The multiple forms of capital have become a foundational concept in my thinking about the pursuit of financial independence and living a truly rich and resilient life. That’s why I was overjoyed when Vicki Robin, prolific social innovator, writer, speaker, and coauthor with Joe Dominguez of the life-changing book Your Money or Your Life, offered to pen a guest post demonstrating the overlap of what she has come to think of as Natural Wealth with these multiple forms of capital. It seems like the perfect way to release the free worksheets (which you’ll find at the end of this post) I created so you can take inventory of all of the Natural Wealth and other forms of capital in your own life.
In the 2018 update of Your Money or Your Life, after years of observing how real people creatively use the tools to have a “high joy to stuff ratio” life, I challenged the whole idea of “financial independence (FI).” Money is a small part of our wealth portfolio. In the new version, I distinguished between National Currency and Natural Currency. National Currency is the trading chits in the money system: dollars, financial markets, debt, etc. Natural Currency is the flow of gifts, services and mutual aid between people in communities of place or of tribe. It’s all the helping hands, all the skills, all the hot dishes, all the listening ears, all the celebrations and ceremonies, all the rituals and theater and on and on and on… in short, all the good stuff in life. In the FI program, we build both national currency capital and natural currency wealth to have a happy and free life.
Multiple Forms of Capital
In Permaculture circles, this is known as multiple forms of capital.
To explain this in simple, non technical language, I spoke about it as the ABCs of wealth, where the A, B, and C referred to this abundance of natural wealth – and little “s” referred to “stuff” as in possessions and bank accounts.
Whatever nomenclature you want to assign to it, if you prioritize these natural forms of wealth and capital during your financial accumulation phase your arrival at financial independence (FI) may come sooner, last longer and be happier by far.
Abilities, Belonging and Community are the three forms of natural wealth you build intuitively in the process of aligning how you earn, spend and save money with your purpose and fulfillment. As you take your eyes off the false prize (of more, better and different stuff) you put them on the real prizes: friends, family, sharing, caring, learning, meeting challenges, intimacy, rest, being present, connected and respected. In other words, those best things in life that are free. Like all things natural, building this wealth takes time, attention, patience and reciprocity (that volleying of giving and receiving that builds relationships).
A is for Abilities, the “do it yourself” skills that save you lots of money – and can make you money if you need it. These skills (your experiential and intellectual capital) come as you seek to economize in categories that bring you not joy – like paying a plumber $75 for a house call when for less than a dollar and watching a free 15-minute online video you could have fixed it
yourself. You begin to realize that the person who can fix the d*mn faucet is actually more financially independent than the one who pays the plumber to do it. How many times have you been stymied by a modern convenience that won’t work? When you try to get it repaired locally, you’re told to send it back to the factory. Shipping alone is more than it would cost to replace it. You’d fix it yourself, but how? Isn’t needing money to make it through life actually a form of dependence? If that is so, then asking the question “What would this expenditure look like if I had the time and skills to maintain my possessions myself?” will lead you toward less dependence on money to fill your needs.
Or perhaps discovering how much life energy goes into restaurant meals inspires you to cook from scratch. You learn to make delicious healthier meals for far less – which could lead to being a caterer, a chef in a restaurant or a personal chef with a raft of clients. Faucet washers and home cooked meals might be just the beginning. You might graduate to DIY deck building or remodeling and be endlessly and lucratively useful to other people. Photography can be a hobby, an art form, or a job – and if you love it, all of these will blend into one pleasure. Bicycle repair, house-painting, website building, social media marketing, accounting, and on and on and on all save you money and make you valuable to others. Sometimes it makes more sense to “invest in yourself” by attending a training or getting certified in such skills rather than investing in a financial instrument. Get certified as an Emergency Medical Technician and you will be a sought after volunteer, a paid professional and a better role model for your kids.
Post financial independence, you will still be part of the economy. Keep building skills and you’ll stay FI and also be able to make money again should the need arise. Having a diversity of skills and abilities is one key to resilience – the capacity to thrive no matter what happens in the financial markets. Honing your skills gives you leverage, freedom, and choice. This diversity of abilities is one form of wealth that you can build over a lifetime to challenge yourself, to do for others, to be of use in your community, to make money if needed and to meet life with courage.
Damon S. was following the traditional path of a university education, a life-long career with a single company from which he would retire in “old age”. While he valued the income, a life of wage slavery seemed unappealing, insecure, and difficult to break out of. In a flash of insight, he saw that he had no skills to meet his basic needs – food, water, shelter – without money. On a mission, he cut expenses, saved and started his own business. With the surplus time and money, he enrolled in a wilderness college, learning how to live self-sufficiently, survive with nothing in the wild, forage, and grow his own food. He invested “national wealth” in building “natural wealth” (or living capital) and sees before him a rich life with enough money for what money is good at, and of community, love and happiness.
What could you learn to do for love – and money? What have you always wanted to know or never thought you could master – could you set a goal to do it? What did you love doing as a kid that you could train in now for a side gig or a survival skill? Lifelong learning is a key to happiness. Invest in your ability to survive and thrive and help others. It will keep paying off in an alert mind and a secure place in society, long after your years of paid employment come to an end.
