“Twenty percent discount?” I excitedly asked.
“Yes, it’s selling for twenty percent under spot price.”
“That’s about a $250 discount per ounce! Let’s buy some!” I said.
He looked back at me, tilting his head a bit, “Well it’s not that easy… They’re selling it as dust or small nuggets.”
“So it might be fake?”
Dan continued, “No, I’m not really worried about that – I know it’s real. I’ve been to the mines and seen them getting the gold out of the ground. It’s just that, well, it’d be hard to make a transaction.”
I looked at Dan, who had become one of my better friends over the past couple of years, “Ahhh… you’re worried about getting robbed. They know you have cash on you, so they would just rob you.”
“Well, yeah, that’s one of my main concerns.”
I thought for a second, “There has got to be a way to make it happen. Twenty percent discount is just too good to pass up.”
Looking out the front windshield as he was driving, “Yup. I’m sure there is a way. And I bet we could get an even deeper discount than that… Colombians are desperate for US dollars because their currency, the peso, has been absolutely thrashed.”]We continued driving away from Cali airport, where Dan had just picked me up, silently thinking to ourselves.
Dan and I knew very well that the Colombian peso was going through a very tough time, losing more than 50% of it’s buying power in only a year. It was one of the main reasons why I had flown into Cali to meet with him.
It seemed that there was opportunity everywhere, including gold.
But, we were after a different kind of gold – brown gold.
We drove for a couple hours into the hills that surround Valle de Cauca – one of the most important regions in all of Colombia due to its fertile agricultural land and large seaport on the Pacific Coast.The area is unique in that the weather is both cool and humid, allowing for various types of crops to flourish unlike anywhere else in the world.
Colombia has long been known for its ability to grow profitable crops – both legal and illegal.
Neither Dan nor I wanted to do anything with the frowned upon crops – we were after the brown gold. If we could get it at the right price, we could profit for a long time. Maybe even the rest of our lives, like an annuity.
Several hours after we left from the airport, we finally arrived in the small town of Montenegro.
Dan and I stuck out like sore thumbs – two six foot gringos in a land with nearly zero international tourism. Perhaps we were the only ones hunting for brown gold? I doubted it, but we certainly didn’t see evidence of any others, despite the stunningly beautiful landscape and European styled buildings.Colombia is stuck with a horrible reputation from the violent drug war that climaxed during the nineties. Today, most of that has changed, with the only remaining hurdle of the Colombian economy being the stigma that Pablo Escobar gave the country.
How would the country climb out of that predicament? How would Colombia clean it’s act up to entice the average tourist to come visit and spend money?
Truthfully, that wasn’t our concern. All we were after was the brown gold that we could purchase for rock bottom prices. Dan and I felt that we were at the perfect time to finally strike a deal.] ]We had been doing due-diligence for nearly three years, waiting for an opportunity to enter the market… we finally had our chance.
When we first ‘penciled out’ how we’d profit, the Colombian Peso was at 1900 to 1. That’s right. 1,900 Pesos to 1 US Dollar.
Now, it was 3,000 to 1. An enormous difference if you’re purchasing with US dollars…
Those numbers we penciled out suddenly started to make a lot more cents.
We must of looked at nearly 100 brown gold deals. Some were cheap and some were expensive, in Colombian terms, but they were all steals in US Dollar terms.
But we weren’t after the best deal. We were looking for the best quality brown gold.
The quality would determine how well our future payouts would work. If we bought something that was cheap, but poor quality, then our annuities that we expected to get for the rest of our lives might dry up in a couple years.Dan and I wanted brown gold that would last.
We wanted to yield a return every year, all from a simple one-time investment. We’d reinvest a portion of our profits to keep the deal running, but we’d also make sure to pay ourselves well.
In addition to the Colombian Peso declining in value, coffee prices were also down, which in turn, lowered the value of brown gold – dirt.
Dan and I were in search for dirt.
Dirt is just like gold. It’s a physical asset, it’s timeless and it’s finite (even more so than gold). But, there’s something that dirt has over gold… not only does dirt appreciate over time (and keeps up with inflation), but dirt can also provide yield.
Dirt literally grows money. Coffee, cacao, bananas, sugar, fruit and all kinds of delicious food that humans must consume to stay alive.
That’s what we were looking at. Land that produced valuable food.
But, it’s not all fun and profits. In fact, it’s an extremely frustrating, stressful and risky venture to find (and purchase) agricultural land. Particularly in an area that has one of the highest murder rates in the world.
Hey… you gotta take risks right…?
The risks aren’t only limited to murder, though. There is the possibility that you can get scammed. Meaning you think you are buying a piece of land that will make you money, only to find out that you wired money to some crook – all you end up with is a fake deed to a nonexistent property.
You get caught standing in a game of high risk musical chairs – and there is no one to bail you out.
Additionally, there is one more risk that keeps most people away from investing in foreign countries. That risk is that the country is foreign. There’s a language barrier, a cultural barrier and a trust barrier.
That trust barrier is what separates gold from land. You can physically hold gold. You can only hold land under whatever authority ultimately governs the area.
So, more risk… more reward…right?
More like: more work, more reward.
We were willing to put in the work. To put in the time, to do the due diligence, and ensure that we were dealing with the right people.
Most importantly, we were looking to make a good deal.
And yes, the risk of investing in a country that has known corruption was certainly concerning.
But, with all of those odds stacked against us, we still knew we had to act.
“In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.” -Theodore Roosevelt
So… you’re probably wondering about how to get that free house.
