The Local Investing Resource Center presents this interview about local investing between James Frazier and Vicki Robin of Whidbey Island Local Lending (WILL) from November 2013. The following topics are discussed at the times noted:
- [0:24] Vicki’s background & experiences
- [4:54] Getting started with local investments
- [10:00] Structuring a local investment
- [11:25] Being part of a local investing group
- [14:39] Building a portfolio with local investments
- [19:52] Vicki’s current plans & projects
James Frazier: Hello, and welcome to the Local Investing Resource Center series. My name is James Frazier and today with me is Vicki Robin, author and a local investor. Thanks for joining us today, Vicki.
Vicki Robin: It is great to be with you.
Awesome. I was wondering if you could start off by telling us a little bit about your background. I know you've been on a lot of adventures, but in a few minutes, bring it to your particular interest in localism and local investing specifically.
Okay. Since the mid-1980's, I've been aware of this condition called overshoot. Basically, we’re on a trajectory of unsustainability using more resources annually than the planet can generate, all the way back to the Limits of Growth report in 1974. I've been watching this trend of overconsumption of resources for decades now, and one of the strategies that I engaged in with my co-author Joe Dominguez was we wrote a book called Your Money or Your Life to help Americans rethink how they earn, spend, save, and invest money, for the sake of their own sanity, and also for the sake of the Earth. It came out in '92. It was literally an instant bestseller, and so I spent the decade of the 90's travelling the world speaking about this very simple approach to money, which is putting money in service to your values, other than your life in service to money, and moderating your consumption to a point of “enoughness,” rather than the treadmill of “too muchness.”
Some place in there, toward the end of that decade, Joe passed away, I kept going. I became despairing at the end of the '90s to see that we hadn’t made the difference we wanted to make. Initiated a whole bunch of other interesting social innovations that I thought were maybe going to come at this from a different angle. I was diagnosed with cancer in 2004, which took me off that activist treadmill. I moved to a small town, where I still live, and did a lot of healing, and eventually learned about this other big elephant in the room which is Peak Oil. Whenever you say that oil is peaking, whatever you think about fracking, whatever you think about the Tar Sands, whatever you think about that, the fact of the matter is that we're burning through our fossil fuel resources on the planet, and that got me interested in relocalization. Because I thought communities need to prepare, and I'm interested in a bottom-up community development method for rethinking... it's sort of like Your Money or Your Life at the level of community.
I became engaged here in relocalization, which got me very aware of how insufficient, especially our food system is, which got me to do an experiment to see whether I actually could eat within the bounds of South Whidbey Island. I did a Ten Mile Diet experiment, blogged about it every day. At the end of the month, my agent sold the book to my publisher. In the last couple of years, I have been writing a book that tells the story of that month and the Ten Mile Diet, but also what I've learned about what we need to do collectively to transform our food system. Relocalization for me is a place that an individual who cares can engage and make a difference, and I like to be able to chew on something where I do feel that my actions can make a difference. That got me interested in relocalization, and from that work in the food system, I realized that there was a big gap in finance for farming.
I made a commitment to find a way to bridge that gap in some way or another. Found people who were doing programs, had developed a variety of strategies, very new field, and I came across the Local Investing Opportunities Network as one way for people with some resources that they've invested anyway... communities can invest in their local businesses. My focus now with the lending here on Whidbey Island is on agriculture.
Absolutely. So did you reach out to other investors locally to do it as a group first, or did you immediately just start looking for worthy projects to do?
I just went and did it.
Yes, you just dived in.
I just dived in. It was the Local Investing Opportunities Network, that structure gave me the courage to begin, and right away, pretty soon, I found out that a very established fourth-generation farmer wanted to put up another greenhouse to have winter vegetables and early spring greens, and so boom, I sat down with her and made the loan.
And there's the greenhouse.
At that point, I called it “speed dating for lending.” It's like match.com for lending.
Local “Shark Tank.”
No, really, she was suspicious, like “what do you want?” It was just like, “this is very simple,” and I told her, "You could pay me interest, monetary interest at this level, or you could pay me vegetables interest at this higher level." Of course, the mark-up on her vegetables is such that she actually ended up making like a bandit, and I've been taking my interest in vegetables for several years. Within two weeks, the greenhouse was up.
It was very satisfying.
And there it is, plants are growing in the winter, and you're getting interest in food. Wonderful.
I love how you can really just make reality happen, make your vision come true, within your neighborhood, and using some money that otherwise might just be sitting in some account.
