A question nagged me for years, ever since my introduction to American history in Mrs. Roundtree’s third-grade classroom…
I mean, when we learn about the marble-sculpted patriots of the American Revolution — the Ben Franklins, the John Adamses and Paul Reveres of the era — their ultimate success against the British Empire is usually presented as a fait accompli. After all, we know how the movie ends, right?
For me and every other American school child, the story is presented with the air of inevitability. Right leaders, right people, right place. “The Tides of History” and all that.
But no one ever talks about the “alternate ending” to the story of the American Revolution.
For instance, what would those colonial leaders have done if they lost?
Clearly, George Washington asked that same question of himself, almost from the very beginning of the conflict. His answer is one we can all learn and profit from, more than 200 years later.
Britain’s Most Wanted Man
The details come to us from a book I’ve been reading this summer: Nathaniel Philbrick’s Bunker Hill (2013, Viking). The book recounts the events of 1773 through 1776, which turned a small New England rebellion into the wider war for colonial independence.
In February 1776, Washington puts the finishing touches on a plan to put cannons on the high ground of Dorchester Heights, overlooking British-occupied Boston. He knows it could lead to a British attack. And while the high ground gives him an advantage, it doesn’t guarantee victory.
So Washington puts his affairs in order and developed a secret “Plan B.” He knows the coming battle, if lost, spells the end for the rebellion and his former status as a wealthy member of the Virginia gentry.
But thanks to a fortuitous land purchase, Washington has an escape plan to preserve himself and a portion of his personal wealth.
He owns a chunk of acreage 800 miles away, deep inside the Ohio frontier. As Philbrick details, “Washington had originally purchased this vast tract of land as an investment. He was now beginning to look to the property as a possible refuge.” In a letter to his brother-in-law, Washington writes that should “the worst event” happen in the Boston rebellion, his frontier property “will serve for an asylum” from British authority.
Where’s Your Asylum?
These days, there is no frontier. But it’s still possible to create our own redoubt with farmland property. It can serve as an investment or potential income source, but it’s also a place of refuge where we can retreat from the demands of 21st century American life.
These days, the nation of Uruguay might fit that bill. It’s something we’ll be talking a lot about at the upcoming Total Wealth Symposium, October 14 through 17, at Paradise Island in The Bahamas. In fact, we’re devoting a whole extra day to just talking about Uruguay’s real-estate prospects as well as the ins and out of residency and citizenship.
Why Uruguay? Well, if you want to pursue a sovereign lifestyle, it has the kind of factors you (or George Washington, for that matter) would want: Deep-rooted respect for the rule of law, a stable government and vast productive agricultural lands. There’s a reason the country has long been called the Switzerland of South America.
The value of farmland there continues to rise. In April, Uruguay’s farm statistics agency (known by its Spanish acronym DIEA) released its latest data on agricultural land prices. For 2014, they hit a record $3.93 dollars per hectare (roughly 2.5 acres).
Yep, you read that right. Not hundreds or thousands of dollars per hectare. Just simply “dollars per hectare.”
In other words, for the price of a single venti caffe latte at Starbucks, you could be the owner of a small piece of Uruguayan farmland.
At $3.93 per hectare, it’s a 12% increase from year-ago levels and a nearly 70% gain from where prices were in 2009.
Not bad when you consider the decline in value in recent years of nearly every other emerging-market asset.
Ticket Price to Enter the Game
Let’s say you don’t even care about having an offshore haven retreat. All you want is a productive alternative investment. But at what initial cost?
In August last year, a U.S. Department of Agriculture report noted that farmland prices here have nearly doubled since 2005. But the average value of farmland real estate, according to the USDA, is now $2,950 an acre. That’s the average. In the fertile Midwestern Corn Belt, prices were as high as $6,370. At those prices, even a small land purchase amounts to a sizeable outlay of cash.
Compare those to the prices in Uruguay. Farmland values depend on the fertility of the soil, rainfall, access to irrigation, roads, ports, markets and such. Even so, be prepared for the “good” kind of sticker shock. According to Uruguay’s DIEA, the department (think state or province) of Soriano had the highest per hectare farm values in 2014, at $6.70 per hectare (or about $16.50 an acre for a rough land-unit comparison).
No wonder China, with its hungry population and need for new food resources, reportedly looked at large scale purchases in Uruguay. As a result, the country’s general assembly responded with a new law enacted in 2014 that effectively bans such purchases by state-sponsored sovereign funds. But that’s as far as the “ban” goes. The door remains wide open, as it historically always has, for farm and real-estate purchases by foreigners.
At today’s prices, a farm investment in Uruguay seems like a reasonable alternative, and without the budget-busting dollar figures attached to so many other land purchases.
After all, who better to follow for an example than George Washington?
His presumed “Battle of Dorchester Heights” never happened. Rather than storm the fortified hill above Boston harbor, the British decided on a strategic withdrawal and departed the city. But he never sold his Ohio wilderness land tracts, convinced that their value would continue to rise — and no doubt grateful to own the “safe haven retreat” he never needed.
Regards,
JL Yastine
Editorial Director, The Sovereign Society
The post Learn From George Washington’s Secret “Plan B” appeared first on The Sovereign Investor.
