So permies; what would you invest in?

I'm wondering what you would invest in if you had a chunk of money that you wanted to avoid being swallowed up in an economic downturn or used in an unethical manner. I don't mean, what to buy for the zombie apocalypse. I mean, what to invest in that will hold its value during the second great depression.

I'm interested in both physical objects or assets and in more traditional "investments;" ways to generate continuing income from an investment, and things to buy that will be more valuable in ten years time, come what may.

Land and silver.

Land, and pre-pay the property taxes for the next hundred years.

Fences.

Outbuildings.

Irrigation infrastructure or swale construction.

Tools and equipment for growing and preserving food: shovels, canners, grinders, knives, bowls, crates, root-cellar, etc.

Self-investments: Land [and the development of it], High Quality Lifetime Handtools [and high fuel to work ratio power tools like a Chainsaw], Trees [seriously, until your land can no longer contain them, you can never have enough trees] and seeds. The best most locally adapted seeds you can get your hands on, which you then go on to landrace into something locally adapted with tons of genetic diversity.

Financial Investments: More land, LOTS of land as a group [there's an investment vehicle for this, don't recall the specifics off-hand] structured in such a manner as to provide a buffer zone. Local farm enterprises. Local craftsmen.

EDIT @Joseph: I'm pretty sure they don't allow pre-payment of taxes, I've heard of people who tried. Best bet there is probably either precious metals or just having a productive property that can pay for itself.

Kyrt Ryder wrote:I'm pretty sure they don't allow pre-payment of taxes.

Laws vary from state to state. Nevada for example allows pre-payment for one's expected lifetime. Yes, it can be a hefty sum. However, only the current improvements are taxed, not any that are constructed after the tax is pre-paid.

In any case, with so many governments being so close to having to openly declare bankruptcy, I expect pre-payment of taxes to become more and more desirable to governments.

The problem with the above posts is that these investments are illiquid....they can't easily be converted into exchangeable value or cash, and they can't easily generate income. Land values go up and down, and the only way to generate income from land is to work it yourself, or to have tenants, which brings it's own potential for drama. I guess that after 20 plus years of getting ready for the world to end and it not happening just yet has changed my attitude. I want income-generating investments that are stable and more or less liquid. Few stocks and "funds" fit this well, especially when you add in the qualification of "morality" of any sort (i.e. no arms manufacturers, no tobacco, no GMO's, etc.) Creative, cutting edge, and arguably beneficial companies (such as those that make solar panels and wind turbines, for instance) tend to be just as volatile, or moreso, than the general economy. Recently I've discovered a couple of venues, Mosaic (which focuses on solar panel installations) and Lending Club (which does direct credit loans, cutting out most bank profits) which seem to offer yields much better than bank accounts or CD's, but without the stomach churning up and down of stocks.

Land, older equipment that is fully depreciated (holds its value as long as it keeps running..), fruit trees (cheap investment for big future return) and livestock (can make a little cash in good times and cover a rough patch in tough times).
The biggest way to buffer through a recession is to rely less on cash! Feed yourself and have enough left over to sell or barter.. have a specialty around (like excavator and a trailer) to pick up odd jobs..

I would put some into silver and gold, maybe 10-20%. Make sure its physical stuff that you hold, and in small denominations where you can sell it in small pieces or use it in trade.

Pay off all debts.

Buy good quality lasting stuff that you use.

Buy some bitcoin - it might fail, but if it succeeds you'll be very thankful. Play around with a little and learn about it.

I would buy (directly) some Dow stocks, probably using a Foolish Four (fool.com) strategy, although I probably would buy and hold rather than sell yearly to rebalance. You can buy directly from these companies instead of paying a broker, as long as you buy enough (usually $500 or so to start last I checked). You can also have them set you up with a DRIP account, where the dividends automatically get reinvested in more shares, and they can even be set up as IRAs so there are no taxes until you sell. These big corporations might not be the most ethical, but they will likely survive almost anything, especially the more diverse ones.

Land or real estate can be good if it is productive or can be made productive. Paul's idea of getting more land than he can use but parceling out bits of it is a good one for him. He can market it well enough to get the ants. If you can't get the ants then that won't work for you, but it might get you thinking about other ideas.
I know one guy who got rich by buying distressed rental properties, putting almost nothing into them, and renting them out to section 8 folks. He was able to use the profits to build up a mini empire of slum housing, with the rent paid mostly by government. Slimy for sure, but it worked for him, and a more caring person could do the same but fixing up the properties. The keys would be finding really good deals on the properties and being careful about what tenants are accepted (section 8 type folks tend not to care if they damage the property). If I was going to do this, I might try to specialize in renting to recent immigrants, setting them up with garden spaces. [But I have tried being a landlord and that's definitely not for me.]

