grundomatic's journal

[grundomatic]

Exactly. It abstracts away the extent to which you have to be at least a bit of a competitive asshole to survive in a Capitalist economy. Just like living in a highly developed nation-state with high-tech military abstracts away your need to show up for monthly meetings of your local militia.

Therefore, I think it's almost certainly "better" to either invest in local businesses OR fully acknowledge the extent to which you are likely benefiting from the arbitrary laws (positive feedback loops that help the big get bigger) that currently support the monopolistic market dominance of mega-corporations. IOW, economy of scale for production is a highly dubious justification these days when most actual work is sub-sub-sub-contracted out and the rust-belt is going on 40 years vacated. It's pretty much all about power, organization, lawyers, ass-holery and the mythology that the finance sector is simply the servant of the economy as a whole.

It's much riskier to go out there on your own, but clipping dividend coupons used to be known as an activity only fit for old widow ladies.

ETA: I'm mostly talking to myself here, not you guys. Carry on.

I think about things like “what do I owe to whom?” all the time. This is very broad and potentially political, so maybe we focus on our own local spending and investing, which should hopefully keep us out of trouble. I am also interested in rust-belt dynamics as well, so whatever you want to say about that.

Skipping how we ended up there, years ago DW and I went on a “spend local” kick. I bought only local beer, and we (mostly) only ate out at local restaurants. We went to the farmer’s market some, tried to shop at the in-state grocery store, and bought a laptop at the local computer store. What I’ve been trying to sort out for a while is resolving this desire to support local businesses with the low-spending ethics of ERE.

Sometimes the (many admittedly non-ERE) decisions are quality ones and are easier. We’d rather see the movies that are playing at the local art-house cinema than at the megaplex, and the food at the local restaurants is way better than at the chain places. Prices are similar.

Other times, though, the difference in what I’m getting is not obvious. I can pay $2 more for spray paint at the locally owned Ace Hardware, but in the end it’s the same as the can bought at Home Depot. That’s only a couple bucks, but the laptop was quite a bit more than the base model available at Best Buy. Multiplied across all purchases, however, this adds up to 1) more money needed for FI, due to both sides of the equation, and 2) more money flying around in the economy available for others to also do destructive things, like buying and using spray paint.

Anymore, I fall more to the spend-less side of things. I shop for the cheapest groceries. I very rarely go to the movies. However, I’d love to hear the arguments for spending more to buy local from someone familiar with ERE, since I figured the unspoken assumption in the “buy local” movement is that more money flying around in the [local] economy is good.

Moving to the investing side, I also looked into investing locally when we were on the “buy local” kick. Well, I read one book, Local Dollars, Local Sense. While most of the specifics escape me now, what I recall was thinking that most of the things in the book required a lot of hoop jumping and offered a very reduced return compared to standard options.

I suppose I could invest very directly and locally by buying a local business, and those tend to be cheaper (but riskier) than stocks. I can buy YUM at a price/cash flow of about 23, with Seeking Alpha telling me the sector median is about 9. Looking at local listings, the price/cash flow of local restaurants for sale by me seem to be between 1.5 and 5. What isn’t immediately clear with the listings is how involved the owner is, in other words would I just be buying a job.

Some years ago Arizona passed a law allowing individuals to invest up to $10,000 in an Arizona business without being an accredited investor. I think the first company to try to take advantage of the new crowdfunding law was a local brewery. I went to their investor’s meeting, and decided to pass on the opportunity because I wasn’t convinced of their value proposition. They closed up shop earlier this year.

I’d love to hear suggestions on how to invest locally without it being something of a charity case-–taking paltry returns and/or high risk because “local”. The only thing that has made sense for us was banking at a local credit union.

[AnalyticalEngine]

However, I’d love to hear the arguments for spending more to buy local from someone familiar with ERE, since I figured the unspoken assumption in the “buy local” movement is that more money flying around in the [local] economy is good.

I've thought about that same question too, especially since the label "local" can sometimes be a bit scammy. If what I'm buying required 100 products from outside of the state that were just shipped here and assembled here, how local is it really?

Now I tend to view buying local more as cultivating a relationship than any kind of "vote with your dollar" arrangement, although it could be that too. That is, if I always buy bread at Walmart, I might be missing out on a relationship with the local baker. But Walmart vs Costco vs slightly more regional chain might not matter at all if I'm never cultivating a relationship with anyone who works at those stores.

