I was intending on writing this article after I finished the series on my weekend ritual, but I felt it might be more appropriate to write it now considering this last week. I live in Southwestern Ontario Canada. It is a winter climate with snow and cold temperatures ranging from November to March usually.
Courtesy of Claudio Mazzetti
Over last two years, the region has had significant flooding issues because of unusually large temperature swings and greater than usual precipitation. This means large amounts of snow, rain, melt water raising rivers and creating localized flooding that damaged people’s homes, businesses and infrastructure.
This is minor though compared to the historic flooding the Midwest is facing. Currently in Nebraska 74 cities, 65 counties and 4 tribal areas have declared a state of emergency. Again, the same issue is driving it – unusually large temperature swings and precipitation.
Courtesy Shelby L. Bell
This relates back to your biggest investment.
What you say? You have no investments – no real estate or stocks or Swiss gold (or sketchy crypto)?
You indeed are an investor and are “full in” on one key market – the earth in its current form. This is your biggest investment.
Don’t confuse this statement with some holier-than-thou sermon about doing some kind of generalized “right thing”. This is about looking after your personal interest, financial, health and otherwise.
Courtesy of Matt
We depend daily on the “dividends” or payments from the earth – and its dividends are often unique and essential compared to the traditional markets.
Want to earn money? There are numerous markets such as the real estate market, stocks, bonds and other assets, currencies, etc. They can all provide you with cash.
But how many markets can provide clean air (at a long term sustainable rate and a very low cost)? Potable water? A stable climate that minimizes flooding? A system that maintains the fertilization of plants?
Only one – the earth in its current state.
That’s why you should think of this planet and its current status as your precious nest-egg – more precious than your house, your life-savings or your pension. And you should treat it with the seriousness of handling an investment.
And like any investment, it needs to be properly managed or it can quickly go bust. For example, if we don’t properly manage our greenhouse emissions, we lose our “climate” dividends – stable temperatures and rain – that means many negative impactives including people’s property and resources disappearing.
Arian Zwegers
This investment (Earth) is so essential that you can’t bail on it like a standard investment. You can usually exit other markets and, at worst, lose lots of money or go into debt/bankruptcy. You can’t go without water, arable soil and livable temperatures.
Another complicated aspect of this investment is that you must collectively manage this investment with every other human on this planet which means you are impacted by their decisions. Again, you can’t just bail on this investment just because a bunch of people are making poor decisions like some traders who decided to short the housing market in 2008 when they noticed large-scale risk mismanagement.
So how can you manage this crucial investment?
On one side, you can do your bit by increasing the sustainability of your lifestyle and advocating for others to do so. I enthusiastically encourage this.
On the (overlooked) flip side, you can intentionally control how you invest in the earth, the amount of risk you expose yourself to it and how you manage that risk.
Courtesy ofU.S. Department of Agriculture
The current floods in Nebraska serve as a poignant, if rather sad, example of this. The swings in temperature and extreme precipitation are putting the farmers in financial peril, even bankruptcy. The management of the earth dividends matters just as much (or more) to the farmers than the current price listed on the commodity market.
Again, if you think “I’m fine, I’m not a farmer” then think about water. In some places in the world (including mine) water is abundant and we take this dividend for granted.
We may become more aware of its value soon – a recent article noted that a local government water fees have more than doubled from 2006 to 2018. Furthermore, it is projected to go up another 48% in the next ten years – double the rate of inflation – around $1310 for a housing using 204 m3 of water a year. And this may not even account for future costs related to a warming climate.
This is a serious amount of money so it’s important to understand water trends in your community so you can evaluate the risk and plan alternatives as necessary (e.g. moving to a different community, investing in water efficient equipment, conserving water, etc.).
To summarize, managing you personal environment risk should go hand-in-hand with conventional personal financial management. You should be concerned about your bank fees, savings and retirement plan, but equally concerned that community has an adequate sustainable water supply in the future an actionable plan to adapt to a changing environment and resources.