Bill Gates says he now owns 1 out of every 4000 acres of all US farmland – why has he taken such a big position?
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Sixteen years ago, Bill Gates moved on from his role at Microsoft, the company he founded, to focus on philanthropic efforts with the Bill and Melinda Gates Foundation, providing billions of dollars of capital to noteworthy projects every year.
With a net worth of $132.2 billion, according to Forbes, Gates’ portfolio is widely diversified. There’s his Microsoft (MSFT) stock, of course, but that accounts for just $42.3 billion, according to sites that directly track his public investments. The rest of his fortune is spread out among a number of private interests, such as accumulating U.S. farmland.
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Recent estimates are that Bill Gates owns around 270,000 acres of farmland around the United States. Gates himself has said in a recent Reddit AMA that he owns roughly 1/4000 of all farmland in the U.S. Given there are more than 893 million acres of farmland in the U.S., this number appears to be roughly correct.
For instance, over the past six years Gates has reportedly spent roughly $113 million purchasing Nebraska farmland and now owns about 20,000 acres in that state alone.
But the question is: why is Bill Gates investing so heavily in this asset class? Here’s what to consider when it comes to investing in farmland.
Investing in agricultural stocks/ETFs
FarmTogether is an option for accredited investors. But for retail investors who don’t fit into that upper echelon bucket, fear not. There are plenty of other investing options to consider that provide exposure to this asset class.
Exchange-traded funds (ETFs) and agricultural stocks (either individual farming firms or those supplying the sector or involved in agricultural development) are plentiful. The thing is, picking the right ETF with the right exposure to the best assets with the most promising prospects is difficult. Finding the right partner in this regard is important.
Among the financial institutions investors should consider is Interactive Brokers.
Interactive Brokers allows investors to buy and sell agricultural stocks and ETFs without any commission fees. Additionally, there aren’t any of the same restrictions as being an accredited investor (no minimum income or investment sizing requirements), making it easier for investors like you and me to buy into this asset class.
And for those looking for unlimited trading in this sector, IBKR Lite is the way to go. Fractional share ownership, access to real-time data, and a number of materials investors can review to learn more about specific ETFs and individual stocks are all available at the IBKR Lite tier.
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Investing directly in farmland
Farmland is a broad asset class that refers to acreage that can be farmed. It’s an attractive investment for those looking to hedge against inflationary periods. According to a 2023 article from Nasdaq, the value of farmland has been shown to rise alongside inflation, with the value of U.S. farmland hitting 10.2% in 2022 at a time when the average inflation rate was 8%.
The thing about investing in physical farmland is the price tags associated with large farms (or even small to medium-sized farms) can be massive. These are also assets that aren’t as easy to get financing for, particularly for investors and those without direct farming expertise.
The USDA and other organizations do provide programs for individuals to purchase farmland, but for all intents and purposes, this asset class is one that’s reserved for accredited investors.
Enter FarmTogether, a company offering a range of funds and bespoke investment opportunities for investors looking to put some capital to work in physical farmland. This company’s product offerings are tailored to investor needs. With more than $2.1 billion in capital deployed and a conservative and disciplined investment philosophy, the company hits on many of the key needs of investors looking for exposure to this asset class.
The company’s proprietary sourcing technology and experienced team with best-in-class partnerships means that less than 1% of the deals that enter the company’s pipeline are passed onto investors.
You’re still required to be an accredited investor to take part in FarmTogether’s funds or to use any of the company’s bespoke services. But for those in this group looking at investing in farmland, this is an option worth considering.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
