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  • From: "Robert Waldrop" <bwaldrop@cox.net>
  • To: "permaculture" <permaculture@lists.ibiblio.org>
  • Subject: Re: [permaculture] A Question about investments
  • Date: Sun, 7 Oct 2007 21:50:56 -0500

"Everyone" with extra cash is looking for a good financial investment where the gains aren't taxable. But as far as I know, the only "tax exempt" financial investment would be in municipal or state bonds. Generally, these bonds fund capital expenditures that I doubt most permaculturists would "approve of", such as big drainage projects, highway construction, prison construction, etc. So you don't pay taxes on the income, but your money is used to move us further along the path to destruction.

If you think about this permaculturally, you can come up with some ideas.

My favorite "tax free investment" is a dwelling without a mortgage. Suppose you live in a house with a $50,000 mortgage. And then you get a windfall of $50,000. I'd say the best investment is "paying off the house". First, you are no longer paying interest so that $50,000 debt doesn't eventually cost you $150,000, so right there you have made $100,000 tax free in the form of "money you don't have to spend". Second, you no longer have a monthly mortgage payment of principle and interest, and that is worth several hundred dollars in money you no longer have to spend, so that is also like a tax free investment.

Paying off a mortgage is also counter-cultural. When you tell people you don't have a mortgage, they look at you like you are insane! "Don't you know your house is like a credit card?" Or, "You lose the tax deduction!" Somehow, spending say $600/month to get a tax deduction of $300/month, never quite made sense to me if you had the money to pay off the debt. So, since the "conventional wisdom" is to stay in debt, it seems likely to me that the permaculture approach is to "get out of debt as quickly as possible".

Another good tax free investment is investing in energy conservation. I am "earning" between 6 and 7% on the amount I spent 2 years ago to superinsulate my house, add a passive solar sunspace, and a few other bells and energy conservation whistles -- in the form of "money I no longer have to pay for energy", since I reduced my household btu usage by 50%. The higher the price for energy goes, the greater my return will be. And it is an absolutely certain return that we get irrespective of what the financial markets do.

But if you want to put money in a bank and earn interest, a credit union is your best choice. It is owned by its depositors. I don't know anything about the Permaculture Credit Union, but I like the idea. They are not, however, local to my area, and I tend to support my local economy. I don't have big piles of bucks to invest, but I use a local credit union for my monthly financial needs.

I agree with the comments that others have made to beware of sales people hawking financial investments. They work on commission, and you cannot count on them to offer you objective and unbiased advice.

You could look for "socially responsible and environmentally aware" investment possibilities, there are various mutual funds that hawk these products. But that remains a risky investment, since your principle is at risk of the vagaries of the stock market.

Those are my thoughts.

Bob Waldrop, Oklahoma City

----- Original Message ----- From: <lbsaltzman@aol.com>
To: <permaculture@lists.ibiblio.org>
Sent: Sunday, October 07, 2007 7:30 PM
Subject: Re: [permaculture] A Question about investments


Be aware that most, but not all, financial advisors are working on commission and make their money putting you into investments that they get the highest commissions from.? Caveat Emptor more than applies. And then their is the ethical component. There are a few financial advisors interested in steering people into green investments.







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