At first glance, this may once again look like something completely, or at least remotely related to personal finance.
How does buying local improve your personal finance situation? My answer is to think of it as bartering.
As popularized in the book, Your Money or Your Life, Joe Dominguez and Vicki Robin argue that money is simply a form of your life energy. You trade your life energy for money and use money to get various things that you want or need. Presumably, if you think about your money in terms of life energy you should make better decisions with it.
No matter if you trade your product or service for money or another product or service, you are still trading one bit of life energy for another.
I could be wrong, but I believe that one day we will no longer be able to transport such a large quality of goods over such long distances the way we do now. This will force us all to become more local.
But perhaps local is the way to go anyhow?
You help a person more directly, and they help you more directly. Is there not something to be said for the satisfaction found in this. As compared to producing a product or service that the corporation you work for sells to a customer that you will never know or see?
Let me go a little deeper… To show how this kind of thinking and practice can help you more.
If we specialize to some degree we can effectively produce a product or service much easier then the average person. If something comes to us a little easier than it does to the rest of the population then there is some money to be made there. If something comes much easier than it does for the rest of the population then there is much money to be made there.
Each person is using a certain amount of life energy to create that product or service. Their ability determines the worth of their life energy.
Now if you are one of the few, or perhaps the only one in your town that is good at doing a certain thing then you will always be in demand. You will always have a job. You will always have what you need.
As we move from local to global things become quite different. Suddenly everyone can do what you can do. Not only can they do what you do, a good portion of them can do it faster, better, and cheaper then you. What happens to you? No demand. No Job. No Money. You don’t even have the money to pay for all the supposedly “cheaper” things you can buy.
Cheap is suddenly not cheap anymore because at the same time goods and services became cheaper, so did the buying power of your money. As they might say in science, “nature abhors a vacuum”, and “things tend toward equilibrium”.
We wanted to have our cake and eat it too. Meaning, we wanted to make tons of money, but also be able to buy tons of cheap things.
The moral of the story is that, at least in this regard, local is better. We help people locally and we benefit people locally. We trade our life energy for theirs in the form of goods and services. Wild extremes do not exist. No ones makes drastically more, or drastically less then the next person. They attain a mutually beneficial symbiotic relationship, instead of a parasitic one that is often found in the world.
If one labors to think deeply about how he or she both gives and uses up life energy…
…then both the individual and those around them will be better off for it.
This is our 41th challenge in The Personal Finance Challenge Series…