[Slevin]

Edited: Nevermind, this argument for shopping local didn’t hold up to data when I looked further into it.

[7Wannabe5]

I think the best reason to invest in your own business(es) or think like a locavore is that it is much more fun than the alternative. Running your own tiny business vs. even actively managing your stock portfolio is like actually playing football vs. participating in fantasy football.

Also, it doesn't make sense to transcend comparative advantage towards resilience at the line of independent frugality, but not within your own community. It can be about cultivating personal relationships, but it can also be about gaining knowledge about the flows and stocks of your local economy, just like you can't rationally create a permaculture project without learning about the natural and agricultural flows and stocks that already exist in the community. For instance, you can learn a lot just by searching in a mapping app for the closest dairy farm, machine shop, seamstress, or grain elevator to your location. Ride your bike over to the nearest mixed industrial complex and investigate what's actually going on there. Ask the guy at your locally owned hardware store about his spray paint supplier. Is his spray paint supply line the same as at your local Wal-Mart? Where does your local brewer get her hops? Maybe you could become her hops supplier? Ka-ching, now you maybe found a cash yield for your permaculture project! Your perspective will change and you'll see that there are all sorts of ways you can insert yourself in the flows or collaborate with others.

Anyways, as I indicated elsewhere, this is mostly just me talking to me now that I am in remission (fingers crossed for permancy) from being so sick with Crohn's disease that I had to confine myself to "brain in a box" activities. As in, why the fuck am I in online grad school studying IT rather than starting another small business and permaculture project in addition to tutoring the disadvantaged tots part-time!?!? I'm just not that security oriented unless I am literally curled up in pain and exhaustion for more than half the day. Obviously, I am overdue for update on my own journal thread

[daylen]

Instead of either investing in the local or the non-local, couldn't you think about it as investing in a nesting of localities? Like there is no obvious boundary between what is local and what isn't. Cities, bioregions, and continental masses are open system with plenty of flux. Over-vesting in a smallish local region like a town may actually negatively impact the quality of life of locals in that town in the medium-long run by skewing planetary resources away from a global optimum of production that can satisfy various local constraints. For instance, a town may go "green" solar energy to try to decouple from oil disruptions despite being in a very sub-optimal climate for solar and inadvertently accelerate oil usage globally to the point of bringing about continental warfare and loss of local life.

Though, it seems that if there is a good project on the other side of the continent or globe that will alleviate tensions in your neighborhood then it may not be so bad of an investment from your perspective. It may just be weighted less heavily than tighter localities in the nest you have drawn.

[sky]

When it comes to investment, I become a pure capitalist, and invest on the basis of income and security.

This may or may not be in line with social or technological goals. However my outlook is such that I trust sectors with long term growth and avoid sectors that are at the end of their active economic life.

[Western Red Cedar]

Anymore, I fall more to the spend-less side of things. I shop for the cheapest groceries. I very rarely go to the movies. However, I’d love to hear the arguments for spending more to buy local from someone familiar with ERE, since I figured the unspoken assumption in the “buy local” movement is that more money flying around in the [local] economy is good.

-------------

I’d love to hear suggestions on how to invest locally without it being something of a charity case-–taking paltry returns and/or high risk because “local”. The only thing that has made sense for us was banking at a local credit union.

From a community and economic development perspective, the major rationale for spending money locally is based on the multiplier effect of local dollars in the local economy. The argument is that if I spend money at a local business, that business is more likely to hire a local accountant, who employs a local handyman or cleaning crew - and on it goes. Main Street America has argued that in a well-designed community, the multiplier effect of a dollar can reverberate up to 7x throughout the community. Whereas, if I bought that same product at the big box store, many of those secondary services like accountants or banking are based somewhere else, so the dollar leaves the community immediately.

https://www.mainstreet.org/ourwork/theapproach

Some communities have taken this approach even farther by creating and printing their own currency:

https://www.youtube.com/watch?v=nVr8OrD9cDs

In terms of limiting the amount of money spreading for moral or climate change reasons, I suppose I'd ask what kind of communities we'd like to live in? I've seen many communities who have lost their local grocery or hardware store once Walmart moved in, or the local restaurant once a Subway or McDonalds moved in. Does it make more sense to buy cheap lentils shipped over from Asia vs. local produce or grass fed beef from a farmer actively regenerating the soil outside of town? If you aren't spending that money, but keeping it invested or keeping it in a bank are you sure you are even limiting the use of those dollars in the economy?*

Considering the level of intelligence on these forums, I've always thought members could make a much bigger impact on climate change or environmental issues by doing something proactive in their careers or local community than by trying to figure out how to drop spending from 15k to 10k. Of course, it isn't necessarily an either/or dynamic.