Right, that's what's exciting about it. And so a group of us got together, and we did some initial work to start a local lending group on Whidbey Island. Eventually, several very established couples here on the island, who have launched a lot of initiatives that stuck, did the actual legwork to start our local lending group, Whidbey Island Local Lending, WILL. Where there's a WILL, there's a way.
Yes, nice. Wonderful. Could you tell us a little bit about what you've learned through the loans that you've made, and if you have any specific examples of how you went from just diving right in to where you are now, in terms of building a portfolio.
My intention has been on building the food system on the island, and it's because of the work I've done for this new book, Blessing the Hands that Feed Us. So one thing I've learned is that I'm not a venture capitalist, but I can keep an eye out. My understanding of what's needed in the food system gives me a framework so that I can keep an eye out for projects that I think start to fill out that frame. That's one thing I've learned. I've also invested in the greenhouse, and then there is a young farming couple whose commitment is to purchase their own land and farm it, not to do any of this spin farming or borrow land from other people, to really go for it and prove that they can actually make a living as farmers. I have great respect and affection for them. They came to a juncture where they actually needed to retire some of their mortgage very quickly, and so I told them, “I'll take it on.” I took on a portion of their mortgage, and again, we have interest that's coming to me in money at the level of what they might have paid the bank, plus one percent in vegetables.
We call it farm bucks...
It's a dicey thing when you're loaning in your community, because if it goes south, then you have the uncomfortable thing of “you're still here with the people,” but we were very careful in constructing the agreement so that we understood in advance, “Okay, here's the things that could go wrong with it, and here's what we're going to design in now so our affection persists, even if we hit hard times.” You start to know when you're doing community investing, and you're actually investing in your community, that part of that is, you’re investing in your own safety and future, your own acceptance in the system that will hold you throughout your life in terms of your health, well being. I live in a community where there is an attention to that. If you're a member of this community, and the community becomes aware you need something, that happens. So I'm storing my money in my neighbors.
A couple of things I do for my loans is: now, I always have a co-signer, so that there's somebody else I can get repaid from. I made a mistake of not having a co-signer once, and I'm not making it again. I put the repayment on automatic, so it's an automatic bank transfer. It's not in our daily interactions that this is happening. I have one local loan, not in the farming area, somebody very dear to me, and we've structured it so that sometimes she's hit a hard moment, a hard month, and so we've added months on at the end, but with clear agreements about that. It's really important to have the structuring of the loan be protecting the affectionate relationship in advance, knowing that things can happen, and so you figure that out in the beginning.
I really appreciate that you take that care to do that, because after all, these are your neighbors, and these relationships are going to last well beyond the scope of any short-term loan.
Would you please tell us about your experience as part of the local investing group WILL, and how does that help your local investing?
We started Whidbey Island Local Lending not much more than a year, a year and a half ago. Collectively, there is almost a quarter million dollars in loans already out, which is exciting.
Wow, that's amazing. In one year.
In one year. Yes.
There's a very large project, and I think this happens with other local lending groups, that sometimes there's a large project that quite a number of people participate in. We have one of those in our community as well. One of the things that helps is that Whidbey Island Local Lending, WILL, is a learning network, and I think we are all fairly innocent. I mean, some people are more sophisticated financially, but we are all pretty innocent in this local lending. So I think we have more confidence because we're doing it apace with one another. At our most recent meeting, we had small circles, we talked about what we love, what we are doubtful about, so that helps. Another example is several people have loaned to friends they would have never known had a need, had a business plan, but because there was this structure of WILL, these people that they knew could put in a proposal to WILL, and their friends could just snap it right up. That's helpful too; it actually creates a structure where people can surface their requests. Another thing, we've been a little cautious because we understand that this comes under a special category of the SEC of loaning to friends and family, so we're all a little cautious to befriend people, and to understand that we're not an investment club, that we're each individually cutting deals. Then there's this social aspect of it, I'm such a social person, that I love the spirit of it. Our communication to our community is that we are taking a portion of our wealth and we're putting it into our local community so that the prosperity of our local community increases. We're an aging community, you know, this [referring to self] is not unusual with gray hair. The people in WILL understand that we really, as elders, need to take some responsibility that younger people can flourish here. There’s a sense of, this is an appropriate true lending; this is appropriate cultivation.
Yes, mutual support.
Yes, cultivation of the young people we need on the island, or else we're going to be an odd community if we keep on as we're keeping on. This is exciting too.
