Thoughts on Investing with Added Personal Value

A while back, I wrote about

my best friend (besides my wife), John. John doesn’t spend money on frivolous things at all – he spends way less than he earns and is really careful with his money, saving up for the future. He lives in a very small apartment in a poor neighborhood, bicycles to work, and doesn’t engage in any expensive hobbies.

Until recently, he had been socking his money away in an ordinary savings account. He bought a few certificates of deposit along the way to increase his savings rate, but he was (and still is) pretty risk-averse. He had no interest in putting his money at risk.

Several months ago, he shocked me by announcing he had purchased twenty acres of undeveloped land within driving distance of Des Moines, a pretty serious investment. Given how risk-averse John was with his money, the purchase really surprised me – he never struck me as a real estate developer.

Recently, he invited my family down to the land to camp for the weekend – he had wanted to “clean it up” some before we checked it out.

We were really impressed.

It turns out that John spends many of his free evenings down on this patch of land, clearing away brush, building walking trails in the wooded area, and building a small camping area. He built a picnic table there and a fire ring and made nice piles out of the brush he had cut, perfect for small campfires.

The majority of the land is a large, fairly flat prairie, with a small creek on one edge of the land and woodlands covering perhaps a third of the land. As we hiked all over the land (with our kids in tow), John kept pointing out all of the things he had done to improve things. He had cut back poison vines here, cleared brush there, made a trail here, collected berries there, and so on.

It was obvious he was thoroughly enjoying the land.

I asked him about his long-term plans with it. He has a “ten year plan” for the land that involves starting with a large shed in which to store equipment, followed by everything he would need to put on the land for it to be wholly self-sustaining: a wind turbine or two, geothermal heating, a well, a large garden, and so on. He intends on paying for each piece with cash. Eventually, he intends to build a cabin of some sort, then a larger home after that, building as much of it himself as he can.

Even more notable, he intends to pay for every step along the way with cash.

It’s obviously going to be a good investment. A nice, self-sustainable home within driving distance of Des Moines and plenty of fairly cultivated woodlands all around will have some serious value in ten or fifteen years. If John chooses to live there forever, he’s got a great situation around himself. If he chooses to start the whole process again because he enjoys the work in his spare time, he can sell the whole thing and get started with a nice bankroll.

The real value, though, is that John is really enjoying the investment. Being outside and working on the land like this is his hobby. The cash he put into the land might return him a nice financial profit someday – or it might not. But it’s returning him a very large personal happiness return right now.

To me, that’s a great investment. I don’t care about whether he gets a 1% return or a 10% return on his money from this. What matters is that he’s enjoying that investment. It’s bringing joy into his life in a way that a chunk of money in the stock market could never do.

When Sarah and I drove away from there, we both couldn’t help but think of our dreams of owning a home in the country. While I don’t have the passion for building that John does, I certainly have a lot of passion for the natural beauty of living in an area like that, where the only houses in view are on the horizon.

The return you get from an investment isn’t always represented in dollars and cents. Sometimes an investment can return a lot more than that.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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