Investment Articles

Finding the best agriculture investment can be tricky for the inexperienced investor with little or no knowledge of the sector, but there are of course many different options available including agriculture investment funds, direct agricultural land investment, and purchasing equities in agricultural companies. In this article I will go some way to explaining the different options, the risks they present to investors, the mechanics of how each type of agriculture investment works, and the returns that are currently being achieved. You can also download a complete agriculture investment guide at the link at the bottom of this article.

Firstly we will look at the relevance of agriculture investment for the current economic climate, and whether this particular sector shows us the signs of being able to generate growth and income.

The Current Economic Climate

The global economy is still in a state of turmoil, and the UK in particular is cutting back public spending to reduce an unmanageable national debt, the population is growing, and quantitative easing is likely to lead us into a period of extended inflation. Also, the lack of economic visibility means that it is very hard to value assets such as stocks, and interest rates being so low means that our cash deposits are not generating any tangible income to speak of.

So what does this mean for investors? It means that we need to buy assets that have a positive correlation with inflation i.e. they go up in value quicker than the rate of inflation, these assets must also generate an income to replace the income we have lost from cash, and finally any asset that we purchase must also have a strong and measurable track record.

It is very clear that agriculture investment, especially investing in agricultural land, displays the characteristics of growth, income, a positive correlation with inflation, is easy to value, and has a clear and evident track record to analyse, and as such agriculture investment ticks all of the relevant boxes to potentially become the ideal asset class for investors today.

Agriculture Investment Fundamentals

The fundamentals supporting agriculture investment are pretty easy to measure; as the global population grows we need more food, to produce more food we need more agricultural land as this is the resource that provides all of the grain and cereals that we eat, and all of the space to graze the livestock that end up on our plate. So we are dealing with a very basic question of supply and demand, if demand increases and supply can’t keep up, the value of the underlying asset increases, so let’s look at some of the key indicators of supply and demand for agriculture investment.

For seven of the last eight years we have consumed more grain than we have produced, bringing the global store down to critical levels.

Since 1961 the amount of agricultural land per person has dropped by 50% (0.42 hectares per person down to 0.21 hectares per person in 2007).

The global population is expected to grow by 9 billion by 2050.

Most think tanks and experts believe that we will need to increase the amount of agricultural land by 50% to support that growth, essentially a productive field the size of greater London need to be found every week.

In the last ten years virtually no more land has been bought into production as climate change, degradation and development and a host of other factors mean that there is little or no more new land we could use to farm.

The underlying asset that produces our food, the land, will become more valuable as more people demand food.

Agricultural land value rise when the food it produces can be sold for a higher price, making owning farmland more profitable, and food prices are at a 40 year low, leaving room for around 400% price inflation. In fact a bushel of wheat cost around $27 in the early seventies and now costs just $3.

Farmland in the UK has risen in value by 20% from June 2009 to June 2010, and 13% in 2010 alone according to the Knight Frank Farmland Index.

So the fundamentals supporting agriculture investment are sound and very clearly demonstrate a good picture for potential investment. But can we absorb price inflation? Well there are a myriad of studies that tell us very clearly that as a population, we absorb increases in food prices almost 100%, and sacrifice spending in other areas, so yes, we can.

Methods of Agriculture Investment

Agriculture Investment Funds

There are many types of agriculture investment funds to choose from, most invest in farming businesses, other purely in arable land, and others by stock in agricultural services companies. Most agriculture investment funds are showing excellent growth, and the fact that they are buying has increased the level of demand in the market therefore their mere presence is contributing to capital growth. Rural agent Savills recently commented on the fact that they have access to £7 billion in capital from fund to purchase farms, that is enough capital to purchase six times the amount of farmland that will be advertised in the UK this year, in fact, according to Knight Frank there has been 30% less farmland advertised this year from last, and buyer enquiries have increased by 9%.

To talk about risk for a moment, the risk involved with this fund based investment strategy is that you give over control to a fund manager who will spend your money for you and acquire assets that he or she believes are relevant. Also, if one fund performs badly, that usually has a knock on effect for other agriculture investment funds as confidence in this particular strategy takes a hot, you can therefore lose value through no fault of your own. You also have to pay a fund management fee, eating into your profits.

In terms of the returns one can expect from a fund, this varies wildly but most project annual returns of around 10%, although this will vary depending on a whole host of factors including the fund management, investment strategy, and general market conditions.

