand. There is diminishing supply, plus a drastic need to stop logging rain forests where old teaks stand. The answer is teak plantations and Ecuador makes a great place to plant with 365 days a year of direct equatorial sunlight, lots of rain and close to the U.S. !

Ecuador Teak Timber Investing Potential

The potential is around 20% per annum on a compounded basis for twenty years. That is a lot, about 40 times investment or about $400,000 return on a $10,000 investment! A tax attraction is that the first income does not come in until 2009 when the first thinning begins and though initial capital is expected to be returned within ten years, the big profits are in years 18-through 20 in the first major logging.

The project requires $2,122,000 to cover planting and costs in the first eight years, but is then projected to return $1,364,272 for the next six years or about a 400% return on the investment. In year 20 the return is $75,802,154 or about an additional 40 times return!

Ecuador Teak Timber Investing is Long Term

This is a long term speculation but suits even baby boomers who want to retire eight years from now. An investment today is tax free until 2009 when at retirement age, it provides about a 50% per annum for eight years. The balance can be set aside for old age or passed onto heirs. Younger investors reap the entire investment. Those with young children or grandchildren may use it to fund their college expenses.

Ecuador Teak Timber Investing Managers

The management company (Manhattan Group, Inc.) has two other plantations (Tall Trees I and II) under their belt. Though teak trees often take 60 to 80 years to reach maturity, in the area of Ecuador chosen they reach an attractive selling size in 18 to 20 years. A 60 to 80 year old tree has more valuable heartwood but economics do not justify waiting 40 to 60 years to obtain about 50% additional girth.

The Ecuador Teak Timber Investing company has learned to plant a density of 2,500 trees per hectare (2.2 acres) which increases thinning revenues and curtails maintenance costs (less weeding). There are two final benefit. New trees sprout from the stumps and provide another cutting in an additional 10 to 15 years later. This and land values in 20 years have not been factored into the estimated returns.

For details contact Paul Palacios at ppalacios@eolnet.net

Learn more about timber investing Financial-planning.com and Thebestofecuador.com

Ecuador Teak Timber Investing

Gary Scott inspects rain forest in Ecuador at SuccessGuidelines.com. Until next message, good global business and investing!

Gary Scott

Natural Resources
Ecuador Teak Timber Investing
March 15, 2005
Natural Resources

 

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