making money out of farming without owning a farm
I\'m not always excited about a new investment opportunity, but I have to admit that I really like the concept of the impact of the Fedora Group on agriculture.
This is easy to understand and has the potential to have a real impact on agriculture in South Africa, while also giving investors a decent return.
As an investor, you will buy blueberry bushes, honeycomb or solar panels, and experts will make sure that your assets get the most possible benefits, not grow them yourself.
Fedgroup is a fully diversified financial services group with a department dedicated to generating revenue through real estate investment.
CEO Grant Field sees opportunities to provide alternative income for investors --
Create assets while bringing crowdfunding solutions to agriculture.
Fedgroup has invested in several farm and solar panel projects to learn how to use them to provide fixed income to investors.
After testing the return for a year, it has provided assets to the public through the Fedora Group app, which can be obtained through Google Play and the Apple App Store.
This may bring real momentum to agriculture in South Africa, as Field envisions the use of this model to encourage commercial farmers to work with smaller farmers to develop their technology.
At the same time, it also provides investors with income to choose from.
Generate asset categories.
Investors buy blueberry shrubs, solar panels or honeycomb directly and earn revenue from the products.
Solar panels: these panels are placed on commercial buildings and the electricity generated by the panels is sold to the building.
As an investor, you will buy solar panels for the R5 000 and at 20-
With one year\'s life, you will get an estimated internal rate of return of 10% per year, which means you will get an estimated total income of 500.
Blueberry: Fedgroup works with a professional blueberry farm that uses high-content blueberries
Technology and agricultural technology from Australia.
Plants are dripping.
Fed, which reduces the use of water and breeds in tunnels to protect them from elements.
The farm exports berries and provides products such as wool products and picking n Pay to local retailers.
You can buy blueberry bush for R300 and will get an internal rate of return of 12% per year in 8 years
The annual life of the factory. Over the eight-
During the year, you will receive the total estimated income per Bush R600.
Hive: the Fedgroup is working with a big-
Large commercial farms and two smaller farmers.
You bought a hive for R4 000 and made a profit from the sale of honey and wax.
Farmers make money by \"renting\" the hive to the big hive
Fruit Farms of scale that require bees to pollinate.
Estimated revenue of more than 10-
The annual term is approximately R9000.
What you need to know is I spent 14-year-
The old son takes about five minutes to figure out how it works because the Fedgroup app is easy to use and explains the concept by providing the necessary details of the asset.
The chart on the app shows how the revenue is distributed.
As income is tied to harvest, blueberries and honey can only earn twice a year.
Because solar is being farmed all year round, the income is monthly, although it depends on the number of sunny days. Income Varies -
Income will be inconsistent during this period.
For example, in the case of blueberries, it takes time for the bush to bear fruit and reach its maximum yield-you can only get paid based on the number of berries harvested.
For example, you will only earn R12 in your first year (4%)
But in the eighth year you will get R72 (24%)per bush.
The Hive will give you R180 (4. 5%)
First year and R1 120 (28%)
In 10 years, solar energy will give you R400 (8%)
First year and R1 600 (32%)in year 20.
There is no capital gain, only income --
At the end of the term, there is no value to your plant, hive or panel, so there is no capital payment.
The return shown on the app is an internal rate of return to account for the profitability of the investment.
Keep in mind that your actual Rand return will be higher as you will also have to pay for depreciation of your assets.
Real income is between 17% and 21% per year.
In the case of hive, you will invest R4 000 and receive R9 000 within 10 years, so, in theory, your return minus the capital of the investment is R5 000.
You can do it again if you don\'t need income
Put income into one
Buy more agricultural assets and build a portfolio.
This will increase your total return as it will have a compound effect. Long-term investing-
When you purchase an actual plant, hive, or panel, you are locked into the entire life cycle of that asset for 8, 10, or 20 years, respectively.
Fedgroup is creating a secondary market for those who need to withdraw from the investment, however, ideally, you should only invest if you can invest for a long time. Amount of taxable income
This is not a fund, it is a direct ownership of the asset, and the income paid is the income of your asset, not the dividend.
Since investors have personal assets used to generate income, the income generated will be taxed as part of the income tax.
However, there are several tax breaks that can be applied for, such as section 11 (e)
Loss of income-
You can also generate electricity from renewable energy and agriculture as required by Article 12B of the Income Tax Act.
While Fedgroup helps clients with the paperwork they need to submit these claims, they do not provide tax advice and asset owners need to state the best benefits available to their tax practitioners. Money Wallet -
Cash is stored in the Impact Farming wallet for each asset owner, where interest is earned at 4 points.
Linked to the repo rate, 5% per year.
The asset owners can put the money in their wallets as long as they want.
When the balance exceeds the R300, they have the option to pay them.
They can choose to automatically pay the money each time the wallet reaches R300 or later, or reinvest the money into the wallet and receive the payment upon request.
They can also use the money to buy additional assets. Costs -
The Fedgroup charges a 1% platform fee, for example, R3 per blueberry bush per year.
The return shown is deducted. Insurance -
These assets are covered by insurance, so you won\'t lose money if hail destroys a hive or solar panel, or if your blueberry bush dies. Risk profile-
Since the assets are insured, the risk of losing money is very low.
The risk depends on income generation, because it will depend on the output of the assets, which, although managed by experts, has never been guaranteed in terms of agriculture.
Also keep in mind that income will increase over time, so this is not for those who need maximum income in the first year.
Ideally, you should build a portfolio that provides a diversified revenue stream and then re-
Invest in part to maintain the value of capital.