Buying Shares in Agricultural Companies as an Agriculture Investment

Another option for chose considering cashing in on agriculture investment is to purchase shares in an agricultural business, be that a farming business, or a services business, the options to consider vary wildly and careful thought must be undertaken to pick a suitable market (LSE, NASDAQ etc), and then a suitable company in which to invest. The business of picking shares remains, in my opinion, a job best left to those with the time, experience and resources to carefully research the company, its management, and it product line, and only those company displaying sound fundamentals should be added to a portfolio.

The risk here is as with any equity based investment, a down-swing in the market can cause a good company to lose value and thus affect the wealth of the investor in a negative way. We have all seen recently how a bear market can bring down profitable companies and the whole premise of agriculture investment is to avoid financial markets and add an element of non-correlation to a portfolio, ensuring the investor owns an asset that is unaffected by volatile stock markets.

So does an agriculture investment in the form of shares fit the bill? Well not really, as we were looking for stability, non-correlation, a positive correlation with inflation and income, and this mode of agriculture investment ticks none of those boxes other than a nominal dividend.

Buying Farmland as an Agriculture Investment

In my opinion the most sensible strategy for investors is to acquire profitable farmland that has a track record of producing an income yield, and rent that land to a commercial farmer. This mode of agriculture investment allows the buyer to access an asset that displays all of the characteristics that we are looking for, non-correlation with stock markets, positive correlation with inflation, income and growth, as UK farmland continues to increase in value yet is still only half the price of agricultural land in Ireland, Denmark and the Netherlands, leaving a huge margin for future growth.

There are of course a number of risks to consider here as well, sourcing good land for example, and of course sourcing and managing a farming tenant, these risks can all be managed effectively by partnering with a specialist agriculture investment consultancy that will handle the sourcing of both land and tenant and also handle all ongoing management too.

So to summarise, if one is to make an agriculture investment, the best option right at this moment is to buy agricultural land, giving the investor growth and income in a volatile market.

To download the complete Agriculture Investment Guide click here.

Download the Agriculture investment Guide at http://www.dgc-ai.com

DGC Business Consulting Ltd source and manage farmland, residential property, and commercial property for investors, as well as provide research and due diligence for asset acquisitions across Europe.

HYIP which stands for High Yield Investment Program is just what it sounds like, is a type of investment program that yields high return rates ranging from 5% to as much as 250% per month. HYIPs are offering probably the most profitable investments available today, much more than any bank or investment fund. HYIPs claims that they can provide high interest rates by utilized your invested amount in forex, offshore trading, stock exchanges, soccer betting, commodities, etc. Some of them even work out the invested amount in other HYIPs and share the profit with you.

HYIPs can be divided to on-line and off-line investments. Off-line HYIPs are usually not available for common investors, their minimum of deposit is about $100k and more. Therefore, we will direct our interest to online-based investment opportunities. Investors invest in these online-based HYIPs via their websites using e-Currency, such as Liberty Reserve, Perfect Money, Alertpay, etc. The interest will be paid on daily, weekly, bi-weekly, monthly or yearly basis depend on their investment plan into your e-currency account.

Since you don’t have to do any kind of activity to gain the interest, investing in HYIP means a passive income source where you just sit back and waiting the money coming to you. However, this passive income system is associated with a huge range of risks, because most of these HYIPs are short-lived and are just Ponzi schemes. These schemes appear very attractive due to their promise of high interests. Ponzi schemes do not have revenues because the money collected from investors was not really invested. Note that if you invested in these Ponzi schemes there is no way to get back your money once you are scammed. Although this kind of investment is quite risky HYIP programs are getting more participants by the day and every so often another HYIP program is launched. Many investors have succeeded earning fortunes virtually overnight because an experienced HYIP investor can easily spot out bad scam HYIPs. Besides, good HYIPs also exist and may live long enough (for years), those people who began dealing with them from the beginning make huge profits.