Well, nearly every piece of land we looked at included a house – but the land was priced without the inclusion of the home.
In other words, profitable agricultural land is being sold for only the price of the land.
In fact, one of the properties we looked at included three homes, but the price per square meter of the land was cheaper than even surrounding farms without homes! Basically, three homes came for free on the agricultural land.
Colombia is a perfect example of real estate selling for less than the cost of construction. It would cost far more money to build many of the homes included on these farms than the total cost of each farm.
Ok… now the really important part… how much are these farms going for???
A fully operating and profitable (in the 20%-40% annual yield range) farm starts in the $200k range and goes up.
Makes you want to put a straw hat on, huh!?
Especially when the farm looks like this:
Hey Cody –
Interesting stuff. I’m not sure how to approach your website, though. Is your content about money or experiences? You seem to look at both subjects, and you say this combination is part of what makes wealth, but it feels like you’re examining two options without picking one or the other, and without truthfully uniting them. Such cool stuff here! I can tell you know a lot of great stuff that I would love to learn from you. What are you trying to communicate to me? I’m getting mixed messages.
– John Thomas
Thanks for the comment.
I’d say you’re spot on about how to approach wealth – a combination of both money (investing) and experiences.
Perhaps it’s quite strange to look at it this way, as our society seems to demonize one without including the other.
Nonetheless, your point is well taken and I’ll try to do a better job of integrating both together.
This is exactly what I would like clarified- Thank you, John, for expressing it so well.
Like I said to John, I’ll try to unite the two concepts together in a more concise way. However, it’s important to be able to balance both ideas – which is incredibly difficult to do.
That is why so many wealthy people are unhappy… the grass always looks greener on the other side.
I must ask. After reading and becoming intrigued with your direction to achieve financial success is the reason for this site to acquire investors?
Well, I’m not selling anything and I’m not taking on investors… so no.
I’ve lived in Ecuador, and the climate is similar. So are the land prices.
I liked this article. It reads like a story, but had economic implications. But, it’s only half finished! I hope you’ll tell the rest. I like the concept you have of money and experiences being combined. For a long time, I have been thinking that to make money you need to slog through your work day in a cubicle, wishing for a weekend or for your paid vacation days you accrue during the year. There will never be enough of them, and then it’s back to the salt mines until you can get more time.
I hope I can glean enough information from your writing to truly live my life with enough money to make those memorable experiences possible. The experience of going to Columbia sounds amazing, no matter the outcome!
Could you do well in Columbia? Sure – you could do well anywhere.
But it’s interesting how you didn’t mention the socialist government that has wrecked the country’s economy over the last few years, or the hostility to American and European investors that is politically popular.
More importantly, South American countries tend to have weak property rights and a tendency to take foreigners’ investments for political gain.
For me, the countries of investing interest in Latin America are Costa Rica and Chile, with governments that are much more friendly to property rights and foreign investment.
Sooty to sound so negative. I hope that you prove me wrong. Thanks for bringing us these great opportunities.
Respectfully, I don’t think you know what you’re talking about.
First, it’s Colombia, not Columbia. (Also, not sure about the hostility towards US investors… I’m sure there are certain cases, but there are many, many people happily investing there right now without any issues. Plus, there are residency incentives for investments…)
Second, Costa Rica is hardly a place to invest. A place to live, visit, and enjoy? For sure. But for a price.
Third, the whole draw to Colombia from an investment stand point is because of the currency arbitrage opportunity. Chile has a similar situation, but is still expensive. Costa Rica does not have this opportunity at all.
Fourth, you’re right, many Latin American countries have property issues. But many don’t. Mexico currently has 1 million US citizens living there as foreigners, many of who own their property. Similar examples are in Panama, Peru, Uruguay, Belize, and Brazil.
Now, all that said, it looks like you are after safety – which is a great investment strategy. But, when you don’t go out and explore other options you’re going to be stuck with average returns and ordinary investment opportunities.
Hi Cody, I have ready all of your articles, and even took action on buying some marijuana stocks. I think you bought at a better price, but just by 2 cents.
But about buying land in colombia, what would you do on that land, and how would you get started?
Yes, how much risk is needed? I read your advice on finding opportunity, wherever you think there is profit, but for me, that’s difficult. I really cannot move or fly, so I dream and imagine what you are doing as exciting and fascinating. I did have that mindset when I was in Afghanistan. Wow, is land cheap there? Perhaps, some over inflated. Some locked by government. I had a local friend who sold carpets and made so much money off contractors, then blew it all in building his dream house in Aino Mena, Kandahar. That’s a U.S. money sponsored town for some elite. I imagined investing in the land outside of Kandahar Air Base that was basically oozing with copper. That’s from a survey by the Army Corps of Engineers. Is there any other opportunities besides land? I’m in the medical field.
Dear Cody Shirk,
I love all your stories but i think you should start vlogging you’re stories are amazing and would be really entertaining to watch. 🙂
Follow me @codyshirk on Instagram for exactly that… lots coming soon.
So whats up.?its been a year.I live in oaxaxa on the beach.Im also intrested in coluumbia.HOW ARE THINGS NOW .thanks
Things are great. We’ve traveled to Colombia and many have invested in farmland and/or purchased residential real estate.
Hey Cody thanks a lot for this writing, I am from Colombia but was living in the USA and would like to get a FREE land for a self reliant project, do you have any idea on how to do this please ??
I would appreciate any help, thanks a million in advance !!