Green Rascal Design

 

Nature vs Wall St.

12/28/2011

 
Today my better half, Chris, decided he wanted to share some insights about how good of an investment fruits and vegetables are. I've already shared some of these ideas, but hubby's take on things is a bit more monetary and might appeal to you if you're one of those 'show me the money' peeps.

A note on Chris; he's an IT nerd with a love for investing. With his brother he started and ran a small hedge fund for several years, investing money for their family and several friends and doing quite well until the market tanked in '08. Since then his more conservative investing has nearly made back all of what the hedge fund lost. So his understanding of ROIs is pretty good, I think. Without further adieu:

_A good return on your investment is usually between 10%-15%.  Nature laughs at these returns.  In the following paragraphs I will examine the kinds of returns on investment that investors in nature can expect these days. 
_Think of a good return on your money.  Say you invested $1000 to keep the numbers easy.  A reasonable rate of return on that would be 10% or $100 a year.  An excellent return would more likely be 50% or $500 a year.  What would an amazing return be?  I would think double your money back would be very impressive.  Lets look at a few examples of returns from low growing fruit plants, medium size fruit bushes and medium large to large fruit tree’s.  

First the low growing fruit plant.  Lets use a strawberry patch for this. Strawberries usually come in a pack of 25 for $12.00  I bought 2 packs of 25 for $25.  With 50 plants planted in April, about $10 worth of cow fertilizer and a dollar or two of water I was able to get a small bowl of strawberries every day for about 3 weeks once they started fruiting.  That’s about $10 per week of berries give or take.  The second year they really hit their stride even though we had excessively rainy weather.  We canned about $100 worth of jam and used 2lbs to make a strawberry wine.  This was in addition to the bunches we ate and didn’t count.  So lets say all together I was given back $150 worth of strawberries and the 3rd year they die.  That’s still a 81% a year return on investment if taken over 3 years.  

Now let's look at a fruiting bush.  A blueberry bush can yield large amounts of fruit, look good as a hedge and also live for a very long time.  Blueberry bushes are known to be productive for 80 years or longer.  Basically you will be planting this once and that's it.  The yield once they get established is 5-15lbs per plant. Lets say you replace a hedge with 5 blueberry plants for $50.  Organic blueberries sell for roughly $10 per pound in the stores.  Lets estimate that the first 2yrs you get nothing and then you get half of the expect yield which would be 7.5lbs per plant or 37.5lbs per year.  So on the 3rd year you get $375 worth of blueberries.  Lets say inflation is zero and you stay at your house for 25yrs. That’s a 22% a year return on your investment, turning $50 into $8,250.00.  A 16,400.00% total return on your money.  There’s only a handful of elite investors in the entire world that get those kinds of returns.  I am saying that the average person can have that just by taking care of their hedge! 

Lastly lets look at a fruiting tree.  The asian pear tree is mostly spray and pest free and is a beautiful looking specimen in itself.  Two pear trees are required for pollination and they cost $25 a piece.  Its life expectancy is 50 years or more. Average yields are 40-60 pounds per year of fruit.  At the local Whole Foods Market organic asian pears are going for $2 a piece.  Lets say they are large and ½ a pound each so asian pears go for $4 per pound.  So again lets use the math from the blueberry bush.  The first 2 years were nothing and then after that it starts fruiting.  The 3rd year you get 40lbs and the years after that until year 25 you get 80lbs.  This amounts to a 21% per year return on your investment or a 13,660.00% total return on your money.  Your $50 turns into $6,880.00 without inflation.  

These are conservative estimates and with a little care I think most people could exceed them.  The fruiting plants today are so highly bred for high yields that they can give the average person immense power to reduce their expenses and grow their wealth. 
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Personally, I'm not sure we're going to get any asian pears in 2013 (which would be the third year since we planted the saplings), but they are growing pretty fast. You get the picture. Feel free to ask questions and I'll have Chris come answer them.
 


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