Let’s consider an imaginary HYIP that offering the investment plan below:

Interest: 1.3% daily for 30 days
Min deposit: $10
Max deposit: $10000
Compounding: Available
Principle return: Yes
Referral bonus: 3%
Withdrawal: Automatic
Payment methods: Liberty Reserve & Perfect Money

Let’s say you have invest $100 in this plan, then this particular HYIP will pay you 1.3$ daily for 30 days. In other words, you will be paid total 39$ (net profit) and your 100$ principle return to you once your investment matured. If you choose to compound all the paid interests (reinvest), then you will be paid 147.33$ at the end of the investment term (net profit: $47.33). (Note: You can always use the HYIP calculator to calculate the profit for any investment plan) The minimum and maximum deposit that can be made is $10 and $10000 respectively. The withdrawal system of this HYIP is fully automatic, thus the daily payment is made automatically into your e-Currency account. The e-Currencies accepted are Liberty Reserve and Perfect Money. Besides, you can earn extra profit in the referral system, if somebody invests in this HYIP by following your unique referral URL then you will be given referral commission of 3% calculated on the amount invested by this new member.

Investment is always invariably associated with risks, HYIPs are not exemptions. There are new programs opening everyday but most of them are short-lived and are just Ponzi schemes. The lifespan of HYIP scam/ Ponzi is depending on how long the program is able to seek for new deposits. The moment new deposits stops, the program gone. Therefore your investment is quite vulnerable to getting scammed! However, HYIP can prove to be profitable if invest in it wisely. But be very careful if you’re interested in this type of investing opportunity since it can also lead to big losses. If you are really serious in being involved in a HYIP, you must always be ready to suffer a scam attack and that’s why you are always being advised to not invest more than you cannot afford to lose. Note that you cannot either complain your e-Currency authorities or suit the HYIP owner because your lawyer would charge you more than your invested amount. As a conclusion, investing in HYIP is actually like gambling! You are most likely a gambler instead of a investor. The difference is that if you invest wisely then your chances to profit would be higher.

Always conduct a thorough research of the company before you getting involved in and keep checking the paying status of the company via HYIP monitor.

Exchange traded funds have become the newest investment fund ever since the year of 1993. These trade funds have an easier and better trading option and are definitely more diverse when it comes to portfolio management. They are more convenient and definitely have more added benefits. Since then until this very day, the investments made to the ETF has increased to about two hundred and fifty billion dollars.

Exchange traded funds are in tune with a particular country or a company from a particular country. ETFs are different from mutual funds in the way they are traded. They are bought and sold via a stock exchange just like a company’s stocks and bonds. ETFs, unlike stocks, are traded through the whole day and are not kept available only at one given point of time. These are traded depending upon their demand and supply, unlike other investments that are based on the funds’ contents.

To many investors, bonds may not be the most exciting of ways to build ones portfolio, but it surely is looked upon as a reliable measure. Exchange traded funds on the other hand are more popular and its popularity is gaining much importance in today’s market. If you are a person who wishes to have more excitement and reliability at the same time, then it is time that you looked at the ETF bonds. Since its inception, in the form of assets in ETF bonds in December 2004, the investments to such bonds have gone from $8.5 billion to more than $90 billion over the past few years.

Unlike other bond funds, an ETF bond has better transparency. The true value of the ETF bond along with the possibility of trading them in the public market makes them even more appreciated. These bonds also have a very smaller fee attached to them. Commissions are also deducted every time you buy or sell an ETF bond, but unlike other bond funds, these commissions need not be paid if fund trading happens for a longer duration of time.

As an investor, you need to remember that investment strategies and investment products differ from one investor to another. Just like all other investments, ETFs too have their own benefits and drawbacks, but overall, this would be that investment tool which provides total transparency along with the other characteristics of a bond.

Darius has been writing online for a while now. He has a wide range of interests and topics that he likes to write about. You can check out some of his websites at http://www.daliteprojectionscreen.org and http://www.citronellabarkcollar.net

Trust deed investing has been around for many generations, yet today it seems few people are familiar with how it works or how it compares to other investment options. The economic signals today are mixed and confusing, and investors are understandably unsure about what to do. Invest or sit on cash? Invest in what? Trust deed investments offer one of the best opportunities, and risk-adjusted yields, available today when compared to the other major alternatives: stocks and private equities.

Trust deed investments are among the best risk adjusted yields available today.

First let’s understand the inherent value of risk-adjusted yield. Simply put it is the return potential of a given investment relative to its risk, where the risk is generally measured by volatility. Commercial trust deed funds historically yield consistent returns in the 9%-12% range annually, with very little volatility. Other assets, say small cap stocks or funds for example, have the potential for much higher returns but with much greater chance of loss as well. So the commercial trust deed fund would have a higher risk-adjusted yield.

