This week’s guest contributor is Rachel Lawrence, CFP®, MSFP, of Reverie Wealth (Website)
If you’re a reader of Feminist Founders, I’d be willing to bet you’re the kind of person who values justice, fairness, and equality more than hoarding as much money as possible. Maybe you want workers to have more power in the economy than they do today, and you probably put human well-being over corporate or personal profit.
Welcome to the Anti-Capitalist Club! (The “Less Capitalist Club” just doesn’t have the same ring, but might be a better name for it.)
Have you, like me, just joined in the past few years? As a former libertarian, this is the last place I thought I would meet you, but then real life happened—unpaid maternity leave, gross inequality in compensation in the corporate world, a divorce from misogyny both in my marriage and in my religious beliefs, and voila! Ayn Rand has been replaced in my repertoire by Tricia Hersey and bell hooks.
Who else am I besides a divorced (remarried), exvangelical, non-libertarian (politically independent) mother? I’m a CERTIFIED FINANCIAL PLANNER™ professional (we have to write it that way) with a master's degree in personal finance.
In my financial planning business, Reverie Wealth, I help progressive, mid-career women and their allies with all areas of their money — saving and investing for goals, planning for retirement, budgeting, debt, insurance, estate planning, charitable giving, etc. I know how to make the most of your money inside a capitalist system.
What I’m just now starting to learn after 22 years in this career is how to think about achieving those goals outside of capitalism.
As I start down this new path, I’m questioning everything I thought I knew about personal finance and money. For example, what is the opposite of capitalism? It’s not necessarily socialism, Marxism, or anarchy. It’s community—valuing the good of all over the benefit of individuals.
So how do we, as anti-capitalists, use a community lens to plan for financial goals in a world driven by money, profits, consumerism, and individualism?
As a new Anti-Capitalist Club member and long-time participant in the financial services industry, this has become one of the most important things to ask myself. To be honest, I still have more questions than answers, but asking questions is how we begin moving away from capitalism and towards a new economy that can be more equitable and regenerative.
Redefining Wealth
First, we need to question the definition of “wealth.” I talk about this with my kids all the time. Wealth isn’t just about money or assets. Wealth means that you have plentiful valuable resources. Maybe that means a bountiful garden, or a supportive community who can step in to help if things get tough, or hilarious friends who can make you belly laugh.
Pause here and think: What resources are the most valuable to you? Social connections? Personal fulfillment? A thriving natural environment? Equality of opportunities? Access to information? Artistic creativity? Good health? Time to spend on rest? Comfortable shelter? Delicious, healthy foods?
When we think about planning for retirement, or more generally, covering the costs of a life in which we value community, these resources are what we are actually trying to achieve, not a dollar amount or account balance.
Meeting Resource Needs Without Money
Once you redefine wealth and understand what resources matter most, you can start to look at what would it take to obtain those resources without using money. Can you grow your own healthy food? Invest time and energy into building social connections? Start a lending library with friends or visit one in your local community? Trade services with someone?
I know it isn’t always possible to totally avoid money given current economic structures. You need money for shelter, as an example. This is where you can get creative with alternatives, especially ones you don’t often see.
If you can’t grow food, can you trade your services or something you own with someone who can? Can you live with multiple people to reduce your costs or trade landscaping services for a reduction in rent? Is it possible to use public transportation or human-powered transportation instead of a car? (Shout out to Hannah and Dave, and Bryna and Joe, who very purposefully have one vehicle per family and use bikes or public transportation instead!)
When I build financial plans for clients who want to move away from capitalism, one of the things we talk about is how to reduce their need for income or money now and in retirement, so there’s less need to grow their money by investing in companies that exploit humans and damage our environment.
To live a less-capitalist life, we need to work towards finding happiness and fulfillment with less material consumption, and towards having needs met and helping others meet their needs through community.
Getting Money More Fairly
Since we know we can’t always meet our current and future resource needs without using money (yet), let’s turn our attention to getting it. How do we get money fairly and equitably without exploitation or degradation? Whew, I really don’t have all the answers to this question yet, but there are things to try.
1) Instead of businesses having structures where all the profits flow to the owners at the top, we can move towards cooperative models that prioritize democratic ownership and decision making, and equitably distributing the profits among workers. Or, we can use non-profit or public benefit corporation structures where it makes sense.
2) We can decide on how much money is enough to meet our resource needs, and aim for that amount. If we make or have more, we can redistribute it through mutual aid requests or nonprofits to others whose needs aren’t met.
3) We must advocate for policy changes that will promote economic justice, such as universal healthcare, better social safety nets, and fair labor practices. Yes, this means getting involved in politics. (I served for a while on my City Council and got to help allocate city funds toward childcare and the unhoused.) We need folks who care deeply to get involved, especially those who have traditionally been excluded. Run for school board, or a council seat. Write to your local leaders. Show up to speak at city council meetings or hearings at the state house.
4) Reject consumerism, and live minimally with intention. Avoid advertisements. Get dopamine from moving your body or helping others, instead of from shopping. Set criteria for every purchase, like it must last a certain number of years or it must be made ethically and without plastic. The more you decrease your lifestyle needs, the easier it will be to meet your needs without money.
5) Move towards responsible investments whenever possible.