I generally subscribe to the Boglehead philosophy of owning a broadly diversified portfolio of investments and simply staying the course because I know I can't predict which investments are going to be good, and I don't think you can either. What I can control is the efficiency of the investments, so I buy low expense ratio mutual funds and land with low property taxes (or, even better, that can be made to have low taxes).

You can find land that other people can't see the value in, maybe it's too dry or too remote or too hilly or too stoney or too acid or too alkaline for conventional techniques. With permaculture you can find something that will grow with minimal effort. With an investment rather than income timeframe you can think long term, maybe plant some trees that will be worth a lot of money in 5 years or ten years or twenty years.

Land! Though I live on an island with high population pressure- the price of land is never going to go down here.

Land - Why ?
They dont make it any more and the number of customers keeps going up

Definitely land, if money was no object i'd like to be in a more isolated location than presently too.

How about rental properties?

Are there local businesses you would consider investing in directly? You're more exposed to risk that way, but you also know more about local businesses (and outsiders are unlikely to know much about them or invest in them). It could also be a good way to build up your community.

Land. With timber. For liquidity.
Properly managed pine demands a good bit higher price.
Basically that involves trimming the limbs off to encourage a straighter more clean trunk.
We call big pines with no limbs on the first 60'+ of the tree plantation pines. They make power poles out of them. It's big money compared to the regular pine groves.

If you want your grandkids or great grandkids to be millionaires when they retire plant black walnut.


On the taxes thing I believe you could set up a trust or something that has $blah in it, stocks, and cd's and have a manager to handle the taxes and what not.

If I had 10 million dollars I would invest in a combination of the following:

> Land with abundant fresh water
> Rentable structures on my land
> A permaculture development team (paid jobs) with the goal to create a system that creates a surplus of food far beyond the needs of those living on the land (The surplus would be sold in good economic times and given out in poor economic times)
> Social projects in my community that I believe in
> Social projects worldwide that I believe in
> Angel invest (for equity) in other entrepreneurs I believed in
> Travel and experiences to deepen relationships at the familial, community, and global level

Diversity is good in permaculture and it is good for investing. Researching and observation are critical in investing. No one will take better care of your money than you will.

For cash reserves above what you would keep at home is best put in several different banks or credit unions. Research local and regional banks if you want to stay away from the big banks.
If you have a checking account at one bank open a savings bank at another. Look for a deal on CDs at third bank. That way if one goes under you don't loose everything.

Ron's Advice is good. Some in gold, some in silver, bitcoin, and land spreads it around and the reduces risk.

If you have the time and inclination to actively monitor and manage stocks you can build your own portfolio. This tends to work best if you enjoy researching companies and running the numbers.
It is not for the buy it and forget it. types. The advantage of doing your own research is being able to figure out if the company fits your values and is worth the asking price. Outsourcing the research and monitoring is easier if you don't mind the reduced control over your money. The same applies to bonds and other paper investments. Make sure you know the fees charged for buying, selling, and maintaining the investment. Keep in mind that you will get hit with taxes for selling too.

Invest in your health, good insurance, and proper estate planning. Doing these can save you huge amounts of money and time over the long haul.

Land, then putting things on the land that have benefits for decades or more, like fruit trees and ponds that can supply food most years. Also guns and ammo are always a good idea. I am buying traps most years, too. Overall, I like to invest in things I can use.

The best investment for the future is your own business, preferably more than one. Gain skills experience in a number of fields, if possible, or otherwise study those who are doing useful, in-demand work (Dale Hodgins frequently posts about his successful business endeavors). The best investment I ever made was my own business, the second was land, the third our house (now mortgage free). I agree with Kate who suggests not putting all your eggs in one basket.

Alder Burns wrote:Creative, cutting edge, and arguably beneficial companies (such as those that make solar panels and wind turbines, for instance) tend to be just as volatile, or moreso, than the general economy. Recently I've discovered a couple of venues, Mosaic (which focuses on solar panel installations) and Lending Club (which does direct credit loans, cutting out most bank profits) which seem to offer yields much better than bank accounts or CD's, but without the stomach churning up and down of stocks.

One thing I don't like cutting edge investments is that since we are now 6/7 years out from the last meltdown we don't really know how these investments are going to handle the next crash/recession when it comes. I'm reminded of Warren Buffet's comment that "you only find out who is swimming naked when the tide goes out."

