Growing Your Wealth: The Case for Farmland Investment in Retirement Portfolios

The seasoned American entrepreneur, Marshall Field, once shared these words of wisdom - "Buying real estate is not only the best way, the quickest way, the safest way, but the only way to become wealthy."

It is obvious that land investments are one of the most optimal ways to protect the integrity of your portfolio. In fact, investing in land, especially agricultural land, is like planting a seed for a financial tree that can provide shade for generations to come. It is a classic move, akin to playing chess with the future - thinking several moves ahead. When you invest in farmland, you are not just buying an asset; rather, you are securing a slice of the planet! And given that the cost of farmland is lower than residential or commercial land; your asset has much more space to grow in value, especially in the long term perspective. Further, it is not only Indians who are investing in the agriculture sector - according to an IBEF report, the Indian agriculture sector witnessed a major rise in investments between April 2000 and December 2022, thanks to a total foreign direct investment inflow worth USD 2,708.72 million.

Farmland - boosting your retirement portfolio

When Prakash started working on his retirement portfolio, he was sure of one thing - he needed to include real estate in it, specifically farmland. You might wonder why he felt so strongly about adding farmland investment to his portfolio. In the words of famous entrepreneur Jesse Jones, "I have always liked real estate; farm land, pasture land, timber land, and city property. I have had experience with all of them. I guess I just naturally like 'the good Earth,' the foundation of all our wealth."

Land has been, through decades, one of the best ways to generate and accumulate wealth and Prakash was keen on subscribing to this vision. So, why should you choose farmland investments? Let us take a look -

The risk-reward equation

Beginning with the aspect of risk in investment, allocating your money to farmland is like having a sturdy umbrella in a market storm. It is less volatile compared to the rollercoaster ride of stocks or the sometimes slippery slope of bonds. Land is a solid asset which grows in value over time, while offering a comforting level of stability. It is like the wise old owl of investment options - it does not flit and flutter with market whims.

Then, there is the important aspect of generational wealth. Farmland is a gift that keeps on giving. It is like passing down a family heirloom - a tangible asset that can grow in value over time. Envision a future where you can proudly recount to your grandchildren the wise decision you made while acquiring a

parcel of land, which has witnessed significant appreciation. Isn't this a goal you aspire to achieve with your retirement portfolio - to invest in an enduring asset that not only withstands the test of time but also serves as a valuable legacy for your successors?

Farmland keeps inflation at bay

Inflation is something which has worried every individual and investor in recent years, land is a strong hedge against the continued rise in prices. While currencies may wobble and goods may get pricier, farmland manages to retain its value despite inflationary pressure. For instance, farmland usually appreciates at 10-12% per year, which is almost double the 6% inflation figure currently prevalent in the country. Therefore, in a way, investing in land is like locking in a piece of economic history.

Simply put, buying land is not just an investment; it is a legacy which you can share with your children and their children, when the time is right. The focus here is not on rapid gains or immediate profits; instead, it centres on long-term planning, stability, and a measure of patience. So, if you are looking to plant your investment roots deep and strong, just like Prakash, then land might just be the perfect soil for you!

Your investment in farmland can also generate several sources of revenue for you - given the rising focus on organic farming in India. According to a recent report, the demand for organic products is expected to grow at a compounded annual growth rate of 25.25%, between 2022 and 2027 - offering you additional income generation opportunities even as your land continues to grow in value. Adding farmland to your retirement portfolio is the best way to capitalise on these opportunities and thereby, safeguard your future.