Passive income

Tio(uncle) Orlando owns a eucalipto forest. Year one he and his partner grow the tree from seeds they bought. First they start growing baby trees from seeds in test tubes. Then they plant the small young trees. There are 150 kinds of eucalipto trees in Brazil. Some are for medical purposes. Eucalipto is used to cure lung disease. Some are good for furniture. Some are good for paper. First year, the small trees needed to be pruned and debugged. Then the trees will basically take care of themselves. It takes four year for Orlando’s type of forest to grow. The trees are sold for making paper. China is now the biggest paper producer in the world. But they have to import pulp.

Now, let’s do the math. An acre of land for the forest is about R$20,000. 13 acres cost total R$260,000. First year planting costs about R$100,000. Property tax is about R$200 a year. At today’s eucalipto wood price, the forest will yield R$800,000 in four years. The buyer will cut the trees and transport the wood away.

The forest pays for itself in four years. Even with wood prices going down, it hardly can be a losing deal.

This is what I call a good passive income. You work one year and vacation for 3 years. What a life!

Few young people can grasp the essence of passive income. Building a multiple income is more important than building a fortune. Imagine at 25 years of age, one buys one forest every five year. Or for that matter, one buys a house or apartment every five year! Then one truly gain financial freedom—having their destinies in their own hands. When one has ample income, one can pursue one’s interest, instead of driven around by money and finances. Most people work all their lives for the banks paying off loans and government paying off taxes. Fortunes will follow when freedom from money is attained.

Planting young eucalypyus trees
http://www.youtube.com/watch?v=D9kvxXz8zkI&feature=related

Pruning Eucalyptus for High Value wood logs
http://www.youtube.com/watch?v=ONAa2oAUUHA

Eucalyptus Forest on the Mountains..
http://www.youtube.com/watch?v=1vf7ZWPBswk&p=39AC7F683AA1D34B&playnext=1&index=21

Harvesting eucalyptus
http://www.youtube.com/watch?v=Ouf3i0-gP98&feature=related