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Alpacas: Click here to find out why they are the perfect INVESTMENT!
"Home Sweet Home"
AlpacaNaca Farm
Moyock, North Carolina
July 2005
We are Big John
(as he's called) and Leslie Watson-Leake of AlpacaNaca Farms in Moyock,
North Carolina, near the beautiful resorts of Virgina Beach and the
Outer Banks. We have been alpaca owners from 2002 and have built a
considerable herd of over 30 animals. We relocated our family to 7 acres
to start the beginnings of an elite alpaca breeding business by building
our home, a 50' x 45' barn, along with fencing, separate office space as
well as re-seeding and grading for new lush pastures that provide the
best in nutrition for our our herd. We have had great success in the
showring already, and are greatly impressed with our newest cria.
If you would have told us a year ago we would be co-owners of a nationally owned herdsire, we would have thought you were drinking something funny. There was no way we thought we would have been ready for that leap. But here we are, the proud co-owners of a champion producing herdsire, PERUVIAN ION, son of the incomparable Guellermo! Also in our herdsire barn is Thunder's Wonder, a true black full Bolivian son of Fernando, a Bolivian Black Thunder son. And Legacys' Mica, one of few full Bolivian silver grey herdsires in the country! Please take time to check them out on their pages, we hope you would consider them for your next breeding decision!
We WOULD say that we are
trying to breed the best conformation, the finest fleece and to the best
bloodlines, but EVERYONE says that. So here is what its really about. We
want to make sure we breed quality to quality for superior quality,
enjoy the heck out of the process and meet all kinds of people all
across the globe along the way! WE are having WAY too much fun!
What
we have learned so far:
Web Driven Industry
- Get computer educated, use it!! Look at websites, alpacas for
sale, pricing, bloodlines etc. You'd be amazed how much you can learn
from the forums online. See what NOT to do as well.
Farms
- Visit farms whenever possible. Try to schedule visits, most won't mind
if you just show up, but make sure they will be there to show you around
and can give you the time. Ask questions! Get your hands on the animals.
Get a feel for what you are looking for.
Shows
- Are scheduled all across the country. Check out Alpacanation or AOBA
websites for shows in your area. Watch classes, attend seminars, get on
mailing lists for local farms and look at animals in their pens. Talk to
the owners. Invaluable!
Professional
Organizations - Join
AOBA as an associate. You will receive the beautiful Alpaca Magazine
which is very educational in many ways. Learn who is out there, what
they have to offer. Take advantage of the library at AOBA, they have
numerous items that can be checked out.
Tax advisor
- Please talk to owners as well as your tax preparer about the
tremendous tax advantages from owning these soulful creatures. There is
depreciation as well as deductions that can be enjoyed by owners as well
as the investor. You can't hug your stocks!!
Alpacas: Why they are the Perfect Investment
What's the
perfect investment? If it exists, it would have large tax deductions so
that Uncle Sam subsidizes part of your investment cost. It would
generate income on a regular basis. It would allow compounding of your
investment on a tax-deferred basis to help build up the asset value.
There would be a classic supply/demand situation where prices are rising
since demand exceeds supply. It would be insurable so that your risk of
catastrophic loss would be removed. It would offer portfolio
diversification outside of traditional investment choices like stocks,
bonds, and real estate.
Guess what? Not only does that investment exist, but it has an
additional investment benefit – it's a fun, huggable, lovable
investment. A lifestyle investment for those people tired of the fast
track and the volatile investment markets.
Alpacas are the huggable investment as well as the World's Finest
Livestock Investment. USA Today wrote about alpacas as "The Investment
of the ‘90s." We think it is also the top investment of the new
millennium.
Here are a few specifics on the investment merits of these beautiful,
endearing creatures:
• Breeding stock can be depreciated over 5
- 7 years. Active owners can even use their losses (up to $100,000 until
Fall 2004!) to offset other income while their herd is growing. There
are even tax benefits available if you choose to invest passively and
let someone else manage the herd, though the biggest tax savings come
from actively involved management.
• If you have stud-quality males, you
can charge breeding fees of $1500 to $3000 per breeding, further
increasing your cash flow. It is not uncommon for a high quality stud to
earn $20,000+ a year in stud fees.
• All the expenses directly attributable to
the alpacas can be written off – including feed, barn, fencing, vet
care, a portion of your property taxes, equipment, interest expense if
you borrow to purchase, insurance costs, breeding fees, travel expenses
to visit other farms, etc. You can often have your land re-zoned as
agricultural land under the "Greenbelt Law," further reducing your
property taxes. Our own property taxes decreased by over 50% due to this
exemption alone.
• According to industry research, a
herd of five females and two males will typically grow to 126 animals at
the end of ten years. Most females sell for $10,000 to $30,000 each and
males can sell for even more if they are top stud quality (several have
sold for over $200,000!). Your compounding is tax-deferred until you
sell, and the gains are taxed at the lower capital gains rate.
• Since only one cria is usually born
to a female each year, and it takes over 11 months to deliver, there can
only be a steady but slow growth rate of available animals – especially
since only half of the available animals are female. Females typically
begin breeding at two years of age and can produce valuable cria until
their late teens. The animals are very hearty and require little effort.
They have no odor and they are "earth friendly" so many smaller
operations start off with one or two in their back yard.
• Alpaca fleece is highly desirable
and the animals are typically sheared once a year. The fleece can sell
for $300 and up per animal, depending on what you do with it. It is a
luxury fabric, soft and silky, warm and light weight, much warmer than
wool, light as cashmere, and highly sought after. If you turn it into a
finished sweater, blanket, or shawl, it can sell for multiples of this.
That means a $15,000 animal can be depreciated in value by a several
thousand dollars a year, and then generate another 2-6% return on their
fleece each year. In addition, if every other cria is a girl, then your
$15,000 animal can produce another potential $15,000 animal every other
year (a 50% annual return!). It's no wonder that industry studies show
the average annual returns can be anywhere from 20-40% a year. As
investment advisors, we hesitate to even throw out numbers like this
because they sound too high, but the fact remains that you can make
double-digit returns from the tax benefits alone!
• The animals are registered and
their pedigrees documented by DNA testing. No further registered imports
from South America are being accepted so the market is closed to new
animals and bloodlines. It will be many years until the U.S. herd grows
large enough to meet the international demand for the fiber.
• Lastly, the animals are insurable
for their full value so the risk of catastrophic loss is minimized.
Premiums typically average 2-3% annually for this insurance, so it is
well worth the cost for peace of mind (plus it's also a deductible
expense!).
Truly, if a perfect investment does exist, it encompasses many of these
benefits.
Call or e-mail us for more information on the investment merits of
alpacas. We also recommend that you consult your own tax adviser to see
how this can help your tax situation.
Michael Goldston, High Meadow Alpacas