Buying gobs of land all around me and permifying the crap out of it.

Oooo.. Or setting up gobs of endowments for passive income, so that I can continually by land and permify the crap out of it.

The Inland Northwest Food Network is starting up a local investing program. I have only attended one of their meetings, but they seem to be setting it up as a peer-to-peer lending group that will help build our local food shed. It is in it's early stages so far, but seems to have promise.
http://inwfoodnetwork.org/local-investing/

I'm new here, so hello! I've been receiving the forum for some time now, but never registered and posted before now.

By my username I may sound biased, but at the moment I would invest in craft beer. Specifically a start-up with an individual entrepreneur, or team of them joining forces who have some real industry experience. I am actuall part of the industry and have been for 15 years for a few different businesses with different brewery models. They all work right now. They are growing fast all around our country and not slowing down. Talk to me in 5 or 10 years and the story may have changed, but those that fail are those without experience. The craft beer consumer is becoming more sophisticated everyday and can tell the difference in quality products. The average breweries are experiencing double digit growth annually and many are experiencing 40% year to year.

I make beer, forage, garden, have bees and live in a dense forest in Michigan. I love the ideas and conversations I read on this site. Thank you!

Jeff

For the younger crowd, skills development. That can mean many things. The guy who wears many hats is seldom unemployed. When I sold life insurance, in my early 20s, we were expected to sell various investment schemes. I would typically ask clients, "Have you bought all of the tools of your trade, to maximize your earnings." "Have you taken every training course necessary for you to reach your full potential". I never did sell any of those investment schemes. Never sold a whole life policy either. Everybody got 10 or 20 year term. Sovereign Insurance is the only Canadian life insurance company to ever go bankrupt. I'd like to think that I helped that happen.

A machine. Anything rare and expensive, that pays really well when in use. Saws, drills and sanders are common. Concrete planers, jackhammers, excavators and barges are less common, and more likely to pay well. I charge $50 per hour for jackhammer work and have developed techniques that greatly reduce the physical toll.

I would have to be fabulously wealthy, for me to consider allowing anyone else manage my money.

Ranch flipping....
I was thinking you could buy a ranch in desert, brittle environments for a low price since its depleted. Then use Allan Savory, holistic mob grazing strategies to restore the grass and pasture. Some permies might even help or pay rent.
Then sell the ranch after its been restored.

The returns are immense:
First you improve earth because you convert depleted desert in to grass thus improving soil and carbon sequestration.
Second you get a return when ranch is flipped.
Third, you can make some money from livestock or renting property.
Fourth, I believe there could be great tax benefits especially if you live there for 2 years while converting.

As mentioned above this would not be liquid investment but some of best investment right now are illiquid such as rental property.
Any thoughts or anyone tried this?

#1 Land with water on it. Become self sustainable. Fruit trees, chickens, grass fed cows, and a big ass garden
#2 Some Gold, and more silver than Gold
#3 Buy stock in Tesla
#4 Tech stocks
#5 Don't tell anyone about it, if you know what I mean.

plant black walnut
plant koa (hawaii)
both above are long term to payoff
i read about paulownia some time ago but don't know if there is much market, but it grows fast supposedly

Paulownia does grow surprisingly fast, but I'm not sure how well it would do without active management. In China Paulownia grown for lumber has workers manually peeling side buds off to ensure high quality logs.

In my mind it's really best grown on short rotation coppice for fodder or mulch [mass quantities of massive leaves] and fuel. Ruminants go nuts for the stuff.

