Someone gave me a Madison Timber sales document. Here it is: Timber return spreadsheet.

The document appears to be from 2011. Here are some questions:

  • if this business is so lucrative, why do they need my money?
  • if they have cash flow to start repaying in a month and pay the loan off in a year, why would they need to borrow money from individuals at 10%?
  • why wouldn’t they go to a bank and get all the money they needed at under 10%?
  • wouldn’t a bank have loaned them the money if they had that cash flow and held assets in a commodity?
  • the hot under the radar investment was…timber? for real?
  • look at a chart for the timber company Weyerhauser (WY). Its stock peaked in 2007, got hammered in the collapse and still hasn’t recovered.
  • who needed all the timber? sawmills were in the toilet because no one was building anything, right? has construction recovered to this day?
  • are these types of investment pitches ever legitimate?

If you want to invest in making loans, you might want to try peer-to-peer lending with companies like Lending Club. You might even get 10% returns. But it will involve investing in loans with a high risk for default.