Beyond his role as co-founder of Microsoft, Bill Gates has remained among the world’s richest people for almost four decades. Years after passing the baton at Microsoft, Gates remains the ninth wealthiest person in the world, according to Forbes. His net worth is more than $131.8 billion.
Gates’ investment portfolio. Much of the billionaire’s fortune comes from various investments in hotels, services, and environmental projects. However, a sizable portion of his wealth comes from farms and farmland. According to The Land Report, the billionaire is one of the largest landowners in the U.S., with almost 250,000 acres of farmland.
Conspiracy theories debunked. This strange investment raised all sorts of conspiracy theories. Some have claimed that Gates has bought up so much farmland to starve Americans for some strange reason and control the nation's food supply. This, of course, is not true. In an AMA on Reddit, a user asked him: “Why are you buying up so much farmland? Do you think this is a problem with billionaire wealth and how much you can disproportionately acquire?”
The tech mogul’s response was far less convoluted than expected: “I own less than 1/4000 of the farmland in the US. I have invested in these farms to make them more productive and create more jobs. There isn’t some grand scheme involved—in fact, all these decisions are made by a professional investment team”.
The “I’ve got land!” is back. There was a time when owning farmland was a sign of wealth. However, technological advances have caused investors to look elsewhere, but only for a brief time. They soon realized that farmland was a limited commodity, so they bought large tracts for economic gain.
Gates wasn’t the only one buying up large tracts of farmland. In a much more discreet way, and without sparking conspiracy theories, Amazon founder Jeff Bezos ranks well above Gates in the volume of farmland owned, occupying the 25th place on the Land Report list with almost 165,000 acres of land.
Higher returns than the stock market. Farmland has become an increasingly profitable investment. People who have nothing to do in the world of finance, such as the hot tub streamer Amouranth, have publicly confirmed that they’ve bought farmland as an investment, achieving returns of almost 7.8%, according to official U.S. Department of Agriculture data.
Due to this high demand, real estate investment trusts (REITs) have created investment products with these assets, allowing small investors to enter the market with minor sums starting at $100.
Warren Buffett also wants to be a landowner. Berkshire Hathaway's CEO is no newcomer to real estate investing. Despite having always been a proponent of REIT funds for profitability rather than owning land outright, Buffett couldn’t resist buying a "little parcel" of 400 acres in his native Nebraska.
“In 1986, I purchased a 400-acre farm, located 50 miles north of Omaha, from the FDIC. It cost me $280,000. I knew nothing about operating a farm. I calculated the normalized return from the farm to then be about 10%. I also thought it was likely that productivity would improve over time and that crop prices would move higher as well. Both expectations proved out,” Buffett said in one of his annual letters to Berkshire Hathaway shareholders, according to Yahoo Finance.
Farmland investment trend. While the stock market shows signs of exhaustion and inflation is punishing savings, farmland remains an attractive investment asset for billionaire tycoons and foreign investors.
According to Reuters, the number of U.S. farmland acres owned by foreign entities increased by more than 8% in 2022 to 43.4 million. While this represents just 3.4% of the country’s farmland, the pace of foreign farmland acquisitions has increased since 2017, averaging nearly 3 million acres annually.
It's clear that buying land is a current financial trend, whether as a domestic or foreign investment.
This article was written by Rubén Andrés and originally published in Spanish on Xataka.
Images | European Union | Farm Bureau Federation | Wallpaper by talya_p on Wallpapers.com
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