Stock Market

If we now look at the major stock market indexes and compare them to commercial mortgage funds we see how this pattern plays out. The chart shows three major stock market indexes versus the lower end average of commercial trust deed funds. While there are slight variations among the indexes they all follow a similar path, and all show a lot of volatility. It’s interesting to note that this particular chart shows the stock market during the best part of the recent economic bubble, and stops before the market imploded in August of 2008. While there are periods where the market outperforms trust deeds it is impossible to time the market perfectly, and as we’ve all painfully learned recently those profits can disappear quite literally overnight.

Another important distinction is the collateral behind the investment. Theoretically an equity holder’s investment is backed by the company’s assets, but in reality your capital can disappear into the wind. (Just ask shareholders of Lehman Brothers or the Madoff funds.) Trust deeds are backed by valuable, and tangible hard assets: real estate. While real property can and does drop in value it is not subject to the minute-by-minute trading of wall street, and most real estate will always have some economic value. If the private money lenders do their job right there is ample collateral backing every trust deed investment. And don’t forget, when things go bad the lender (trust deed holder) is first to get paid, but the equity holder stands at the back of the line.

Private Equity

Private equity is exactly what it sounds like: investing money directly into a private company in exchange for an ownership stake. The attraction, of course, is that these mostly smaller, early stage companies offer the chance for eye-popping profits if and when they become successful.

Of course, that’s a big IF. Truth is most of these companies fail, or at least fail to achieve any sort of real value. On top of which investing in private companies is a tremendous amount of work and generally requires significant expertise. This is why it is mostly done through private equity or venture capital funds. (We’ll ignore Angel investing for the time being.)

So what about those eye-popping returns? Well, private equity and venture funds operate on basic portfolio theory. That is, out of every 10 investment about 6 will go completely bust, 4 or 5 will do ok and 1 or 2 will knock it so far out of the park that the fund overall provides a decent return. Nothing wrong with that if you have the stomach for that level of risk. Think of it as the extreme sports of the investing world. In fact, the amount of money required is so high and the risk so great that this is generally an investment class relegated to institutions and the extremely rich.

Stocks, bonds, mutual funds, and even private equity can be valuable tools in your investment toolbox. But the familiar, understandable, reliable and secure commercial trust deed fund should hold a prominent role in most investor’s portfolios.

Robert Purnell is President and Founder of Shepherd Capital Partners Inc., a commercial and private-money lender and trust deed investment manager with expertise in special use assets. For the past 15 years, he has been arranging financing and underwriting acquisitions on traditional commercial real estate and other special-use assets such as churches, senior housing and assisted living, medical facilities, self-storage, gas stations and more. You can learn more about Shepherd Capital Partners at http://www.shepherdcapitalpartners.com or call him at (415) 464-1004.

Copyright © 2008-2010

Would we have invested in that project and released the funding ahead of closing if we had fully considered the financing risk on its own? Would a dispassionate review of the closeability of the financing caused us to forgo the investment? What would our view of returns have been if we had focused on the issues the revenue plan alone offered? What would our view of their expense estimate had been had we trained our analysis on the set of costs alone?

A useful and yet little attended part of the investments is a pure risk analysis. I advocate that as principals creating investments and investors placing capital in investments. That we should add a step to our analysis. I suggest a good term for this is the “Risk Focus Analysis”. In business school, they teach reviewing each alternative and placing a probability of success on that alternative along with estimating its value. Using this technique you are advised to make a choice for your action plan. Unfortunately, this view is in my opinion over simplistic. Instead, I suggest modifications to this approach. First, for plan alternatives that match the business school scenario take the following steps.

Describe the choice(s) you are making and the anticipated results.
Determine their value.
Determine whether there are “events” in the chain that can cause the plan to fail.
Determine the probability of success.
Assign the value based on the probability.
Make a decision based on the “failure events” to keep the option in the list or not.
Choose from the remaining alternatives.

Considering further, many projects don’t really lend themselves to this “alternative analysis” process. Instead, we are looking at an investment project and evaluating its executability and expected profitability. For these cases, a process to determine whether or not to invest and under what conditions to invest is needed. Rather than the simple brute force due diligence analysis let’s consider what our concerns are:

What is the risk that part or all of our capital be lost?
What conditions should we place on the investment to protect our capital?
What are the risks to the projected returns?
What are the risks to the exit plan?