I think I'll chime in on this one since investing is what I do and I get this funny twitch in my right eye when the majority of what I see is 'real estate' and 'gold/silver'.
How did you feel about your gold when it was down over 50% recently? How did you like your real estate when it lost 30% of it's value in 2007?
Firstly let's note, there is risk to everything! CD's, real estate, gold, stocks, mutual funds, cash under your mattress, it doesn't matter. No risk, no reward. The question is, what risk are you comfortable taking and what do you want/need out of the investment.
Secondly let's note, stocks are not inherently evil just because there are bad people in the world. Remember, there are thousands of stocks in the world that are operated by people just like you and me who go to work to put food on their table, clothes on their backs, and a roof over their family. They work, make the company money, the company stock goes up. Investors get rewarded for allowing those companies to hire workers and do business.
So, to get to the original question, what will hold it's value in the second great depression? Well, we've had that already, it was 2008. And if you were in stocks, what happened to you? You had a bad year. But, if you just held on to your pants, you were back to breakeven in just a couple years. Not a big deal. Just takes some patience and discipline. But some might ask, why take that chance anyway? The answer, because stocks actually do great over time. In fact, the returns are phenomenal. The problem most people have is they behave badly and panic when they should sit tight and buy when they see things doing well (usually that means too late) and they get no where near the market rate of return (reference the annual QUIB study by Dalbar). Long story short, invest like you garden. Recognize what you can and cannot control. You can't make something grow. You can't make something fruit. But, you can cultivate the garden. You can set the right conditions for growth. You set up swales and hugel beds for a framework to work in just like you should set up a framework for investments (I'll say a bit more on that in a sec). You can let animals do a tremendous amount of the work for you just like you can hire an appropriate and knowledgable financial guy to help you. You can use polyculture so each plant works together for a beneficial system just like you can diversify 'traditional' investments like stocks/bonds/real estate/commodities so you can reduce volatility and increase return at the same time (reference Modern Portfolio Theory). And then you reap the benefits.
Remember, you reap what you sow! But it's always later than you sow. And usually more than you sow. To everything there is a season, but it doesn't mean you should be afraid of the season. The markets will go up and down in season. Those seasons are simply less predictable than winter and summer. Don't be afraid of winter, just plan well and wait for spring.
By the way, for credibility, I've advised on over $400 million in my career. I've seen every investing method under the sun. What I'll suggest to you is, a good advisor will keep you out of trouble, keep you disciplined, keep you out of high cost investments, be incentivized to grow your account (no commissions), and suggest you invest following the Nobel prize winning economist that developed Modern Portfolio Theory and Multi-Factor Model. If you don't know what that is, realize you don't know what you don't know and ask for help. I can say more if anyone wants but my post is already long enough
May you enjoy good harvests!

Land, skills development for me and the family, also homestead equipment, alternative energy stuff (wind, solar, biogas, biodiesel etc.). Earthworks to supply water (dams, ponds). Food forest.
Surrounding myself with like-minded individuals and families. Perhaps establishing "permavillage" on a piece of land large enough to be fully self sufficient.

Interesting post, interesting input. Sean, I was struck by your very permie-oriented investment advice. I have a question: my financial advisor is a good man. He's trying to find me an ethical deal, but really struggling with it. Our pension fund (our only stock markety investment) is in all manner of stuff that I don't like: oil, pharma, a supermarket chain with known ethical issues... and that's probably the ethical fund. I don't know anything about the market by way of investing really - but have a definite sense that the companies that are using my money are NOT the ones that are going to be building the world I want to see. Do you have any advice?

As for me, I invested in an 8 acre field and put most of it down to trees. If cash, stocks, pensions etc. bottom out, then it will still be there growing firewood or lumber, and will hold its resale value relative to other property in the area.

If I had unlimited financial resources? I'd invest in people and in practical projects all around the world. (and a house near the sea just for sanity space for myself )

Bill Mollison has a really fantastic speech on this subject called "Funding the Revolution". Which can be found here: http://permacultureideas.blogspot.com/2010/07/free-audiobook-bill-mollisons-funding.html?m=1

He offers some great ideas for building systems to make money without compromising on the ethics of Permaculture.

With that said there are things I would buy, like land, but as far as strictly investing in I would focus on companies, products, and ideas that seem too far out to be plausible right now. The biggest realization I've had through the years of studying Permaculture is that there is a lack of design and forethought in almost everything. I'd invest in things that are trying to design solutions to problems we haven't run into yet.

As an example: Our civilization is going to run out of fossil fuels and as of right now the majority of alternatives to fossil fuels rely on fossil fuels for production. We can use the remaining fossil fuels to establish renewable infrastructure, but then what? I'd be willing to give money to anyone(assuming I had it) who was trying to solve the problem of producing future energy infrastructure without the use of fossil fuels.

Gilbert Fritz wrote:I'm wondering what you would invest in if you had a chunk of money that you wanted to avoid being swallowed up in an economic downturn or used in an unethical manner. I don't mean, what to buy for the zombie apocalypse. I mean, what to invest in that will hold its value during the second great depression.

I'm interested in both physical objects or assets and in more traditional "investments;" ways to generate continuing income from an investment, and things to buy that will be more valuable in ten years time, come what may.

