An Environmentally and Socially Conscious Path to FI with Laura Oldanie of Triple Bottom Line FI
I don't want to protect the environment. I want to create a world where the environment doesn't need protecting.
This post is part of Socially Conscious Women on FI/RE. The goal of the series is to showcase women who are creating and living alternative lifestyles that keep people, planet and profit in mind. Today’s post is from Laura Oldanie of Triple Bottom Line FI. I found Laura through the Facebook group Socially Conscious Mustachians. I’m so grateful for this very insightful post with lots of resources about alternative investments.
This post contains affiliate links. See Disclosures for details.
An Environmentally and Socially Conscious Path to FI
Back in June I launched a financial independence blog, not because I wanted to, but because I needed a way to crowdsource the information I haven't been able to find anywhere else on the internet. What is it that I couldn't find on the vast internet, where all the answers to so many of our questions are just a Google search away? Well, no search engine was able to lead me to any websites discussing how people can achieve FI while pursuing a triple bottom line, which equally values people, planet, and profit (3p). I think it can be done, but it's not as straight forward as setting up monthly automatic deposits into low-cost broad based index funds or investing in rental properties and later living off the 4% withdrawal rule, which seems to be the mainstream approach to FI currently.
I certainly understand the appeal of these simpler approaches and am delighted that these options have made financial independence accessible to so many people. For me however, I am not comfortable with the idea of earning money from the stocks of companies which follow business practices or sell products that aren't in line with my values and I don't want to manage a rental property. I would like to encourage a regenerative vs. extractive economy, which means I prefer my money “serve humanity while simultaneously stewarding the integrity of earth’s ecosystems” in the words of the Capital Institute.
Applying this 3P lifestyle lens to one's financial activities and decisions can require significant thought and effort. It's a less common and less well-documented and potentially slower (and more fulfilling) path to FI. In my case, I am single, childless, in my late forties, and carry no debt. My house is paid for and I earn regular rental income by having a roommate. I’ve put away some money in my retirement accounts as well as a small emergency fund. Today, I find myself somewhere between agency (according to J.D. Roth’s six stages of financial freedom) and lean or entrepreneurial FI, with a strong emphasis on frugality and the triple bottom line.
My Introduction to Financial Independence
I think my introduction to the financial independence lifestyle (even though I didn't know to call it that back then) came through the international adventures I sought out in my twenties, which included studying abroad in college, backpacking around Europe after graduation, and then joining the Peace Corps. During those overseas excursions, I met others my age who were living life in a way I'd never considered before. They were working their way around the world – picking grapes in France, assisting in hostels, serving as au-pairs – along the way. They'd work for a while in one place to fund their travels to another place enabling them to spend six to 12 months or even longer on the road.
Permaculture and Financial Independence
It was these same experiences in Europe as well as time spent working in marginalized communities in the U.S. and in developing countries that fed my environmental and social consciousness. Another significant influence in my life was my introduction in about 2010 to permaculture, a design approach that involves observing nature and then designing systems in such a way that nature does much of the work for you. Permaculture is most often applied to gardening and agriculture, but can also be a useful tool when working with things like the built environment, our interpersonal relationships, and even our finances.
Permaculture concepts can be helpful to those of us pursuing FIRE as well. A couple of FIRE bloggers have pondered the synergies between permaculture and financial independence. Probably, the most thoughtful and illustrative analysis was penned by Jakob Lund Fisk over at Early Retirement Extreme. In a blog post titled What Permaculture and ERE Have in Common he matches some of the core permaculture principles with an equivalent FIRE principle, such as noting how the permaculture principle to always obtain a yield is so often NOT achieved by middle class Americans who spend more than they earn winding up with credit card debt or other forms of a negative yield.
There's even something known as “Financial Permaculture,” which “takes a whole ecosystem approach to economics. (It) strives towards total economic return - where the entire system and its parts are optimized.” employing “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.” according to the Financial Permaculture Institute.
I try to incorporate the concepts of permaculture into as many areas of my life as possible and that includes my FIRE journey. One of the primary ways I do this is by capturing waste through dumpster diving. A large portion of my food is sourced from the dumpster of a local natural grocery store as well as Aldi. I regularly score large boxes of organic produce, jars of coconut oil that have leaked, dented cans of organic tomatoes and beans, and so many other high quality food products. I turn wilted dumpster greens into fresh eggs by gifting them to friends with chickens, who gift me free eggs in return. Other old produce gets turned into compost. Currently, my second largest income stream comes from selling still usable items I rescue from the trash on eBay, Etsy, and Craigslist. For sustainably-minded people on the path to FI capturing (and ultimately eliminating) waste, which is really just a mis-directed, underutilized resource, seems obvious to me.
Although the media inundates us with articles highlighting lack and scarcity, learning to recognize the value of so many items I formerly disregarded – in the trash, in my own house, and pretty much anywhere I look -- has helped open my eyes to the abundance that truly surrounds us. There are a number of forms of capital available to us beyond financial capital, including social capital and living capital. Tapping these forms of capital can help us see how truly wealthy we already are and make our lives so much richer and fulfilling.
Regenerative Side Hustles
I’m in the process of establishing multiple streams of passively and actively generated income beyond my dumpster treasure sales to cover my monthly expenses and add to the solid financial foundation I’ve already established. Here too I am trying to apply the permactulture lens. I have a backyard plant nursery from which I sell plants potted in compost consisting of decomposed dumpster produce in pots I retrieved from dumpsters and drilled holes in to put the plants I rescued from dumpsters or grew myself. While this is probably my most enjoyable side-hustle, for the time being it's also the least profitable. I think this could change if I put more time into it, but this blog and other activities frequently pull me in other directions.