With these items in mind, the investment risk analysis should help work out whether to invest or not and then under what conditions to invest or not. Also, as an investor or investment fund, this can determine basic investment protocols for agreements. To work these our investors should:

Define the issues effecting the potential safety of the capital including financing, guarantees, inventory, or working capital consumption for example.
Define the assumptions determining income.
Determine the assumptions determining expense.
Determine the assumptions determining capital purchases and their amounts.
Determine what issues create a risk of capital lost and if they can be avoided. Make a go / no go decision or place restrictions on the investment based upon this.
Determine assumptions that impact the potential returns and if they can be avoided. Make a go / no go decision or place restriction on the return management based upon this.

In all cases, if the restrictions and approaches become to complex, the investor should consider foregoing the investment.

If as investors we apply this view, we can significantly reduce our capital risk and strengthen our capital gain potential.

Blake Ratcliff (US Naval Academy Graduate & Marine Officer, Serial startup entrepreneur, COO/CEO, multifamily / residential investment founder, and property manager).

Visit http://internationalresidentialrealestateinvestorsassociation.org/real-estate-project-services-due-diligence-reports-business-plans

Trust deed investing has been around for many generations, yet today it seems few people are familiar with how it works or how it compares to other investment options. The economic signals today are mixed and confusing, and investors are understandably unsure about what to do. Invest or sit on cash? Invest in what? Trust deed investments offer one of the best opportunities, and risk-adjusted yields, available today when compared to the other major alternatives: stocks and private equities.

Trust deed investments are among the best risk adjusted yields available today.

First let’s understand the inherent value of risk-adjusted yield. Simply put it is the return potential of a given investment relative to its risk, where the risk is generally measured by volatility. Commercial trust deed funds historically yield consistent returns in the 9%-12% range annually, with very little volatility. Other assets, say small cap stocks or funds for example, have the potential for much higher returns but with much greater chance of loss as well. So the commercial trust deed fund would have a higher risk-adjusted yield.

Stock Market

If we now look at the major stock market indexes and compare them to commercial mortgage funds we see how this pattern plays out. The chart shows three major stock market indexes versus the lower end average of commercial trust deed funds. While there are slight variations among the indexes they all follow a similar path, and all show a lot of volatility. It’s interesting to note that this particular chart shows the stock market during the best part of the recent economic bubble, and stops before the market imploded in August of 2008. While there are periods where the market outperforms trust deeds it is impossible to time the market perfectly, and as we’ve all painfully learned recently those profits can disappear quite literally overnight.

Another important distinction is the collateral behind the investment. Theoretically an equity holder’s investment is backed by the company’s assets, but in reality your capital can disappear into the wind. (Just ask shareholders of Lehman Brothers or the Madoff funds.) Trust deeds are backed by valuable, and tangible hard assets: real estate. While real property can and does drop in value it is not subject to the minute-by-minute trading of wall street, and most real estate will always have some economic value. If the private money lenders do their job right there is ample collateral backing every trust deed investment. And don’t forget, when things go bad the lender (trust deed holder) is first to get paid, but the equity holder stands at the back of the line.

Private Equity

Private equity is exactly what it sounds like: investing money directly into a private company in exchange for an ownership stake. The attraction, of course, is that these mostly smaller, early stage companies offer the chance for eye-popping profits if and when they become successful.

Of course, that’s a big IF. Truth is most of these companies fail, or at least fail to achieve any sort of real value. On top of which investing in private companies is a tremendous amount of work and generally requires significant expertise. This is why it is mostly done through private equity or venture capital funds. (We’ll ignore Angel investing for the time being.)

So what about those eye-popping returns? Well, private equity and venture funds operate on basic portfolio theory. That is, out of every 10 investment about 6 will go completely bust, 4 or 5 will do ok and 1 or 2 will knock it so far out of the park that the fund overall provides a decent return. Nothing wrong with that if you have the stomach for that level of risk. Think of it as the extreme sports of the investing world. In fact, the amount of money required is so high and the risk so great that this is generally an investment class relegated to institutions and the extremely rich.

Stocks, bonds, mutual funds, and even private equity can be valuable tools in your investment toolbox. But the familiar, understandable, reliable and secure commercial trust deed fund should hold a prominent role in most investor’s portfolios.

Robert Purnell is President and Founder of Shepherd Capital Partners Inc., a commercial and private-money lender and trust deed investment manager with expertise in special use assets. For the past 15 years, he has been arranging financing and underwriting acquisitions on traditional commercial real estate and other special-use assets such as churches, senior housing and assisted living, medical facilities, self-storage, gas stations and more. You can learn more about Shepherd Capital Partners at http://www.shepherdcapitalpartners.com or call him at (415) 464-1004.