Who can you turn to when you need help? Who will listen to you with compassion? Who would bring you meals when you are sick? Who will celebrate your joys? Our human bonds of love and loyalty have always gotten us through the night – and life. Mobility, urbanization and careerism have sucked the time out of our lives for this love economy – but FIers are reversing that trend. Not only does this love economy make life less expensive, it makes life richer in precisely what life is truly for: giving and receiving. Maybe Uncle Harry came over to fix the faucet. Later you go to your friend Lily’s house to pay the favor forward with what Uncle Harry taught you. Then you get sick and Lily drops off some get-well-soon soup. And on it goes, in this currency of belonging.
What relationships from your past need repair – and can you repair them so that kindness can flow? It’s no accident that most spiritual paths – including the Alcoholics Anonymous and other recovery programs –
suggest an honest look at your relationships – who you’ve harmed, who you still resent, who you need to make peace with. Loneliness is epidemic – and expensive. The aforementioned examples have both natural and financial benefits—being able to distribute your chores, errands, and needs help save everyone time and money. And anyone worth their weight in salt would be happy to return the favor. Those with strong relationships will always have someone to cook dinner with, drive them to the airport, help them move across town, or introduce them to future employment opportunities. This is sometimes referred to as “social capital” or the wealth you create through your networks of mutually beneficial relationships.
While dating and mating is one way to build “belonging wealth,” cultivating enduring friendships and relationships in your local community is also key. Just as dancing is a skill, belonging is a skill you can build through listening, acts of kindness and simple rituals like a weekly call or a monthly women’s or men’s circle.
Widen the circle of relatedness and you are in the third pillar of natural wealth: Community. You build these skills too by meeting friends in local cafes, serving on nonprofit boards, running for city or county government, writing letters to the paper, singing in a choir, joining a church and on and on, the shuttle of your life on the loom of a real place on earth.
Community is a natural human currency. It is currency because it facilitates trade within communities that share and care outside the money economy. My community recently adopted a mutual aid model to help people age in place – a big savings when you consider the cost of long term care! The more trusting the community, the more resources are shared freely. Proximity plus clear communication can free up a lot of under-utilized stuff so that many people can benefit from the same item. Isolation is expensive, sharing is wealth – sometimes literally through services that will rent your car, home or RV to others, but also more deeply as in the myriad of daily exchanges that have nothing to do with financial transactions.
Community is also about choosing wisely the “location, location, location” where you plant your roots – the shops on your block, the social services you can draw on, the culture that’s yours just by going downtown, the productivity of the farms and the quiet of the forests. It’s the totality of the social and natural systems that will hold you safe, nourish your soul, inspire your service and provide you with what you need over the long haul.
Criteria for community
If you have not yet bonded with a place on earth, here are some questions you can hold in mind as you search:
Draw a 100-mile circle around your home.
Is there a diversity of crops grown within those 100 miles?
Is there a diversity of businesses—both large and small?
Does it have a diversity of energy sources – solar, wind, tidal, hydro – as well as reasonably priced traditional sources?
Is there a hospital?
Is there access to the natural world?
Are there accessible bus routes and bike trails or will you be car – and traffic – dependent?
Is there clean, safe and sustainable water supply?
Is there a strong social safety net made up of volunteer organizations and churches and local services, especially in the US where the national safety nets – Medicare, Medicaid, Social Security – are not as sturdy as in most other industrialized nations with single-payer health care systems?
How will it fare as the climate changes? Too dry, too wet, too near to the shoreline? Even if you don’t believe that climate change is human caused, it behooves you to observe that sea waters are rising and take it into account.
Is it intergenerational, where the elders help the youngers get a good life start and the youngers help the elders age with dignity and independence?
Is there night life, entertainment, festivals and plenty of ways to bring people together in celebration?
Joe Dominguez was fond of saying, “Consciousness grows faster than inflation.” In other words, you can “inflate” your skills, competencies, knowledge, close companions, and community connections faster than money. Learning to partner dance can be a hedge. Singing in a choir. Building websites. Once you are FI you’ll have more time to learn. More time to DIY. More time to bond with others. More time to find just what you need for a fraction of the cost. More time to volunteer in your community or join a church. Your travels can be cheap and leisurely rather than expensive and rushed. Unlike your working years, convenience has far less influence on your decisions.
Once you’ve reached the Crossover Point, you’ll have passive financial income while becoming more active in this love economy. Life will get richer and deeper and more interesting, whether you’re at family dinners with Rachel and Louis, volunteering with Rosalita and Manolo, learning to fish with Archie, or in a cave for 40 days meditating.
What about the “s” in those ABCs? That’s your “stuff,” your financial and material wealth. Notice it’s not capitalized—that’s because it’s only a small consideration in the love economy. Your financial independence is simply one corner of your foundation of security and freedom. Financial interdependence includes all four corners: abilities, belonging and community, along with your hard won “stuff”, constitute your total nest egg. Together, your national wealth and natural wealth will make you rich beyond measure.
If you are interested in further pondering the ABC’s of Natural Wealth (as well as questioning your assumptions about happiness, freedom, and prosperity through the lens of personal finance) consider attending EconoMe, an all day event taking place March 7, 2020 in Cincinnati, Ohio that will explore the new American dream. (This gathering is the brain child of a wonderful woman I met at Camp Mustache back in May.)
The schedule boasts an impressive line up of speakers including Jillian Johnsrud from Montana Money Adventures, Julien Saunders from Rich and Regular, as well as Lynn Frair from Nurse Numbers who will lead participants on a deeper dive into these multiple forms of capital. Lynn has generously offered up her discount code (NURSENUMBERS ), which will save you 10% off the registration fee.
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