Independent, Fee-Only Financial Advisor

Independent, Fee-Only Financial Advisor

Saturday, February 20, 2021

Financial Resilience And Mutual Aid

We can't plan for every crisis. No matter what your financial resources are, you will find yourself in need some day. While money cannot buy you everything - the community you cultivate around yourself will always be a valuable asset.

There is a type of investor that always believes the world is ending. They may short stocks on the thesis that companies will stop making money, or are just fraudulent houses of cards. They may buy long term US Treasuries, putting their faith in the dollar and nothing else. They may eschew the dollar and our traditional financial system altogether, buying gold coins and bars just in case the apocalypse comes and nobody will take their dollars or buy their stocks.

Many years ago, one of the first investment fund salesman I met with had a streak of world ending beliefs. He painted a different picture, one that departed from a traditional investment portfolio.

“So, do you even garden?”

I explained I had been a gardener from a young age, and had just helped my mom plant blueberries and muscadines in her yard.

“Well, you probably don’t have chickens.”

Funnily enough, my roommate and I had just built a coop and bought three hens. We weren’t the only urban poulterers in the neighborhood either!

As amusing as it was for me to parry each claim of his, he had a unique way of looking at an “end of the world” scenario that has colored my thinking ever since.

He didn’t picture an asteroid wiping out half the earth or a foreign army marching down my street. He painted a picture of general decay, lack of services and a population growing more and more in need. The future he described was one where city and state services were less reliable, supply chains didn’t always link up and communities would be forced to rely more on what they could produce themselves.

In the world he described, your talents and your community are be the most valuable things you possess. As it turns out, these things are a valuable part of anyone’s financial picture. What we have seen recently is that a strong network is a community that supports you in times of crisis.

long abandoned grocery store in Chernobyl
When your world falls apart, who, not what, will you depend on?

It is valuable and important to have skills that you can rely on. The salesman gave an anecdote about darning his socks on a recent business trip, and noted that I had chickens to supply my breakfast every day. Being able to cook for yourself and perform repairs around the house not only save you significant amounts of money in the short term, but make you less reliant on others in the long term.

Many “end of the world” investors may also advocate for preparing for the end of the world: buying farmland, stocking up on canned goods, guns and tools. That is not a practical, or desirable course of action for most people. We can do something that humans have done for millennia: rely on our networks, neighbors and communities for mutual aid.

Mutual aid is simply people helping each other. People have been helping each other since time immemorial, how is mutual aid different? In a world of increased reliance on our friends and neighbors, mutual aid represents a more organized effort to allocate the resources of a network. Importantly, as the name implies, mutual aid is a two way street - you give what you can and receive what you need.

You are the first person that you must be able to rely on. Take the time to practice a new skill instead of relying on a paid service for a small repair. Keep your tools sharpened and your pantry filled for the times when you need to support yourself. When I moved into my house, I spent $800 to have someone replace a few broken window panes. The next cracked pane I noticed was fixed with $20 spent at a local hardware store and 20 minutes spent reading and watching videos.

When I was young, my mother would send me running to the neighbor’s house to borrow a cup of sugar. Being able to rely on a community for needs, small or large, is a huge financial benefit. In the moment of fixing dinner, being able to rely on a neighbor for a single ingredient saves a huge amount of time and strengthens social bonds. I have since leaned on my neighbors for housing for guests in town for a wedding or funeral, help moving, to borrow a truck, job recommendations and even the occasional piece of legal advice.

Your community will support you, but you need to cultivate relationships that you can rely on. People often turn to their churches, neighbors and professional organizations in times of need. Know who your community leaders are and who can connect you with resources when you need it. In the most recent ice storm, I have seen friends sharing important information about city services and offers for hot food. My network can connect me with resources, even if it is not my friends directly supplying them.

It is not a community unless you turn around and support it. Through the years I have also cooked for those in need, helped cut fallen limbs and lent a helping hand where needed. None of this has been a one to one relationship or an intricate system of favors. When you give freely to your community, it grows stronger. A strong community will support you when you are in need.

Supporting your community is how you strengthen it. Volunteer in organizations that you belong to - your church, your neighborhood and professional organizations all have ongoing needs that you may be able to help with. When you see or hear of a neighbor in need - support them. Deliver food for those shut in or suffering 

Looking back on difficult times, we often note that it is the people in our lives that got us through. While income, cash in the bank and insurance help, the biggest impacts come from our community.

Mutual aid can be as small and direct as borrowing a cup of sugar from your next door neighbor, to as big and indirect as helping arrange to feed strangers across your city. In every instance, it forms a valuable part of your well being.