I'm pondering a range of additional side-hustle options. I'm intrigued by printables and other digital downloads that are not only environmentally friendly, but also produce a more passive source of income once they've been created, uploaded, and marketed. I am committed to finding side-hustles that are regenerative or at the very least get pretty close to a closed loop system in which no waste is created. That means I won't be selling dropshipped t-shirts, coffee mugs, or plastic widgets with trendy logos through Amazon or other sites because thrift store dumpsters in this country are overflowing with these items. Thrift stores receive so many of these unwanted items that they don't even have space on their shelves to stock them. I do not want sell a product with such a short life cycle that isn't truly needed since people already have so many of these items.
Socially Conscious Investing
As alluded to at the beginning of this article, I'm even trying to apply permactulture principles to my investment portfolio eschewing mainstream index funds and rental properties. Probably the most obvious and accessible alternative to mainstream index funds is investing in socially responsible (SRI) index funds. A number of the more sustainably-minded people on the path to FI may already be invested in this type of fund. In a recent blog post, Kristine at Frugasaurus described an ethical index fund that had been launched in Norway where she lives. This Norwegian version of what we refer to in the U.S. as socially responsible investing (SRI) offers an index fund that like the many SRI funds available in the U.S. excludes companies that deal in fossil fuels, firearms, and tobacco. It also screens for environmental practices, workers rights, and some other things.
A significant portion of my own personal retirement account money was stashed in TIAA's Social Choice Equity Fund for many years (and a small portion of it still is). However, as I outlined in a recent blog post, much like the Vanguard FTSE Social Index Fund Investor Shares (VFTSX) and many other SRI funds the TIAA option includes companies such as Microsoft, Johnson & Johnson, and Coca-Cola. I find this list of companies extremely disappointing. These companies push consumerism, unhealthy products, and extractive practices or offer services that I don't want to encourage. While there is debate about whether or not the returns on SRI investments can match those of more mainstream index fund offerings, they do at least offer a viable alternative as we explore, refine, create, and popularize more holistically and sustainably-oriented options.
I've taken the dramatic step of transferring the majority of my retirement funds into a self-directed IRA (SDIRA). This is a little known option that is different than a SEP IRA and solo 401k, which allows the account holder to make a wide range of alternative investments using the tax-deferred funds in their IRA. Most people who open SDIRAs invest in real estate, and while I might eventually invest some of my SDIRA funds into a local affordable housing project or two I'm most interested in investing in sustainability-focused businesses, personal lending, regenerative agriculture, Slow Money, and a variety of other far less traditional options. I have a lot to learn about the investment options available to me as well as the nuances of investing through a SDIRA so I have been slow to get the money I’ve moved into this account invested. For the time being the brunt of this SDIRA money remains in a local credit union checking account waiting to be invested.
The largest portion of the monies I have invested so far from my SDIRA has gone to purchase a share of a permaculture farm about 60 miles from my home. I am very excited about this investment because it feels so aligned with what I truly value. The couple running this 10 acre farm are doing everything possible to reduce the property's reliance on outside power and water sources, planting a food forest and orchard, teaching classes, restoring the health of the soil, and oh so much more.
The next largest transfer of funds from my SDIRA account went to Streetshares, a U.S. based online platform which provides specialty finance products focused on the veterans market, including loans to veterans operating small businesses. Making this investment provides a small drop of relief in the bucket that is my frustration with how much of this country’s budget goes to the Department of Defense and how little of it goes to the Department of Veterans Affairs to support those who served our country often under such trying circumstances. I do wonder how many veterans receiving loans from Streetshares are running defense contracting businesses, which would NOT be in alignment with my values, but my sense is that for the most part these veterans tend to gravitate to other industries.
I have also invested in four sustainably-minded or community-focused businesses through Wefunder, an online crowdsourcing platform for start-ups. It feels so good to use my money to fund 1) the revitalization of a historic Chicago neighborhood into a Black food & culture hot spot 2) buffalo based meat and fruit bars based on the Wasna tradition of the Lakota 3) an app to connect farm workers with good farm work opportunities 4) market intelligence and trading tools for recycling industry professionals.
Voting With My Dollar
I want to be clear that I am still in the early stages of the learning process regarding these investment options and I am not a certified financial planner – far from it. I’m simply someone who so desperately wants to keep her money out of mainstream stocks and other extractive investment vehicles that I’m willing to put the time and energy into exploring some alternatives. Nothing in this article should be considered as financial advice. There are RISKS associated with all of these investments, and it is VERY important to acknowledge this. There is also some risk associated with investing in the stock market.
We live in an eco-system here on planet earth and it is an inter-connected web. Far-reaching ripple effects we are mostly unaware of result from our actions. Many negative externalities stem from the actions of most of the companies represented on the NYSE and NASDAQ, including pollution, the clear cutting of large swaths of forests, and poor health resulting from the consumption of junk food. I consider how I spend and invest each and every dollar as the most powerful vote I can ever cast so I do it very mindfully thinking about the long-term and down stream effects of my spending and investments.
I am excited to continue exploring socially and environmentally conscious ways to live, spend, and invest while pursuing FIRE and connecting with others along the way who want to be more intentional in ensuring their money supports a triple bottom line. Let the sharing and learning begin…
Where to Find Laura
Find Laura over at her blog Triple Bottom Line FI.
Read more about her investing strategy over at Your Money or Your Life.
Check out her interview: Sustainability and FI Through Dumpster Diving with FIRE Drill Podcast.