In regards to local investments, I've always thought real estate is a great fit with ERE. It is local, an alternative to the stock market, has a visible effect on the immediate environment, can have pretty solid returns, and allows one to develop or implement a variety of skills.

*These aren't necessarily questions for you @grundomatic, but just some ideas I've had based on the JAFI discussion and my own decision to focus a little less on expenses.

[jacob]

Considering the level of intelligence on these forums, I've always thought members could make a much bigger impact on climate change or environmental issues by doing something proactive in their careers or local community than by trying to figure out how to drop spending from 15k to 10k. Of course, it isn't necessarily an either/or dynamic.

There's also a multiplier effect when it comes to spending less. Define it as N^k. If one keeps one's lower spending a secret, then N is 1. k is a parameter that measures how far the rings spread. If you talk to 10 people and they in turn talk to 10 others and then stop, you affect 100 people. Here k=2. This presumes no overlap. k captures it all. In reality, it's probably close to 1.1 or so.

Insofar your influence is such that N or k is even slightly above 1, it begins to add up really fast.

If the inspiration is to save $1000/year and N=10 and k=1.5 (numbers for closest family), then the impact is $31,000 per year.

If you inspire 100 forumites to spend $5000/year less and they in turn have a slight effect on their relations, lets have k=1.2, then the impact is $1,075,000 per year.

If you inspire 10,000 to spend $20,000/year less and 10 of them start a blog, lets say k=1.3, then the impact is about $3.2B/year.

Key point is that one's example doesn't just affect one's own spending unless you keeps it very secretive.

It would be interesting to have real numbers. What I can tell you is that in Denmark where the FIRE movement has grown by leaps and bounds since 2017, various politicians and economists are sufficiently concerned about the impact on GDP and pension plans to make it a regular news.

[grundomatic]

I think the best reason to invest in your own business(es) or think like a locavore is that it is much more fun than the alternative. Running your own tiny business vs. even actively managing your stock portfolio is like actually playing football vs. participating in fantasy football.

Fun? Now that I can get behind. I guess it's worth seeing whether or not it's fun for me. In the past, side hustles have quickly become unfun. That might change if I apply a different mindset and can keep the pressure on myself low.

Also, it doesn't make sense to transcend comparative advantage towards resilience at the line of independent frugality, but not within your own community. It can be about cultivating personal relationships, but it can also be about gaining knowledge about the flows and stocks of your local economy, just like you can't rationally create a permaculture project without learning about the natural and agricultural flows and stocks that already exist in the community. For instance, you can learn a lot just by searching in a mapping app for the closest dairy farm, machine shop, seamstress, or grain elevator to your location. Ride your bike over to the nearest mixed industrial complex and investigate what's actually going on there. Ask the guy at your locally owned hardware store about his spray paint supplier. Is his spray paint supply line the same as at your local Wal-Mart? Where does your local brewer get her hops? Maybe you could become her hops supplier? Ka-ching, now you maybe found a cash yield for your permaculture project! Your perspective will change and you'll see that there are all sorts of ways you can insert yourself in the flows or collaborate with others.

I think I get what you are saying? If I'm already giving up work/buy at the household level, then it should follow that I do the same on the community level? Be a producer or decomposer not just for my household but for the local community at large?

Both of these things kind of remind me of the part of the ERE book (don't have it to reference exact section) where 8 frugal things to do are listed, but then it's said not to do these things to save money, but rather to make connections, learn skills, etc.

Come to think of it, the guy coming to fix my plumbing is a guy a met when I sold him some old toys that belonged to a coworker. Is that the sort of thing you are talking about?

Also, glad you are feeling better.

[grundomatic]

Instead of either investing in the local or the non-local, couldn't you think about it as investing in a nesting of localities? Like there is no obvious boundary between what is local and what isn't. Cities, bioregions, and continental masses are open system with plenty of flux. Over-vesting in a smallish local region like a town may actually negatively impact the quality of life of locals in that town in the medium-long run by skewing planetary resources away from a global optimum of production that can satisfy various local constraints. For instance, a town may go "green" solar energy to try to decouple from oil disruptions despite being in a very sub-optimal climate for solar and inadvertently accelerate oil usage globally to the point of bringing about continental warfare and loss of local life.

