In part 1, we discussed how changing our relationship with money and work is one of the key leverage points for transforming our lives, our society and the world. We explained that designing our interaction with money is a leverage point for creating viral change, because it has a huge “payback” for individuals, can help us fund our dreams, has a huge impact on the success of our projects, and it can be a fun adventure, too.
“Hey, wait - sure it can help us invest in successful community organizing and regenerative projects, but money? An adventure?”
Yes! Once we understand how we are trapped by money, held by the chains of consumer culture, then setting ourself and others free is the very definition of adventure, you Bilbo Baggins you, and experiencing the rewards of our own efforts as we watch our debt disappear and our freedom grow, can indeed be fun, or at least engaging. And plotting out that escape route through Permaculture and investing in manifesting the kind of world we want to see is incredibly enriching.
For most of us who are already interested in things like simplicity, Permaculture or homesteading, the first thing we need to realize is this is not the same old kind of smarmy Think and Get Rich Secret 7 Rules for Vision Boards, fire-walking kind of consumption-driven money advice. And this isn't an article proposing a hyper-capitalist approach to living or Permaculture.
For many in the current generation, the goal is “FIRE” Financial Independence Retire Early, which, for many, is different than the standard meaning of “retirement.” It means getting out of consumer culture and living simply to gain the freedom to work on what you want, when you want, and how you want. Breaking that down, Financial Independence means you’ve lowered your cost of living and saved enough that your income from your investments and savings cover your expenses. For example, using the “4% rule,” a rough rule of thumb discussed in the FIRE movement, if you require $20,000/year to live on, you will be able to retire with $500k or less in savings. IN other words, multiply your yearly costs by 25 and that’s how much savings you will need. With $500k in the bank, you would be free to put your full-time efforts into Permaculture, regenerative agriculture, cultural creation, or otherwise building a better world for yourself, your family and your community. (Check out this article or more information on the realities on the 4% rule, or you can play around with this FIRE Calc to see for yourself.)
This is the kind of perspective you’ll find eloquently drawn out in the new addition of YMOYL, by Vicki Robin. The book even highlights the stories of a few homesteaders and organic farmers who were able to pursue their land-based work on financially stable ground, due to their Financial Independence.
But, from a Permaculture perspective it might be helpful to analyze this paradigm further, to maximize how it meets the different kinds of goals that we might have when compared to other folks. For example, it’s clear that we’ll need to start out with a map that will get us where we want to go financially while accomplishing all the goals I began this article with in part 1: caring for people and the earth, while improving quality of life. Viral change. Leverage.
So, can we have our FIRE cake and eat it without burning down the planet and ourselves too? Does a $500,000 nest egg sound achievable for folks looking to simplify their lifestyles? Are their investments we can make that don’t make the world worse off at our expense? Can we instead invest in the kind of world we want to see? Is there a realistic plan for “Permaculture FIRE?”
My honest assessment is that Permaculture offers many ways to reduce cost of living as well as some important regenerative investments. And some will be able to happily make that happen. High earners with jobs in engineering, computers, business or medicine may be able to save up $500k in just a few years while learning some major Permaculture skills through the process of being frugal. For them, a conventional FIRE approach may be the best path to their dreams, and Permaculture might be the key to making their frugal lifestyle both fulfilling and regenerative.
But for others of us, the dream of early retirement often represented by the FIRE movement may not be desirable, or it may only build up unrealistic expectations, especially for people who simply want to prioritize their permaculture, homesteading or simple living goals. If your income is only around $25-30k to start with, and there are good reasons to not want to do what is necessary to earn more, then consistently saving $5-10k/year could be a challenge, and at that rate it will only take, hmmm, 50 years or more to reach retirement.
Once we free ourselves from consumer culture and realize that the question really is: “Your Money or Your Life?” then we may decide that seizing that time NOW is more important to us than the deferred reward.
But in that case, changing our relationship with money is even more powerful and transformational. For example, the first few steps on the YMOYL path are to eliminate debt (and with it any high monthly obligations) and to save up a few months worth of expenses in an emergency fund. With no (or few) high-interest debts and a 6-month slush fund, imagine the freedom and security you’d have. Imagine what different choices you’d make if you had 6 months to find a new job if you needed to, or accept a risky new opportunity if it called.
For many of us, our hope is that Permaculture or homesteading will be our escape plan from the rat race, not a nest egg, the stock market, and eventual retirement. What we’re suggesting is that there’s real potential to combine the tools of Permaculture with tools in YMOYL.
This starts with the first three rungs of the Financial Independence Ladder to Freedom, as Vicki Robin calls it:
1 Freeing your mind from money and consumer culture and building the financial intelligence necessary to see how our pavlovian programming makes us waste our life energy on things that only make us miserable, so we can start investing in what we really serves us.
2 Get free from debt. Consumption is the carrot that keeps us wasting our lives, debt is the stick. Part of this is to change our behaviors to stop investing in our own chains, and the other part is systematically paying down debts, starting with credit cards and other high-interest loans.
3 The third rung is to directly invest in our freedom by building up an emergency fund large enough to cover 2 months, or better yet, 5 or 6 months debt. This is the tool that allows us to say “take this job and shove it,” or to say yes to other opportunities as they arise. Imagine what you’d do if you could take a 6-month sabbatical to start a new business, find a higher-paying job, learn a new valuable skill….
I’ve come to think of these three steps as some of the most important work of Permaculture, or for anyone who wants to work to make the world a better place. With this goal accomplished, you’ll be able to bring your full self to your work, with less stress, more honesty, more freedom, more clarity, and more ability to help others make smart choices.
If these first 3 rungs have a lot to offer aspiring Permaculturists, then Permaculture Design has a lot to offer the last 2:
4 The 4th rung involves drawing on all our non-financial forms of capital, including our knowledge, experience, natural capital, relationships, and so on. In the new edition of YMOYL, this is referred to as the ABCs of wealth.
5 The final rung is building up savings to get you to early retirement.
For some of us, this roadmap might be exactly what we need. But Permaculture design, with a rich set of tools for non-financial capital for rung 4 and a bank of viable regenerative investment opportunities for rung 5, can provide us with more options than the traditional FIRE scenarios.
After we used the first 3 rungs of the Ladder to start freeing up our ideas around money, Kim and I realized we didn’t want to seek FIRE in the race for FI and “retirement,” we just wanted to feel FREE: Financially Resilient and Economically/Ethically Empowered. We wanted to “catch and store” (Holmgren, Principles) energies that would allow us to weather the storms of an economic system that appears to us to be failing. And we want to be resilient enough that we can survive even if important projects we take on fail, or if “life strikes” in some other expensive way. And we want to feel economically empowered. We want to be able to choose to start projects, organizations, or businesses we think are important. And we wanted to feel in control of our own economic destinies, rather than relying on other fragile systems for our livelihoods.
But we also want to be ethically empowered, so that if an employer or investment opportunity ever conflicts with our values, we can afford to say “take this job and shove it.” And finally, that word “empowered,” we want to feel like we have the agency to invest in creating the kind of lives and society we want to see. Now that’s feeling “FREE.”
And we also wanted to begin investing in manifesting the kind of lives we wanted to live, and kind of world we wanted to live in.
In the next article we’ll apply our Permaculture Design analysis to steps 4 and 5 of the “Financial Independence Ladder to Freedom” (https://yourmoneyoryourlife.com/the-financial-independence-ladder-to-freedom/#comment-4142 ) give examples different forms of practical non-financial capital, look at what makes a good “regenerative investment,” and we’ll explore what Permaculture FREE scenarios could actually look like, talk numbers and look at investments and income streams in the context of Permaculture and homesteading.