As promised yesterday, here are a few of the simple changes I’ve made to my environment in an effort to increase my resilience and lower my exposure to risk.
The most important goals for me are to ensure that my family has a roof over their head and food on the table. These are just a couple of the areas I am working on to achieve those goals.
1. Learning to Live on Less
In general, my needs are quite simple. I have a small car, a small house and I don’t drink (well… rarely) or smoke. It might not seem like that much but smaller cars generally have much better fuel economy. Small houses are cheaper to furnish and to heat and cool.
And, addictive habits like drinking and smoking can chew through vast amounts of money for absolutely no positive return. I also don’t shop for entertainment, my wardrobe is basic and practical (working from home helps with this) and I do my best to avoid pre-packaged, convenience or takeaway food.
Money that might have gone to oil companies, utility companies, tobacco or big food companies goes to my mortgage instead. Paying down debt is vital to lowering your exposure to risk. Being debt free, or at least having minimal debts is a core objective if you’re looking to become financially resilient. The less you owe, the more freedom you have.
Even though my garden isn’t a sprawling acreage, I’m using it to reduce the impact of economic risk by lowering my expenses. Robert Kiyosaki (author of Rich Dad Poor Dad) says that your home is not an asset for the simple fact that it creates expenses not income. For the last few years, I have been working on creating an income from my property to off-set the expenses.
I have planted a wide range of fruit trees to provide a variety of fresh fruit over an extended season as well as fruit for preserving. I have a substantial kitchen garden with everything from chickens to potatoes to herbs for tea and flowers for the table.
I have also planted deciduous trees where they’ll have maximum cooling effect for my home. The income I receive is probably not income by Robert’s definition but in my view, the house is beginning to pay its way. My only regret is not thinking this way when I first planted out the garden 15 years ago!
Currently I’m self-employed. I run an online business from home, I’m a freelance writer and editor and I am in the process of building this blog into a business. I also sell plants and produce from my ‘garden gate’. I might not be ready to rival Bill Gates or Warren Buffet – yet – but I’m consciously creating multiple streams of income.
Yes, at times it can be awkward trying to keep everything organised and running smoothly. And, yes, sometimes I go a little loopy, but… there’s a strength in knowing all your eggs are not jammed into the one basket. If one stream of income falters, the others are there to pick up the slack.
All these changes have occurred over time. In isolation, they probably don’t have a huge impact but stitch them all together and they begin to provide the fabric of a resilient life. You, too, can reduce your risk and your exposure to the vagaries of the economy.
4. Take a step back and view your lifestyle as an outside observer would.
What can you do to lower your risks?
Can you downsize your car, or your house?
Can you create an additional stream of income?
Can you turn over a section of garden or balcony to produce something for your table?
They are little things but they’ll help build a flexible foundation that can adapt quickly to a changing (or challenging) economic environment. What have you got to lose?