Previously we discussed the concept of “Opportunity Cost”. If you choose to do one thing, you forgo many other choices. This “cost” is true whether it is money, time, or any other asset.

We talked about the opportunity cost of going on a ‘once in a lifetime’ 10 day trip to the 75th anniversary of D Day on Omaha Beach in the middle of our Valencia house deal. We talked about the opportunity cost of buying a classic car in 1984 for $10,000.

Here are the other 9 investment options, in (perceived) order of risk to capital:

  1. Cash
  2. US Treasury Note
  3. Bank Certificate of Deposit (CD)
  4. A Bond Mutual Fund (VBTLX – Total Bond Market Index Fund)
  5. A Stock Mutual Fund (VTSAX – Total Stock Market Index Fund)
  6. A REIT Mutual Fund (VGSLX – Vanguard REIT)
  7. United States 12 Month Oil Fund, LP (USL)
  8. Gold
  9. Angel Investing (investing in startup companies)

We have discussed all of the alternative investments (“Opportunities”) except Angel Investing.

“An angel investor (also known as a private investor, seed investor or angel funder) is a high-net-worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company.”

Even though we started TheMonopolyProject (TMP) two years ago, we still do not have an index for ‘Angel Investing’. Why? I’ve asked Jim Goulka, Chairman of the “Arizona Tech Investors” angel investing group of which I am a member, with no luck. There is not a publicly available index for angel investments. 

I’m removing Angel Investing as an option for two reasons:

  1. It is difficult, if not impossible to find an index that we can track the Angel Investing option.
  2. And the definition above, points out that you basically have to be a ‘high-net-worth individual, i.e., “rich”, to be an Angel Investor. Formally, you have to be an “accredited investor” to participate in angel investing although there are now some crowdsourcing options that do not require that status. So, if you’re already “rich”, you’re probably not interested in getting there via angel investing.

We are going to replace Angel Investing with another option that has performance that can easily be tracked and is available to all investors; not just the rich or accredited. Previously we have replaced “Crowdfunding (real estate)” with an investment in Oil: “United States 12 Month Oil Fund, LP (USL)”.

 

I considered cryptocurrency, specifically the granddaddy BitCoin, since anyone can buy it and it is all over the news. BitCoin has surged in value.

 

“October 5th [2009] The first Bitcoin course towards exchange dollar is published: 1 USD = 1,309.03 BTC”

Since we started TMP, it has increased tenfold; from about $4,000 per bitcoin to over $40,000 now. We are going to pass on cryptocurrency as an investment option for now.

We have decided to replace the Angel Investing option with a “Timber” EFT: “iShares Global Timber & Forestry ETF”. The price in March 2019 when we started TMP was in the low $60s per share. We will assume $62.50/per share which equates to 1600 shares. The current price (10 May 2021) is around $97 per share so our initial $100,000 would now be worth $155,000, good enough for first place!

This is understandable since the news is full of stories like these:

“Soaring Lumber Prices Add Nearly $36,000 To The Price Of A New Home”

“How Investors Can Play Surging Lumber Prices in 2021”

“Lumber Stocks Might Not Be Glamorous, but They’re a Good Investment”

“Lumber prices have soared to records. Demand for wood is skyrocketing. The shares of wood suppliers are surging.

And yet, trees themselves are dirt cheap in places like Louisiana, where timber supplies are plentiful.”

I’m going to close with one of my favorite singers, Patty Loveless doing “Timber, I’m Falling In Love.”