There is an old saying -- "The quickest way to double your money is to fold it in half and stick right back in your pocket". True then, true now. The markets around the planet are plunging. (date: 1/21/16) If I were going to make an investment it would be in my homestead --

* Don't have livestock? Get some. Chickens, pigs my first choices. They can assist in closing the recycle loop. And pigs trained right can properly bribed to replace a rototiller.
* Is there an top level expense on the homestead? Find a way to use capital to reduce the expense. Electric is generally a top item. Consider solar if it makes sense.
* If you can justify a machinery upgrade do it. As of this year Congress has made the Chapter 179 expense deduction permanent.
* Last, invest in you. If there is a critical skill you have wanted to pick up, do it. Take a welding course, vet care, etc.

Just my observations.

Alder Burns wrote:The problem with the above posts is that these investments are illiquid....they can't easily be converted into exchangeable value or cash, and they can't easily generate income. Land values go up and down, and the only way to generate income from land is to work it yourself, or to have tenants, which brings it's own potential for drama. I guess that after 20 plus years of getting ready for the world to end and it not happening just yet has changed my attitude. I want income-generating investments that are stable and more or less liquid. Few stocks and "funds" fit this well, especially when you add in the qualification of "morality" of any sort (i.e. no arms manufacturers, no tobacco, no GMO's, etc.) Creative, cutting edge, and arguably beneficial companies (such as those that make solar panels and wind turbines, for instance) tend to be just as volatile, or moreso, than the general economy. Recently I've discovered a couple of venues, Mosaic (which focuses on solar panel installations) and Lending Club (which does direct credit loans, cutting out most bank profits) which seem to offer yields much better than bank accounts or CD's, but without the stomach churning up and down of stocks.

It maybe illiquid but I will offer two scenarios --

* Taxes ALWAYS go up year to year in my experience. So paying future taxes at this years rates could make sense. Especially if one is privy to the school board going on a construction spree.
* You purchase a piece of property in its current state. Presuming that much will have to be improved and you do so you avoid the future assessment valuation.

Beware of considering land to sell as an investment. Whether or not it will sell may be dependent on factors which you might not be able to influence. Many people think of land as an investment which they can sell to fund their retirement. I see properties in my area sit on the market for half a decade or longer.

Great ideas here, researching! I want to point out that Inc. Magazine has online article this month with best investments of 2016, and while most would be considered high-tech and risky for those who don't know, the low-tech one is surprising! Create or expand a chain/franchise that sells sustainable (permaculture?) building supplies! I would say many here are ahead of the curve with that one!

I did some research into setting up a commercial scale solar site. I'm trying to find out if establishing a 200 kW site makes economic sense. On the surface, it seems like it would, but it needs more research. Here's what I've found so far:

http://sustainability.stackexchange.com/questions/5204/establishing-a-small-commercial-solar-plant

Trees. Land and trees. Giant agroforestry/silvopasture operation with diverse yields including nuts and fruits and berries and greens and timber. And a place to live and designated areas for a future potential community to grow, paying me a small rent. I would make money off of the land development through their payment to use it.

Index funds.

Interesting question.

If we are talking about typical portfolio investments then I would break the portfolio into two categories:

1)  Growth--the economy is on an upswing

2)  Defense--a recession.


GROWTH

For Growth funds I agree with Lew that index funds are a generally safe way to enter the stock market without exposing oneself to high volatility.  

Real estate (could be land, farmland, or just about any type of land) is historically one of if not the best investments available.  There are REIT's or Real Estate Investment Trusts in which one buy's land in little chunks through something like a mutual fund.  These have performed well over the last decade.  However, if one is squeamish about feeding into an industry that offers money to transform wilderness or farmland into strip malls or high density housing, then this might not be the investment for you.  

Finally one could simply by a parcel of land with the hope of selling or renting it.  This would require some serious homework.

DEFENSE

For Defense, I can think of two very good options.  The first are savings bonds.  Their growth is not stellar, but in times of recession, any investment that at least holds its value and actually pays interest is a definite plus.

The second defensive option is gold or other precious metals.  As a rule, when economies go bad, people tend to rush towards gold and silver as they have held value for millennia.  Actually, assuming that gold holds its value and the economy decreases, the gold actually increases in relative value--that is the same amount of gold will buy more stuff.


Just for the record, these points are just a couple of ideas worth considering.  Use them for what you will.  If you find value in them, good.  But do your own homework anyways and don't just rely on these extremely generalized statements.  If these are not your style, I completely understand.  I did deliberately stay away from zombie apocalypse scenarios and I tried as much as possible to stay within liquid funds--investments where one can pretty much get money out any time it is needed.  Actual parcels of land are different, but they are still a good investment and fit well into the Permies ethic.



I hope this helps,

Eric