Fedgroup - Impact Farming Investment

mr_norris

Expert Member
Joined
Jun 12, 2007
Messages
3,531
Blueberries are showing as 7%, and solar panels 9%.

Things were really ramping up for me early last year with the solar panels. I have 5 (I think) and there was a stage where I hit R500 per month back. Covid slapped earnings like a bitch and it dropped to R100. It's slowly climbing back up again.

I listened to a show with Simom Brown and one of the impact farming dudes from Fedgroup. Aparently they had issue with vacancies at some of their sites when Covid hit. Not surprising at all. But I am quite hopeful that it recovers nicely.

The solar panels seem to be the ones with the most promise IMO, but the entry point is so high. 6k a pop is a bit steep now. I am undecided if I'll be buying more in the future.
 

Shayd

Expert Member
Joined
May 12, 2009
Messages
3,248
Thanks guys. Was looking at the solar panels due to the ease of Tax calculation and consistent return. house almost paid off. Was thinking of putting in around 120k into the panels then rolling income into new panels annually.

In ZA the panels seem like a no brainer.

Can one of the guys that did the accelerated depreciation tell me if its fully tax deductible? Ie against your normal income tax?

If so, I know some high income guys that would be real interested.
 

MightyQuin

Not amused...
Joined
Oct 6, 2010
Messages
26,696
Anybody here that would be interested to buy mine, PM me. I am emigrating next year and am trying to get rid of everything tying me financially.

Blueberry Bush x 2
Solar x 1

Good opportunity to buy at old price.
 

Hamster

Resident Rodent
Joined
Aug 22, 2006
Messages
39,979
Hey folks. So been looking at impact farming and the solar panels.

What seems to be the general consensus here? What has worked out as the better of the options provided?

1. You are better of investing the money in an ETF
2. This complicates your tax return
 

beefymoocow

Expert Member
Joined
Jun 19, 2006
Messages
1,266
Does Fedgroup disclose their contract with their suppliers agreements. Particularly with their solar installation. Want to know the terms and conditions of the agreement.
 

Shayd

Expert Member
Joined
May 12, 2009
Messages
3,248
Does Fedgroup disclose their contract with their suppliers agreements. Particularly with their solar installation. Want to know the terms and conditions of the agreement.
Im curious about this as well
 

taheera

Well-Known Member
Joined
Sep 23, 2016
Messages
140
1. You are better of investing the money in an ETF
2. This complicates your tax return
i have a question regarding the returns published as IRR vs inflation/investing in this impact farming. Does this take inflation into account as prices of electricity and berries should increase year on year. Therefore, if i take a R10 000 investment at 5.5% interest compounded monthly over 20 years (240 months) my interest earned for the entire period is R19966, making this an average of R998 per year. then R998 divided by R10 000 = average of 9.98% average return per year. is this what the IRR calculation is doing ? because then in my understanding i am getting 10% average return per annum but it actually is only 5.5% compounded monthly. The interest wont be taxable either as its under the interest taxable thresshold.
in comparison if i put the money into impact farming and i wrote off the R10 000 in year 1 for solar panels, and i am at 40% marginal tax rate, i saved R4000 in tax, but then my total investment returns for the next 20 years which amount to R30 000 are taxable at 40%, meaning i have paid tax of R12 000 over the 20 years, thus my nett tax i paid out is R8000 which means i am worse off when comparing this to a simple 'put the money in the bank scenario' in which case i got a 10% average return with a 5.5% monthly interest rate and i paid no tax ?
 

Hamster

Resident Rodent
Joined
Aug 22, 2006
Messages
39,979
i have a question regarding the returns published as IRR vs inflation/investing in this impact farming. Does this take inflation into account as prices of electricity and berries should increase year on year. Therefore, if i take a R10 000 investment at 5.5% interest compounded monthly over 20 years (240 months) my interest earned for the entire period is R19966, making this an average of R998 per year. then R998 divided by R10 000 = average of 9.98% average return per year. is this what the IRR calculation is doing ? because then in my understanding i am getting 10% average return per annum but it actually is only 5.5% compounded monthly. The interest wont be taxable either as its under the interest taxable thresshold.
in comparison if i put the money into impact farming and i wrote off the R10 000 in year 1 for solar panels, and i am at 40% marginal tax rate, i saved R4000 in tax, but then my total investment returns for the next 20 years which amount to R30 000 are taxable at 40%, meaning i have paid tax of R12 000 over the 20 years, thus my nett tax i paid out is R8000 which means i am worse off when comparing this to a simple 'put the money in the bank scenario' in which case i got a 10% average return with a 5.5% monthly interest rate and i paid no tax ?
No idea. Don't buy it.
 

taheera

Well-Known Member
Joined
Sep 23, 2016
Messages
140
Blueberries are showing as 7%, and solar panels 9%.

Things were really ramping up for me early last year with the solar panels. I have 5 (I think) and there was a stage where I hit R500 per month back. Covid slapped earnings like a bitch and it dropped to R100. It's slowly climbing back up again.

I listened to a show with Simom Brown and one of the impact farming dudes from Fedgroup. Aparently they had issue with vacancies at some of their sites when Covid hit. Not surprising at all. But I am quite hopeful that it recovers nicely.

The solar panels seem to be the ones with the most promise IMO, but the entry point is so high. 6k a pop is a bit steep now. I am undecided if I'll be buying more in the future.
thought below would help
SOLAR PANEL INCOME :

fyi solar income for me on 2x solar panels @ R5000 each for january 2021 to december 2021 - 12 payments received totalling R1061 (december payment received jan 2022 is included) = return of 10.61 % for year 2 january to december 2021
year 1 january 2020 bought the panels, delay in setting up panels etc, first income only in September 2020 ; income september 2020 to December 2020 = 4 months received = R316.41
Total from 1 january 2020 to 31 december 2021 = R1377, i work out my return since day i bought panels - so this gives me 6.89% return per year (R1377/24 months x 12 months) / R10 000 )
if you want to work it out over the 16 months since i started to receive money, then you looking at 11.80 % return, depends how you see it

BLUE BERRY INCOME

YEAR 1. - Bought 10 @ R300 = R3000 in January 2020, miraculously the bushes grew (??) and in March 2020 i got first payout of R125.30, we get payouts twice a year , next payout was january 2021 (re december 2020) = R105.90
YEAR 2 - first crop in March 2021 received R105.90, awaiting on january 2022 payment for december crop
thus total received for YEAR 1 = R231 = 7.7 % return
 
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