Financial Permaculture: Making Financial Independence (FI) More Meaningful & Resilient

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By the time I was exposed to permaculture (a design science that looks to nature’s closed-loop, no waste system as the model) I had already amassed a bit of savings in my employer based retirement accounts. It wasn’t enough savings to consider myself rich, yet it was enough that I wanted to think about how to wisely steward it in more sustainable, regenerative and less extractive ways. I am not of the mindset to donate all of this money to charity (in part because, as I wrote about here, I don’t think charity is very effective in many cases). Nor am I inclined to invest it in a property to regenerate myself as I have just moved in with my boyfriend and want to support his efforts. Taking on an additional property would be beyond my current bandwidth.

This has left me looking to financial permaculture for guidance….

What is Financial Permaculture?

Many people, who are drawn to permaculture, focus on tending gardens, farms, or even larger plots of land. This is a wonderful and important thing, which I do as well. As I mentioned in the first post in this series linking permaculture and financial independence however, permaculture in its broader implementation encourages us to tend a number of different landscapes, including our inner landscape, the social landscape in which we find ourselves, the built environment, and our financial terrain. While far less attention, emphasis, and thinking has been directed to the finances and economics petal of the permaculture flower, back in about 2007 a small group of permaculture leaders came together for a brief period of years to take a deeper dive into the richness of that unexplored petal. They ended up coining the term financial permaculture, which has been defined as

a design tool that applies efficient designs to generate the least amount of waste for the highest yield, taking into account the true social and ecological costs within a local economy.”

In the Winter 2013 edition of The Transition Free Press Brett Scott author of The Heretic’s Guide to Global Finance: Hacking the Future of Money points out that our current financial system has been “a net drain on ecological systems.” I’m no economist, but I have to wonder if it’s been a net drain on humans as well. If we re-designed our financial system using permaculture principles it would look more like a natural eco-system, from which we didn’t all feel so disconnected.

Financial Permaculture Thought Leaders

As part of their collaborative efforts, in the ensuing years, that small group of financial permaculture leaders established the now defunct (although still accessible online) Financial Permaculture Institute, which sought to apply a permaculture lens to creating local economic solutions. The team behind the institute convened a number of financial permaculture summits to catalyze local and regenerative investing efforts. One of the well-known permaculture leaders involved in much of this activity was Eric Toensmeir author of The Carbon Farming Solution and Perennial Vegetables. Eric shares his thinking on financial permaculture and other resources in a comprehensive post on his website. You can listen to Eric talk about financial permaculture in this episode of The Permaculture Podcast with Scott Mann.

Another thought leader involved with the institute was Jennifer English Morgan. In this article from Medium.com she details the goals of the institute and how the team went about achieving them. Jennifer drives home the point that financial permaculture strives for total economic return and does an excellent job linking the 12 permaculture principles to the financial realm to show how we can achieve that total economic return, equally valuing people, planet and profit. Jennifer also shares this chart developed by fellow thought leader Catherine Austin Fitts, Managing Member of Solari Investment Advisory, comparing financial permaculture investment principles with the twelve guiding permaculture principles.

socially responsible investing

In addition to creating the chart, Catherine stressed that for financial permaculture to flourish the establishment of what she refers to as “financial intimacy” is essential. By that she means that we must get to know each other well enough to build “networks of trust” and be transparent in our interactions with each other.

One of the most frequently referenced concepts popularized within the realm of financial permaculture and explored previously on this blog is that of multiple forms of capital. Permaculturalists Ethan Roland Soloviev and Gregory Landua authored a well-known article in which they highlighted eight forms of capital (financial, material, living, intellectual, experiential, social, spiritual, cultural). Landua and Soloviev were not the first people to recognize forms of capital beyond financial capital, but to my knowledge they were the first to do so in a permaculture context and identify forms of currency for each of the capitals as well as how the capitals pool and flow. Others pondering this topic have included additional forms of capital as well, such as time, health, and attention capital.

How Does Financial Permaculture Make Financial Independence More Meaningful & Resilient?