Wonderful. Could you tell me about how you have seen local investing within the context of all of your money, and your whole portfolio. I think it's really fascinating the way you've put it together.
Yes. My wealth is divided up in a number of pots. One pot is that I own my house. Now that I own my house, it has a mother-in-law apartment in it, so the house is paid for, and also some of the ways I have people come through the house, the taxes and insurance are paid for. That's a piece of my wealth that is a stable point. I have, because of the program of Your Money or Your Life, encouraged people originally to buy treasury bonds. Another quarter, I don't know how many quarters there are, but another quarter is in US Treasury bonds and government agency bonds, so that's a steady income. Another quarter is in Socially Responsible Investing. It's the high risk, hopefully higher reward. I recognize that my values... I didn't want to just invest in some project someplace else. I have such strong relocalization and community values, I really wanted to have a portion, the other quarter of my money, in the local community. And I have social security. I have it structured such that I can play, this is not play money, I mean it's a quarter of my nest EGG but I can play in this realm knowing that I covered my bases in a variety of… it's a really balanced portfolio.
That's right. Yes. Any given one investment might run into trouble, and you got your bases covered in a lot of other areas. Even your local investing part is diversified in different businesses in different areas, and nothing is too big that would cause too much trouble if something did run into trouble.
Yes, I've learned that this is not some sort of warm fuzzy belly of the cat. This is money, and businesses don't always succeed, and so I never put in more money than I'm willing to lose. Even though I have cosigners, even though I have collateral, even though I do everything I can.
It's a good guideline.
Currently I have a loan out to a redo of a local vegetarian food restaurant. It's becoming a bakery, and it's really being transformed into something I think is going to be great for the community, that fulfills my commitment to local agriculture. I know what's needed more or less. I know a lot of things that are needed, so I have this idea: we need an everyday local food store; we need to have local food available every day. Then along comes this opportunity for a loan to this bakery and natural food restaurant and juice bar. I told the woman, I said, "How about we make it a little mini-coop within your restaurant for the farmer cooperatives so that they can bring in vegetables every day, and you have everyday local food?" She says, "Done."
That's something that if I had the knowledge and the chutzpah, I would have started the business because I'm so into this everyday local food thing. But along comes somebody who's got more savvy and more commitment than I do, and more stabilized. Her whole family is involved.
They’re ready to go and do it.
Yes, exactly. So it's just a thrill to support them.
Yes, it's also interesting how you're an activist with a vision, and you're investing to make it real right here where you live. I think that's just amazing.
Well, it's so cool. I started something called The New Road Map Foundation, I ran that. We actually, over years, gave away a million dollars in 800 small grants. For us, at that time, it was just our great pleasure to be socially creative through our philanthropy. I'm not in that position anymore; I'm not sitting in the foundation, but I'm sitting on this nest egg, and I can invest a quarter of it in the same proactive way. I really love the world with enterprise now. I love the world of putting together something that not only does good in the world, but also makes enough profit so that the money can keep circulating.
Yeah, that's amazing. Wonderful, I definitely wish you the best of luck with your local investing...
And I know that we haven't heard the end of it here. You're going to keep going, and building that portfolio out, and recycling the money into new projects over time.
Yes. I'm revolving loan fund.
That's amazing. I’d like to hear a little bit about your current projects. If you could tell our audience what you're doing right now, that would be great.
Well, I just happen to have it here. [Holds up book] I've written a book based on my Ten Mile Diet called Blessing the Hands That Feed Us: What Eating Closer to Home Can Teach Us About Food, Community, and Our Place on Earth. In January 2014, the book is released, and hopefully it will have a long and happy life. I've also organized a group of middle-aged women, we call it Whidbey Island Friends and Food and Farming. I'm also organizing groups to take a look at what's needed in the food system, that's really fun. So I've got the Blessing the Hands work, I've got the WILL work, I've got the WIFFF work.
You're working all the angles.
And I'm a part of a comedy troupe so...
Oh, my gosh. You're amazing. All right. I really appreciate you taking the time to sit down with me today.
Absolutely. It's fun to talk about all this.
Absolutely and I'd love to document it too.
Do you have a website that people could go to if they want to learn more?
Yes. Well, duh, it's VickiRobin.com.
Okay, that's easy.
And that's one stop shopping for the Your Money or Your Life work, the Blessing the Hands work, and some of my past projects, Conversation Cafes, and other things that I've done.
Very cool. Thank you so much, and again my name is James Frazier, Vicki Robin with me today. Thanks for joining us.
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