Copyright © 2008-2010

Would we have invested in that project and released the funding ahead of closing if we had fully considered the financing risk on its own? Would a dispassionate review of the closeability of the financing caused us to forgo the investment? What would our view of returns have been if we had focused on the issues the revenue plan alone offered? What would our view of their expense estimate had been had we trained our analysis on the set of costs alone?

A useful and yet little attended part of the investments is a pure risk analysis. I advocate that as principals creating investments and investors placing capital in investments. That we should add a step to our analysis. I suggest a good term for this is the “Risk Focus Analysis”. In business school, they teach reviewing each alternative and placing a probability of success on that alternative along with estimating its value. Using this technique you are advised to make a choice for your action plan. Unfortunately, this view is in my opinion over simplistic. Instead, I suggest modifications to this approach. First, for plan alternatives that match the business school scenario take the following steps.

Describe the choice(s) you are making and the anticipated results.
Determine their value.
Determine whether there are “events” in the chain that can cause the plan to fail.
Determine the probability of success.
Assign the value based on the probability.
Make a decision based on the “failure events” to keep the option in the list or not.
Choose from the remaining alternatives.

Considering further, many projects don’t really lend themselves to this “alternative analysis” process. Instead, we are looking at an investment project and evaluating its executability and expected profitability. For these cases, a process to determine whether or not to invest and under what conditions to invest is needed. Rather than the simple brute force due diligence analysis let’s consider what our concerns are:

What is the risk that part or all of our capital be lost?
What conditions should we place on the investment to protect our capital?
What are the risks to the projected returns?
What are the risks to the exit plan?

With these items in mind, the investment risk analysis should help work out whether to invest or not and then under what conditions to invest or not. Also, as an investor or investment fund, this can determine basic investment protocols for agreements. To work these our investors should:

Define the issues effecting the potential safety of the capital including financing, guarantees, inventory, or working capital consumption for example.
Define the assumptions determining income.
Determine the assumptions determining expense.
Determine the assumptions determining capital purchases and their amounts.
Determine what issues create a risk of capital lost and if they can be avoided. Make a go / no go decision or place restrictions on the investment based upon this.
Determine assumptions that impact the potential returns and if they can be avoided. Make a go / no go decision or place restriction on the return management based upon this.

In all cases, if the restrictions and approaches become to complex, the investor should consider foregoing the investment.

If as investors we apply this view, we can significantly reduce our capital risk and strengthen our capital gain potential.

Blake Ratcliff (US Naval Academy Graduate & Marine Officer, Serial startup entrepreneur, COO/CEO, multifamily / residential investment founder, and property manager).

Visit http://internationalresidentialrealestateinvestorsassociation.org/real-estate-project-services-due-diligence-reports-business-plans

It is difficult to go just about anywhere without hearing about green these days. It is hard to say whether people are just happy to use as a means of getting more business or if society really does care more about the planet, but the fact of the matter is that positive changes are being put in place to improve the impact we have. One place you might not have realized you can make a difference is with your investments.

Green investing is the act of investing money into companies, properties, etc that are involved in sustainable practices is some way. There are no set guidelines at this point, but various fund managers set their own guidelines of just how green a company needs to be for access to their money. For example, a green investment fund might target companies that are working on technologies to improve the environment.

Other than these green mutual funds, there are also green bonds and green real estate to invest in. With green bonds, the government set up guidelines around what kind of energy is being used for a project and if it is redeveloping a brownfield as a guideline. By investing a green bond you can steer companies towards green projects because it is where the money is. Investing in green real estate investment trusts, you put your money into properties that have proven themselves to be above the norm in terms of sustainability.

The art of green investing is still in its infancy but there are many ways for just about anyone to get involved. If you feel you have done everything you can by reducing your own energy consumption or overall footprint, putting your investments into sustainability as well might be a good decision that makes you feel good as well.

Find out more about green investing at Green Investing Times

A common question is whether it is necessary to cash in all your investments when you emigrate to Australia. The answer is that it is not necessary – but the tax rules in Australia might make it sensible to do so.

It is important to be aware of the following tax implications:

Any dividends from shares and distributions from unit trusts will be liable for income tax in the UK. You will still have a personal allowance even when you are no longer resident here.

The investment income will also be taxed in Australia but any income tax paid in the UK can be offset to avoid double taxation.