As already noted, financial permaculture strives towards total economic return – where the entire system and its parts are optimized. There’s that word “optimized,” which gets mentioned so frequently in Financial Independence Retire Early (FIRE) circles. FIRE bloggers and podcasters are continually encouraging us to optimize our finances, taxes, grocery shopping, time, and so much more. I don’t disagree with this perspective. In my opinion financial permaculture with its emphasis on low waste, high yield, and true costs offers the ultimate optimization.

To my mind the multiple forms of capital referenced above constitute the fundamental financial permaculture concept we can apply at a personal level to increase our resilience and lead a richer life. Recognizing and tapping into all of these forms of capital is key to increasing our individual resilience as well as that of our families and communities. Taking inventory of all these different forms of wealth draws our attention to the abundance in our lives and helps us leave the scarcity mindset behind. The Resilient Investor Map (RIM) created by the team at Natural Investments and shared previously on this blog is an excellent tool for mapping out how rich we each are in each of the forms of capital.

It’s also worth pointing out that resilience, while not necessarily mentioned when describing either, is a concept inherent to both financial permaculture and financial independence. Many people pursuing financial independence are doing so to increase their financial resilience so they can spend their time in meaningful ways and not be beholden to a job they don’t enjoy. Ultimately, most of us want to live in and contribute to a thriving, vibrant, local community. If we aren’t practicing financial permaculture though, by investing in our local economies and learning more about the true costs of the extractive investments we make that take money out of our communities we won’t have thriving, resilient towns and places in which to spend our new found time.

Financial Permaculture In Action

Permaculture and Personal Finance:
Financial permaculture promotes the creation of an alternative to our current debt-based monetary system. Similarly, at it’s core financial independence involves avoiding debt, spending less money than you earn, and building up savings. Each of these personal finance actions increases resiliency and correlates to a permaculture principle.

permaculture, money management, personal finance

Diverse & Meaningful Income & Wealth Building:
Just as a healthy eco-system is filled with diversity so should our financial lives be. It is best if we have multiple streams of income from a variety of sources to ensure a continuous influx of funds should one of the income streams ever dwindle or be eliminated. And of course ideally this income will be generated from regenerative or sustainable practices, or at the very least “less bad,” by doing work that is meaningful and fulfilling to us. For inspiration we can look to Carol Sanford, author of The Regenerative Business and again to Ethan Roland for his Regenerative Enterprise book.

Right livelihood, a Buddhist concept that encourages us to earn money in ways that do not cause harm or compromise our ethics, is also at play in the realm of financial permaculture. One of the leading permaculture voices on regenerative right livelihood is Karryn Olson-Ramanujan of Regenepreneurs.

It is also important that we diversify our investments and the assets we hold. This is common knowledge in mainstream investing, where it typically means holding a variety of assets that include stocks, bonds, and rental properties. Financial permaculture encourages this diversity of holdings as well, but the permaculture investing portfolio consists of things like an ownership share of a regenerative farm; local lending and investing through a Slow Money chapter; crowdfunding bio-mimicry or other sustainably-minded start-ups; and investing in things like Worthy (bonds), which makes secured loans to small businesses and pays investors a 5% return. You can find more ideas on my 3pfi Investing resources page. I also shared a number of related investing ideas in my blog post on regenerative investing as well as part one and two of my series on the global warming solutions presented in the book Drawdown.

Many permaculturalists strive to achieve some level of financial freedom or what in the FIRE realm has come to be known as Coast or Barista FI. In the permaculture realm that usually involves diversifying assets and income streams by living on a plot of land with no mortgage, powering homes from renewable sources of energy; growing food to feed ourselves, and generating some kind of income from our property or skills to cover all of our expenses. Of course investing in the eight forms of capital is essential as well to achieving this desired diversity. For example, we’ve already examined the power and importance of social capital. Investing in living capital is especially common in the world of permaculture, such as planting fruit trees and other perennial food sources that will feed us and others for years to come. The material capital acquired to do things like weld, make jewelry, or keep bees can often hold its value and provide an income stream when paired with experiential capital.

