Investing the Permaculture Way

One of the cornerstones of many financial strategy, including the one presented by Jacob L. Fisker in ERE, is to invest your money to "make it work".

I like the idea of investing in good business that can make the world better and return a bit of their surplus to me the investor. I am not so enthusiastic about speculating on the other hand.

Anybody have any thoughts on how one could go about investing in a more permaculture way?

Plants, tools and education are my favs for a direct return. This goes for individuals and community's as well.

Slow Money is an investment method being developed to facilitate this:
http://slowmoney.org/

Synchronistically, the banner at this top of my window is we the trees crowdfunding. this is another method
http://www.wethetrees.com/

A non-monetary investment is in policy change (and this might end up as a monetary return if it allows you to create a business you weren't allowed to before (i.e. greywater system installer in California)

Developing Natural Capital is another great investment.

I just found out about the "slow money" movement literally a couple days ago, so I'm glad to see that mentioned here. Real people investing real assets in their local community is critical to our survival. The Federal Reserve Ponzi Scheme is doing to the American People what the tilling and chemical fertilizer mono-crops did to the land in the 20's. Stripping us bare, and leaving a dusty waste land behind. Borrowing money from the banks is like buying carrots and garlic from China. Just plain bad for everyone.

I was thinking we should check our understanding of the idea of "investment". Typically, we are taught to think of "investing" as a form of making loans - i.e. copying the way the banks do it. What if, instead, those with money "invest" by way of taking part ownership in a local farm-business venture with those who have the know-how and energy to run the business? Then the money guy has a vested interest in the success of the business. The guy with no money gets land to farm and the ability to increase his assets with his hard labor. They guy with money gets an income and/or food from this new farm. One day, the farmer can buy out the money partner, and they both part ways better off than they started, and the community has a good healthy stable and reliable local food source. The investor can then start over and help another farmer get started.

On the other hand, if money is just "borrowed", then it is impersonal and nobody really cares if it fails. The farmer is not out anything, he just surrenders the land. The lender is not out anything because he already got interest payments and some principal repaid, and can then sell the assets and write of any loss on his taxes. Profit becomes the motivator so the lender is encouraged to seek giant amounts of acreage and huge machinery to invest in because that is more profitable and less effort.

Seems to me that a reasonable "permaculture" investment idea is for a guy with money to create a partnership with a local permaculture farmer and buy a farm for the farmer to work. This would give a permaculture farmer his dream that he otherwise might never obtain, and the "investor" has some control over his investment as part owner, and can help ensure the farm's success by working closely with the farmer. The farmer has to be part-owner, otherwise he is just a "hired hand" and that kills motivation and creativity.

Invest with the permaculture credit union!
You'll probably make more interest in the stock market, only the green companies of course.
Or be brave playing angel investor...I am surprised we don't see more individuals here looking for investors.
You could seek ethical new businesses on crowdfunders such as indiegogo, wethetrees, and kickstarter.

You could try peer to peer lending. Presumably if you look through the profiles, you'll find a few that have suitably permaculture goals.

There are also some sustainable investment oriented ETF's and mutual funds

ESG Shares

Ten New Green Mutual Funds

Sustainable & Responsible Mutual Fund Chart

Test your soils and ammend mineral deficiencies.

Plant a tree! Simple.

Buy a cow and a bull. Breed. Repeat.

Teach a child about farming.

Build a pond, throw in some fish.

Raise poultry. Compost their manure in deep litter.

....ways to really invest in the future....

Adam Klaus wrote:Test your soils and ammend mineral deficiencies.

Plant a tree! Simple.

Buy a cow and a bull. Breed. Repeat.

Teach a child about farming.

Build a pond, throw in some fish.

Raise poultry. Compost their manure in deep litter.

....ways to really invest in the future....

None of that is likely to help you get to the point where you can buy land in the first place...

I find that if I go through all the evaluations I put a company through before I do business with them as a customer (and sometimes that may be as simple as that they are the only company in town and I would have to drive 50 miles to find a competitor), then I should not feel bad about taking a share of their profits as a stockholder.

Logan Simmering wrote:You could try peer to peer lending. Presumably if you look through the profiles, you'll find a few that have suitably permaculture goals.

There are also some sustainable investment oriented ETF's and mutual funds

ESG Shares

Ten New Green Mutual Funds

Sustainable & Responsible Mutual Fund Chart

I think there are far better ways than to invest than via a mutual fund that seems to be jumping on a bandwagon in words alone. ETSs don't allow investors to actual own shares of stock (aka directly invest in a company) - they are more similar to buying options in the future performance of an index, be it solar or gold. As far as the top 10 "green" funds, I don't get goose bumps when I look at the top 10 holding in the bulk of them, which include Bank of America, Honda and Google. Granted there was 1 that was heavy in solar energy in the top 10, but the % of the total portfolio held by the top 10 stocks in this fund was small.

