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The Investment that Grows with Your Kids

Forestry investment can be a good way for parents to reach their own financial goals and support their children’s future.

19 December 2023

When you’re a parent, your priorities change. Life tends to revolve around your children – you’re always looking for ways to help them succeed.

Forestry investment can be one way for parents to reach their own financial goals and support their kids’ future. It takes around 20 years for forestry investments to fully mature, so they can be an ideal way to invest for a child. Buying into a forest when children are young can give them a head’s start on buying a first home or starting a family of their own. Forestry is an investment that can grow alongside the next generation.

“There are a lot of reasons why we’ve got really loyal investors who have stayed with us for 30 years or more,” says Gordon Wong, co-owner and Legal Services Director at Forest Enterprises. “They invest for their children and their grandchildren.”

‘I was very pleased I invested in forestry when they were born’

Gordon’s own children were lucky enough to benefit from his foresight as an investor 30 years ago. He was working as a lawyer in private practice, and one task was setting up investment structures to make forestry more accessible to everyday mum and dad investors. He took the opportunity to buy into a few forests, with his kids in mind.

“My son is now 30 and my daughter is 26, and they’re both looking at buying houses; the distributions have been perfect for a deposit on a house,” says Gordon. “I’m very pleased I invested in forestry when they were born. The funds are available to them now, but in the meantime there was no temptation for me to cash out and no way for them to waste the money as teenagers.”

Forestry investments do lock in capital for the long-term, and although there is a secondary market, liquidity is much lower than shares, for example. But when it’s harder to quickly sell up, that lack of liquidity can keep that money safe until it’s time to buy that first house or start a family.

When Anna, 31, and her husband sold their Amberley fixer-upper, they were also expecting their first child. They knew they needed to put their nest egg into something other than the bank.

“All of a sudden we had this future to invest in that wasn’t ours,” says Anna. “We had to decide what was important, and one of those decisions was education. We looked into a few investments. Forestry was best because we didn’t need an immediate return. It’s nice having something we can’t touch until harvest starts. By the time the kids are ready for school and tertiary study, we’ll be able to look at what we can offer them then.”

A green investment that appeals to the younger generation

Young New Zealanders tend to be very aware of where their money is invested and are often committed to sustainable options. Forestry is an easy investment to explain to new investors, and it fits perfectly into an ethical investment portfolio.

“It has that ‘feel good’ factor,” Gordon says. “It’s an investment that is actively helping to fight the existential threat of climate change. And it’s a tangible, biological investment that stores carbon. We know that our younger investors really appreciate the fact that forestry is renewable, sustainable, carbon negative and managed responsibly.”

The forestry industry is an essential tool in helping Aotearoa reach its commitments under the Paris Agreement. Our nation’s commercial forests sequester (soak up) around 25 million tonnes of carbon dioxide from the atmosphere every year. Even with additional carbon forestry, New Zealand will find it a challenge to reach its goal of being net carbon zero by 2050. Without forestry, it would be almost impossible.

An investment for the whole family

While some forestry offers will see all the funds locked in until harvest, Forest Enterprises also has investment options that pay an income throughout the life of the forest. A carbon crop, combined with a renewable timber crop, provides an ongoing cashflow as carbon is sequestered in the trees during their lifetime. Take a look at the Forest Enterprises website to see what’s on offer.

Forestry can be a way to grow your money as you grow your family – or to grow your wealth as you approach retirement age. It has traditionally been a hedge against inflation, it ticks all the boxes for ethical investments, and it can be timed perfectly to help your kids into their first home.

“Our investors enjoy good distributions and payments throughout the life cycle of the forest,” says Gordon. “It’s an investment for patient people who are forward-looking – and their patience pays off.”

For more information and a copy of their latest Product Disclosure Statement, contact Forest Enterprises – www.forestenterprises.co.nz

Forest Enterprises is the business name of Forest Enterprises Growth Limited and its subsidiary Forest Enterprises Limited. Forest Enterprises Limited is licensed under the Financial Markets Conduct Act 2013 to manage Managed Investment Schemes (excluding managed funds) which are primarily invested in forestry assets.

Informed Investor's content comes from sources that Informed Investor magazine considers accurate, but we do not guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk.


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