When it comes to commodities, they are hotter than ever before. Being able to own any natural good, whether in shares or physically is an inflationary-proof way to lock-in gains overtime. What is even better is owning real land through either real estate or farmland for recurring dividend-paying cash flow.
From the Saudis in the Middle East to rich oil reserves in the heartland of America, oil giants such as Shell and Chevron in the US have not only had a stellar year able to price gouge due to supply chain bottlenecks, the commodity spike, and car-buying spree, but were able to take full advantage of soaring inflation building a defensible business model and MOAT.
According to Bloomberg reports, thanks to the University of Texas’ prized commodity, oil-rich land, their investment portfolio has boomed while the most prestigious Ivy Leagues at the top of the rankings in terms of endowment size haven’t been able to beat the market this year, taking on a traditionally conservative based approach instead, currently missing out on potential returns in and outside of alternatives and private equity.
Whether you’re a foundation or an individual investor, in order to beat the market and stop trading your time for money, you must either own:
A: IP (intellectual property) to earn royalties passively
B: Real estate
C: Land
D: Art
E: Get a degree and put that investment in yourself and the markets of course!
All these investments appreciate as you can depreciate relevant qualified expenses, even through a 529, and offer a store of value that is non-fungible. In an educational sense, it’s called an economic premium!
The University of Texas System has something no university, even a prestigious Ivy League doesn’t: 2.1 million acres of distant oil-rich land. Believe it or not, land is more valuable than any US News and World Reports legacy admission system ranking after all.
2.1 Million Acres Breakdown
Since 1995, farmland has outpaced artwork, real estate, infrastructure, commodities, and plain fixed-income by almost 2-fold and is rising steadily in ownership by institutional and individual investors for it’s safe hedging and store of value. Rising alongside commodity prices and inflation, it thrives when no other macro/micro indicator is! People have to eat so land must be maintained.
Just like land, what gives physical tangible real estate’ it’s non-fungible qualities and scarcity aren’t the appliances or furniture that are included, nor the actual building itself, it’s the land it occupies.
Location, land, and ownership are precious feeling that people pay top-dollar for, something boosting UoT’s endowment size to the fullest, literally filled to the brim of oil!
But what you do with the land matters most. Just like a home, if you don’t take care of it, it will start owning you. Read here on what that entails.
Let It Flow, Let It Flow, Let It Flow!
Not until you start treating your land like a real investment with care, do you start seeing the sweat and tears of maintaining it pay off and earn a juicy dividend/royalty down the road!
The university leases out the country’s largest oil field to some 250 drillers, including giants like ConocoPhillips, which pump out 300,000 barrels of crude oil per day and pays UoT royalties.
Since universities are corporations at the end of the day, UT Endowment System can be considered a Fortune 500 public-company at this point competing against players such as Saudi Aramco or the large oil giants expecting its biggest payout this year due to climbing oil prices which hit a record $120 a barrel in June.
In Sum, the UT System brings in a whooping $6 million a day from its oil assets! Although shy of a couple hundred billion from the oil giants, remember college endowments earn generous donations all the time from various other means as non-profits such as from wealthy alumni which corporations cannot.
With real estate, taking advantage of rents through a lease is an inflationary-proof investment yet to become truly wealthy, owning land like Bill Gates, one of the largest private investors of farmland is the way to go.
Class in Session
Luckily, now with commercialized real estate through CrowdStreet and Fundrise, artwork through Masterworks, and farmland, all kinds of alternative investments are commercialized and democratized! Although FarmTogether’s initial investment fund requires $100k, you can buy individual farms, orchards, gardens, etc for a min of $10k! (Not sponsored, just a future hint to a possible sponsor:))
If there’s one thing we can learn from college, it’s outside of the classroom material as well, specifically inside their highly diversified endowments! A terrific hands-on learning experience that truly appreciates long-term.
UT is one of the few universities with a nontraditional investment portfolio. Alongside UT’s prudent A+ approach, Emory has rolled in Coca-Cola shares, Northwestern’s endowment earns royalties from Lyrica, and even Harvard has owned some California vineyards since 2012.
Stay diversified, never put all your eggs in one basket, and stick to the physical tangible stuff for ultimate rewards. And if you’re obsessed with the rankings as institutions are, you’ll be at the top of the list in no time with tapping into land and real estate! More yields will flow your way! An investors’ dream come true!