Though, it seems that if there is a good project on the other side of the continent or globe that will alleviate tensions in your neighborhood then it may not be so bad of an investment from your perspective. It may just be weighted less heavily than tighter localities in the nest you have drawn.

So local/non-local isn't even a thing in a networked world? Invest at the appropriate level for optimal yields?

[grundomatic]

@WRC

You seem to get where I'm coming from--trying to balance the local economic outcomes with the ethics from JAFI (or just J) discussions. I will note that I had a thought, and don't quite know how to express it. It's something like the "spend local" groups are seeking community resiliency and increased social capital, but they are coming at it from the only angle that most people understand--spending money. I think @7 is on to something, suggesting one can try to insert themselves into the flow of the local economy, rather than only thinking in terms of consuming from the local economy.

@jacob's post kind of captures another concern of mine from sky's journal, except I was thinking about it from the negative viewpoint. If I create a business that will actually generate sales in the current economy, it's probably going to be selling something unhealthy, unneeded, or that people should probably do for themselves, meaning that if I'm successful in my business, I'm pushing them away from the world I want to live in. This kind of circles back to the thread on monetizing an interest in frugality--maybe not so easy to do.

[Slevin]

Sounds like you need to open a repair cafe then?

[Ego]

Buying things second-hand almost always means that a real live human being is the one who reaps the meager profits they are able to wring from decomposing things that already exist. The same is true for consumables like groceries if they are purchased from the small-time liquidators who specialize in damaged packaging and half-lots.

My favorite grocery liquidator sells shelf-pulls from Sprouts and Whole Foods. During the summer when his daughters are home from college they help him stock his stall. I go out of my way to shop with them because I feel as if I am doing the right thing in so many ways when I do.

[daylen]

Locality is a thing to the extent that you believe your agency is bounded in spacetime. Like if you believe that you are a physiological body then the only yield or stock that you care about is what keeps that body going (e.g. food, water, etc.). If you extend your agency to taking care of other humans then their stocks matter too. Them lacking leads to your feeling of scarcity. This sense of care can extend to the entire planet and beyond. The dropoff of agency can be seen as a continuous function with no clear steps.

A bounded agency others what is outside that boundary and so may lead to conflict or defection in games at that level between you and other agents like you. Though, it seems to me like it is plausible to see the universe as positive sum games all the way up and down these levels. No sacrifice necessary though a moral compass is vital. In that investing in a sector that enslaves agents probably isn't the best play if you wish to someday be helped by them with their own playbooks in these positive sum games. Going with a portfolio that just predicts what stock will go up or down defaults to the morality of the market. Which is not necessarily bad or good, depends on your own compass for where you and by extension society should be going.

[jacob]

Locality is a thing to the extent that you believe your agency is bounded in spacetime.

I think a lot of the [sociocentric] "localization"/community-demographics believes exactly that. Out-of-bounds may even be considered non grata.

[guitarplayer]

My favorite grocery liquidator sells shelf-pulls from Sprouts and Whole Foods. During the summer when his daughters are home from college they help him stock his stall. I go out of my way to shop with them because I feel as if I am doing the right thing in so many ways when I do.

I would love to have such a shop around in Glasgow but unfortunately the nearest one is in Manchester which is about 5h away.

[7Wannabe5]

Over-vesting in a smallish local region like a town may actually negatively impact the quality of life of locals in that town in the medium-long run by skewing planetary resources away from a global optimum of production that can satisfy various local constraints. For instance, a town may go "green" solar energy to try to decouple from oil disruptions despite being in a very sub-optimal climate for solar and inadvertently accelerate oil usage globally to the point of bringing about continental warfare and loss of local life.

Absolutely, but the same argument could apply to "making your own soap" as an individual. Either you can go to the market and you buy brand-name assets-productive-of-cash-flow (tools/businesses) or you can make your own. The obvious arguments against making your own soap are 1) it's a hassle and 2) I can make more $$/hr flipping burgers. But we here at ERE Forum transcend "comparative advantage" arguments due to individualist values at Level 5, so why then would it not be similarly kosher to transcend "comparative advantage" towards more communitarian values at Level 8? I would note for the record that this is pretty much exactly what Vicki Robin did/does.