Non-residents do not pay UK capital gain tax as long as they remain abroad for at least 5 complete tax years. A good tip might be to delay selling an investment until at least the 6 April following your departure from the UK.

Australian capital gains tax is payable only on the increase in value between arriving in Australia and when the investment is sold. It is therefore important to get a written valuation very close to the date of departure. The amount of capital gains tax payable depends on when the sales takes place so professional advice is important.

Private company shares are subject to separate rules and professional advice is very important.

This is a measure to discourage Australians from investing in foreign investments in order to shelter income from income tax. It subjects investments, which accumulate over time but do not actually pay an income on a regular basis, to income tax. The rules cover Foreign Investment Funds (FIFs) such as shares and mutual funds (e.g. Unit Trusts) as well as Foreign Life Policies (FLPs). UK personal pension funds are considered to be FIFs and are therefore affected but employer sponsored pensions are not affected.

Tax is charged at your marginal rate on any increase in value between 30 June in the current year and 30 June in the previous year.

Timing of a disposal is important as the liability to this tax is only on assets held on 30 June.

A high earner in Australia could be paying tax on foreign investment funds at 46.5% and probably would not want to continue holding such an investment.

Life assurance policies and investment bonds can also be liable to another Australian tax, known as s26AH, when they are encashed.

There is no inheritance tax in Australia. However, UK domiciled individuals are liable to inheritance tax in the UK on their worldwide assets. It is a complicated and lengthy process to change your domicile from the UK to Australia, and owning assets here can make it more difficult.

Currently the rate of UK inheritance tax is 40% on worldwide assets above the annual allowance (£325,000 in 2009/2010). No tax is payable on transfers between spouses and civil partners.

Mike Wilson is a director of Scottsdale Consulting Ltd, having entered Financial Services in 1985 he specialises in pensions and investments as well as expat services and QROPS schemes. He has a wealth of experience in advising clients and in training other financial advisers.

When you do your weekly shopping at the supermarket, do you keep your eye out for bargains to fill your pantry? If canned spaghetti is half price this week, do you buy a couple of extra tins? Shopping for investments is just the same as buying spaghetti. We store investments to create wealth which can be spent in the future just as we store spaghetti in our pantry to be eaten later.

When is the best time to buy investments? When they are cheap. So when the price of shares drops, the logical thing to do is to buy more – right? Well, logical it may be, but human beings are strange creatures. When it comes to buying investments we seem to apply a perverse logic. Instead of celebrating the fact that there are bargains to be had, we complain that the value of the “spaghetti” we have in the “pantry” has fallen. This would of course be a problem if we had intended to sell the spaghetti this week, but it is reasonable to assume that this is not the case. What is evident throughout the history of sharemarkets is that investors buy more as prices go up, then panic and sell when prices drop. Yet logic tells us we should do exactly the opposite. The secrets of creating wealth through investing in shares are to be able to resist the emotional effects of price changes, to make sound investments at the right price and to take a long term view.

By nature, shares are volatile. Those investors who have the emotional strength to stick with the market through its troughs are rewarded with higher returns over the long term than are achievable through investments in fixed interest or property. Declines in the sharemarket are always temporary and should be seen as opportunities to buy.

One of the realities of share investing is that it is never possible to get your timing exactly right. Spaghetti might be half price this week, but next week it could be discounted by 60%, or it might be back up to full price. However, the longer the shares are held, the less important the initial purchase price becomes. If spaghetti increases in price to $5.00 a can in 10 years time, does it really matter if you paid $1.50 for it last week when you could have bought it for $1.25 this week?

If you are retired, you might argue that you won’t be around in 10 years time and that shares are therefore not an appropriate investment. This is not true. The biggest investment risk retired investors face is that they will outlive their investment funds. If you need $5,000 a year to supplement your pension and you live for less than 10 years, then you will require a maximum of $50,000 to be invested in short term, stable investments. Any investment funds over this amount could be invested long term (i.e. for 10 years or more) in shares for a higher return, thus reducing the risk of outliving investment funds and increasing the value of your estate.

Liz Koh is a financial planner and the author of the best selling book – Your Money Personality: Unlock the Secret to a Rich and Happy Life, Awa Press, 2008, available from http://www.awapress.com

For Liz’s best tips for financial security, visit her website http://www.moneymaxcoach.com to receive your free e-book “8 Steps to Financial Freedom”.