Vicki Robin – Financial Permaculture in the FIRE Community:
A good example of someone well known to the FIRE community, who achieved financial independence applying financial permaculture principles is Vicki Robin, co-author of Your Money or Your Life. As she relayed in the 2018 edition of the book, she has invested in local businesses through Local Investing Opportunities Network (LION), which is based near her in Washington state. She also made socially responsible investments as a client of Natural Investments, the financial advisory firm behind the Resilient Investor Map, and invested in her own property to create rental opportunities on site and strengthen her social capital.

Vicki embodies the permaculture ethics of people care, earth care, and fair share. Another one of her key messages over the years has been for people to figure out how much money is “enough.” Vicki defines enough as “having everything you want and need to have a life you love and full self-expression with nothing in excess.”

Another of Vicki’s core teachings is that of financial interdependence, which is very much related to social capital. This involves building strong, lasting friendships and providing mutual aid to each other thus leading to greater self-reliance and a more resilient community, in which people can better help themselves and each other. The more obvious FIRE benefit of financial interdependence is saving money, but the additional benefits are pretty sweet as well and include more time with friends along with better mental health and longevity.

MMM Headquarters – Inadvertent Financial Permaculture in the FIRE Community: 
Given that financial permaculture strives to create something more along the lines of an eco-system it’s only logical that it emphasizes local economic activity such as time banks, local currencies, local lending, and cooperatively owned businesses, and local and responsible banking (credit unions, Global Association for Banking on Values member banks. or Aspiration Bank). Although Mr. Money Mustache (MMM) wasn’t thinking about it when he opened it in his hometown of Longmont, CO, his MMM Headquarters co-working space is a terrific example of a business applying a financial permaculure model. It offers affordable rates, builds community, provides meeting space for non-profit events, and promotes entrepreneurship – therefore indirectly strengthening its local economy as well.

MMM Headquarters is now operated in partnership with Carl from 1500 Days and his wife Mindy from BiggerPockets Money Podcast. It reminds me a good bit of the much heralded in permaculture circles Reconomy Centre in Totnes, England. Maybe some day they’ll follow the Reconomy Centre’s example and launch a Local Entrepreneur Forum thus encouraging local investing. MMM’s co-working space has a number of people in the FIRE community excited by the prospect of opening similar spaces around the world. It would be great to see this type of entrepreneurial endeavor become a significant income stream for those inclined to start one and further themselves along the FIRE path through such a fulfilling and worthwhile pursuit.

(An Attempt at) Financial Permaculture Zones:
In permaculture zones are used by designers to efficiently map a property dividing a property into six zones, from zero to five. Zone 0 is the central zone and all other zones are determined based on their distance from this zone. Decisions about in which zone to place an element are made based on how often we need to use that element and how often we need to service it. That way the things used most often, and the things we have to pay the most attention to, are placed closest to the central point in the design. Things used less often that don’t require as much attention are placed farther away in the design.

Permaculture Zones

Credit: Birnbaum and Fox, 2014

I’m not sure the zone criteria I outlined above directly correlate for my creation of a financial permaculture zone map, but I took a stab at one anyway. I would love for others familiar with financial permaculture to make suggestions for improving upon this.

financial permaculture zones

Winding Down Part 2 of this Permaculture FI series

Financial permaculture mimics and learns from ecosystems and is practiced through eco-social enterprises, ecosystem investing, and regenerative finance. In part 3 of this series I’ll share examples of how my boyfriend and I are implementing all of this in our own lives.

I imagine there are many more ways that financial permaculture makes financial independence more meaningful and resilient than those I covered here. Please share your thoughts in the comments section below…

DISCLAIMER: I am NOT a financial advisor. The information contained on this site is for informational purposes only. Everyone needs to conduct their own due diligence before making any investment.

4 thoughts on “Financial Permaculture: Making Financial Independence (FI) More Meaningful & Resilient”

    1. I would love to chat about this at FinCon. Hopefully, some other attendees will be interested in joining the discussion as well.

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