Personally, I like land - you can even buy land (as long as you don't live on it) inside of you IRA. Investing in land, be it just to leave it alone or enjoy it seems pretty permie as well as smart. just sayin'

The challenge for some of us is investing with sustainable values AND profitability in mind. I rely on investments for things that absolutely require money, so I can avoid the employment debacle, and spend my time growing food. It means that, as "compromised" as it might feel, the investments require attention to do well. I check on them daily, if I can, and am frequently researching promising companies and ETF's and so on. Sell the losers and buy more of the winners.....

I'm right there with you Alder. My point was basically buyer beware, always more to it than a title - do your homework and ensure that you are actually getting what you expect. Personally, I don't want to watch the market every day or even every week - I did that for longer than I want to admit, so hats off to you!! I also wanted to throw out land as a true investment (not your home/homestead). I have bought some land in a retirement acct., I "lease" it to a guy that farms it. What I earn from him goes directly into my IRA as property income (just like a dividend), no immediate taxation. I don't know if may consider this option.

I think there is little that beats the investment in naturally productive capital such as trees, ponds, etc.

There are also those investments that reduce the need for financial capital (rainwater catchment, retrofit with insulation, etc)

But if you have spare cash lying around that you want to keep in the financial economy...

Mosaic Solar is a feel-great option for modest returns: https://joinmosaic.com

For higher returns, the solar industry in general has been through a major consolidation (read "bloodbath") and massive fortunes will be made over the next 20 years in that industry. Think PV on most roofs in the developed world a decade from now.

yukkuri kame wrote:

Mosaic Solar is a feel-great option for modest returns: https://joinmosaic.com

Oh, that's cool. Wish I could invest in that (lousy SEC accredited investor regulations)

I am inspired by Mosaic (https://joinmosaic.com/). They are available to all in California and New York (without fees?), and I think accredited investors across the US. Although I was initially drawn to the site as a feel-good, donation-type investment, Mosaic seems to have grown up a lot - they are a smart diversification option for folks looking for something similar to CDs or bonds. I've only invested a few hundred dollars but hopefully they'll email me when they have more projects online. From what I understand, it's not equity in the solar projects, just secured debt - basically I'm making a loan for part of the solar installation itself and will be paid back with interest (4.5%) as those panels generate electricity over time. I wish there were more options like this out there. I've also generally liked Calvert Investments (sustainable mutual funds) and Lending Club, though I would much rather invest in solar than in consumer debt!

Permies, please post if you know of other green investing opportunities like Mosaic. I wish groups like http://benevolencefarm.org/ had P2P lending instead of just donations - maybe one day!

-Frugal JLW

What would actually be quite nice is if there were a permaculture oriented niche peer to peer lending platform (and of course the rules governing such things were less hindering). Then again, everyone here is pretty vehemetly antidebt, so maybe such a thing wouldn't work out.

Logan Simmering wrote:What would actually be quite nice is if there were a permaculture oriented niche peer to peer lending platform (and of course the rules governing such things were less hindering). Then again, everyone here is pretty vehemetly antidebt, so maybe such a thing wouldn't work out.

I'm not anti debt. I'm anti STUPID DEBT. This would include things like borrowing a little every month while living beyond one's means. It also includes the purchase of most consumables, financing vacations and other entertainment.

Borrowing for education, land or to advance a proven business can make perfect sense.

I get the impression that most Permaculture people are not in a position to be loaning out and risking a large amount of money in the pursuit of a permaculture minded goal. The kickstarter thing is cool as it lets small investors help moderate sized projects get accomplished. I've been tempted at times to ask how many "well off" folks would be willing to pony up some serious dough to develop large landscapes that are not their own.

Like if I said:
I have 55 acres of land in Maine that could be a serious learning hub and a profitable business venture if managed right. It needs a "full bussiness team", Laborers, Buildings, Earthworks, Trees, Animals... all that Jazz. I have the passion but not the time or all of the education to pull it off on my own. I'd love to bring a large, in depth, profitable, teaching facility to the Northeast. What I lack, I know I lack. What I know, I'm pretty sure I know. With the right people and the funding, it's absolutely possible.

Are there any people well off enough and willing to take that kind of risk? I think that the fact of the return of investment is "slow" is what drives people not to invest. Most of us just can't tie up that kind of money for that long, especially knowing that the majority of these ventures don't work out at all.

Again we get back to well intentioned people, poorly managing things and wasting money in the name of doing "good". And many times, there's a great idea that just doesn't get the funding or the attention that it needs, and it starves to death.
I'm a person with a little time, a (very) little money and a little land. I've got a big idea, and a solid base of knowledge but could use a hand in many areas. Anyone wanna chance it? Maybe make a million bucks?