Locality is a thing to the extent that you believe your agency is bounded in spacetime.

Your conscious agency is bounded by your knowledge of the field, so it kind of reeks of hubris to over-extend into either time or space.

If I'm already giving up work/buy at the household level, then it should follow that I do the same on the community level? Be a producer or decomposer not just for my household but for the local community at large?

one can try to insert themselves into the flow of the local economy, rather than only thinking in terms of consuming from the local economy.

Even though for reasons related to something like "philosophy abhors a vacuum", I am sometimes compelled to argue for Green/Communitarian perspective on this forum, I am sooooooooo not about what anybody "should" do. For instance, somebody could rationally make the argument that instead of the "do no harm" level of 1 eco-Jacob being spread egalitarian over current human global population, efficient producers should be granted dumping/pumping rights proportional to income*. IOW, the general point I am trying to make is that if you are mixing aspects/laws/values/mythologies of Orange and Green at Level Yellow, there must be more than one way to do this, so why not try the mid-path?

OTOH, the very specific thought I was having was that running my own micro-business, working on a needfully-local permaculture project, living/working in co-operative settings,and helping others in a tangible (local) way are fun/fulfilling experiences for me, that I would vastly prefer over full-time corporate employment towards investing in the stock market and/or actually marrying one of my affluent/overbearing polyamory partners and/or FITB with any other conservative choice. Mileage will vary significantly.

*And, indeed, this, or much worse, is likely what will happen.

[daylen]

Your conscious agency is bounded by your knowledge of the field, so it kind of reeks of hubris to over-extend into either time or space.

And if you know the universe is the entangled limit of everything? Where do you begin or end?

[grundomatic]

Sounds like you need to open a repair cafe then?

Genius. I'll sell people coffee and charge for them to fix their own things in a space I own/rent. Like a do-it-yourself carwash stall. In all seriousness though, despite allegedly espousing the renaissance ideal, ultimately there are some things that I just don't want to do (maybe even shouldn't be allowed to do), and so I might as well be willing to sell my services to others who also have things they don't want to do. Someone has to teach the kids to read and multiply, or whatever it is they don't want to do but I wouldn't mind doing.

@ego
I definitely try to favor used over new, and even thought about your "used food". There is a distant retailer in town that does this, but this discussion made me check in with the nearby non-profit that does something similar. I gave up going after my bundle featured a case of monster and some potato chips, and since the other produce rescuer by me is shut down for the season, I figured this group would be back to only having super processed stuff available. Good thing I looked, because it looks like it's almost exclusively produce. Guess I'll be going there Saturday morning.

IOW, the general point I am trying to make is that if you are mixing aspects/laws/values/mythologies of Orange and Green at Level Yellow, there must be more than one way to do this, so why not try the mid-path?

No sacrifice necessary though a moral compass is vital. In that investing in a sector that enslaves agents probably isn't the best play if you wish to someday be helped by them with their own playbooks in these positive sum games. Going with a portfolio that just predicts what stock will go up or down defaults to the morality of the market. Which is not necessarily bad or good, depends on your own compass for where you and by extension society should be going.

I'm trying to figure out the right path for me, to build or calibrate my moral compass. I appreciate the input

[jacob]

Absolutely, but the same argument could apply to "making your own soap" as an individual. Either you can go to the market and you buy brand-name assets-productive-of-cash-flow (tools/businesses) or you can make your own. The obvious arguments against making your own soap are 1) it's a hassle and 2) I can make more $$/hr flipping burgers. But we here at ERE Forum transcend "comparative advantage" arguments due to individualist values at Level 5, so why then would it not be similarly kosher to transcend "comparative advantage" towards more communitarian values at Level 8? I would note for the record that this is pretty much exactly what Vicki Robin did/does.

I wonder whether this can be explained by enneagrams. Once liberated from societal conformity (past WL7), people may just gravitate towards their preferred self-expression or actualization as it may be. This takes different forms depending on which type. Type 5 (correlates with INT) is very much into developing competence in various skills and furthering their understanding of the world. Other types are into other things. FWIW, VR is a self-declared 7w8 (7 correlates with EP).

Rather than seeking a cultural (spiral dynamics) explanation, it may be as simple as that. The reason we see so many INT*s in the FIRE space is simply survivor bias. INT*s have both "opportunity and motive", whereas many other types lack one or both. IIRC, VR inherited her entire FI-stash.