Craig Dobbelyu wrote:I get the impression that most Permaculture people are not in a position to be loaning out and risking a large amount of money in the pursuit of a permaculture minded goal. The kickstarter thing is cool as it lets small investors help moderate sized projects get accomplished. I've been tempted at times to ask how many "well off" folks would be willing to pony up some serious dough to develop large landscapes that are not their own.

That's actually one of the neat things about P2P lending, it isn't one large sum being lent by an individual, but smaller amounts bundled together, in basically the same manner as crowd funding, except with an expected return (and terms of payment and all that jazz)

Logan Simmering wrote:

Craig Dobbelyu wrote:I get the impression that most Permaculture people are not in a position to be loaning out and risking a large amount of money in the pursuit of a permaculture minded goal. The kickstarter thing is cool as it lets small investors help moderate sized projects get accomplished. I've been tempted at times to ask how many "well off" folks would be willing to pony up some serious dough to develop large landscapes that are not their own.

That's actually one of the neat things about P2P lending, it isn't one large sum being lent by an individual, but smaller amounts bundled together, in basically the same manner as crowd funding, except with an expected return (and terms of payment and all that jazz)

I agree with the P2P lending model and it works for a great number of cases. The inherent issue being that it's not encouraging deep pockets to get on board. Sure, maybe some do but a lot of those High dollar perks on kickstarter don't get purchased. Lots of "small investors" is great. But let's face it, who's gonna really make sure their 100 check is being spent wisely? Maybe 40 dollars went to the project and the other 60 went in the pocket of the fundraiser. It's not enough money to really be concerned over so most people don't keep close tabs on it.
Sometimes I get the feeling that unless you start attracting huge dollars ($250,000-wicked big) in big lumps some small projects just languish and die, when they could be the next large scale permaculture resort or learning center. Not for lack of effort or passion, but from simple underfunding or poor managment. The other thing is that when you have many investors, you have many people to please and be accountable to. That may not be the best option for some situations. Some projects could work very well with one or two core investors and a team of paid experts. Big investors have a lot to lose so they stay involved and make sure things get done. Experts in any field go where the money is and will work to their full potential under suitable conditions. I think this keeps both parties focused and on task and that's where innovation and progress can be made. Nobody is worried about the money running out. (unless somebody is messing up bad.

I don't know... Just some ideas

Interesting question Adrien,

I've pondered on the subject as well. It seems to me that there aren't too many investment vehicles available today that offer either sustainability, security of capital, a reasonable return on investment, and - in the case of stocks and most bonds - ethically invested capital.

Current investment products, like the above-mentioned mutual fund, and solar stocks, offer very little diversification and therefore little protection from risk. As we have seen in the last few years, the oversupply in the PV market has reduced the profit margins of existing companies, and therefore the investors got burned. You gotta stay diversified, and if you concentrate all your money in one or two companies, your potential to profit is high, but your potential to lose almost everything is even higher.

I think that the best way to invest is to buy ETFs that track the general market. They offer lots of diversification, little risk, and, if you purchase ETFs that offer dividends, the market may be down, but the dividends make up for the loss. Get a discount brokerage account, buy ETFs, collect the growth and dividends later.

When it comes to the "ethics" question, I think that it doesn't matter how ethically your money is invested, if you use the growth to improve your property and the world around you. You might make a few bucks off of coca-cola or monsanto, but if you use those few bucks to buy tree saplings or tools for your property, you're a winner. And if you want to go with P2P lending, slow money, microloans, that's a choice you can make as well, but know that the return on those investments are more"doing the right thing tingly feeling in your fingers and back" than monetary. Which is equally respectable, don't get me wrong!

In the end, the permaculture princples guide us to shy away from conventional investments, and invest in our land and our community. But if you need the money to grow so that you can buy that 5 acre property you're been eyeing for the last little while, it is very reasonable to buy those investments to liquidate them at a later date so you can improve your situation.

If anyone is interested in a bit of investment help, I'll be glad to help. I'm no professional, but have been learning about personal finances so that I may one day purchase a property and have investment income to assist me in the first few years of implementation.

Adrien

Marianne Cicala wrote:I have bought some land in a retirement acct., I "lease" it to a guy that farms it.  What I earn from him goes directly into my IRA as property income (just like a dividend), no immediate taxation.  I don't know if may consider this option.  

Hi Marianna, if you see this: I think a logistical challenge of doing this is choosing a self-directed IRA custodian, and those custodians charge fees.  What custodian(s) have you used, and what was your experience like with them?  Thanks.

Sustainable & Responsible Mutual Fund Chart

I checked this out and 1919 Socially Responsive Balanced Fund certainly sounds good doesn't it? Until you look at the managed funds in the mutual fund - Apple, JP Morgan, Estee Lauder. Not paragons of permaculture or REAL social responsibility (not corporate PR "social responsibility").