Responsible Investing
This is a big one, so let’s dig in deeper. How can we invest our money in a more environmentally, socially, and governmentally (ESG) responsible way?
Let’s say you have followed traditional financial planning wisdom and have contributed to retirement accounts like IRAs or 401(k)s. Once the money is in there, you need to choose where to invest it—most people don’t want their money to sit and earn nothing over time.
(Side note: if we are truly aiming for regenerative economics, we need to talk about degrowth, which is planning for negative returns over time. More on that in a few paragraphs!)
Responsible Investing in an IRA or Brokerage Account
How do you choose investments that better align with your values? If you have your own IRA or brokerage account, you can usually pick from the whole universe of mutual funds, exchange-traded funds (ETFs), or individual stocks or bonds.
For non-ESG investing, it’s super easy—you pick a target date fund with low fees that lines up closely with when you need your money. There are target date funds out there that claim to be ESG responsible, but they often have problematic holdings.
One example is Tesla, which claims to be more environmentally friendly but has a history of worker abuse and is owned by the world’s richest billionaire known for fighting fair and just policies. Another is Microsoft, which checks a lot of ESG boxes but has many issues with diversity, equity, and inclusion, including numerous sexual harassment lawsuits, and has close ties to the Israeli military.
I don’t recommend ESG target date funds to my clients, and instead have created a heavily researched portfolio of mutual funds and ETFs to minimize those problematic holdings.
Until better ESG-filtered target date funds or robo-advisors become available, the best way to find these kinds of ESG investments is to work with an investment advisor who specializes in them. You’ll have to pay a fee, usually 1-2% of the investments they manage for you, and have a minimum account of $25,000 (that’s my minimum, and my fee is 1%).
If you don’t meet those minimums, like most of us don’t when we first start out, progress is better than nothing, so check out the ESG target date funds available here.
Another option for those with bigger IRA or brokerage account balances (typically above $100,000) is to use individual stocks and bonds. This is almost always done through an investment advisor unless you’re an investment professional yourself.
I ask my clients who want this kind of portfolio to choose between two sub-account managers—VADIS through First Affirmative or Ethic, each of which use values-related data on companies (like CEO-to-worker pay ratios and private prison involvement) to include or exclude companies that meet my clients’ criteria for what they do or don’t want in their portfolios.
Another interesting, less-capitalist way of investing is a “community development financial institution” or CDFI. This kind of investment would take the place of individual bonds in traditional capitalist “asset allocation” structures.
Responsible Investing in Work Retirement Plans
If you have money in a retirement account through an employer or if you offer retirement accounts to yourself or your employees, your options may be more limited. Most employer retirement plans have a menu of investments that you can choose from, and most of them are not ESG-filtered.
In this case, it may be necessary to use funds with harmful companies inside of them. You can talk with HR or your retirement plan provider about including additional options that are ESG-filtered, but that may be difficult to get changed. The more people who ask to add ESG funds, however, the more likely they are to do so.
“There is no social change fairy, there is only change made by the hands of individuals.” Winona Laduke
If you’re lucky, your employer retirement plan might have what’s called a “self-directed” option, instead of forcing you to pick from a limited menu of investment options. You might be able to choose from almost all mutual funds, or from all mutual funds and ETFs, or all mutual funds, ETFs, and individual stocks, depending on the company that runs the plan for your employer.
‘Degrowth’ and Investment Returns
We’ve already covered a LOT, but there is at least one more big thing we need to ask ourselves in order to start moving away from capitalism when planning for our financial goals: What should we expect to get for returns on our money if we invest it?
If you’re saving or investing it, you hope for some sort of “return,” whether you put your money into a savings account or investments. When building financial plans, I almost always assume some sort of positive growth over time on savings and investments, otherwise we’d all need to set aside way more money to pay for future lifestyle needs.
You’ve probably heard that the most powerful part of investing is “compounding”, which means growth upon growth upon growth. But is unending compound growth sustainable or regenerative for future generations? What will happen if the world's population keeps growing and we all keep aiming for growth in our savings or investments? We’ll eventually run out of resources, right?
The only way for us to move towards regeneration and away from destruction is to use less, and/or to have the population decline over time. This is “degrowth.” Ultimately, if we truly want to be anti-capitalist, we should be working towards an expectation that our resource needs shrink over time, including having less money available to pay for things that can’t be made, found, or traded for ourselves.
Where Do We Go From Here?
I’ll be honest, I’m not there yet. I know that if I start showing my clients financial plans where they have to save 30-50% of their income just to replace a lower-cost lifestyle than what they have today because of degrowth, most of them will stop being clients and I’lll no longer have the money I need to provide valuable resources to my family.
I’m comfortable with and addicted to all the luxuries of middle-class America— on-demand hot showers, clean water, the option to travel, air conditioning. I don’t grow most of my own food, and I can’t always trade with folks who do.
But instead of giving in to current systems because we can’t be perfect in our anti-capitalism, let’s aim for progress instead. Ask yourself the questions I’ve posed today, and then ask even more questions! (Share them with me if you come up with good ones!)
Let’s aim to get 1% better every day, or every week, or every year. Because that is a compounding power that can truly change our world for the better 🌍 🌎
Rachel Lawrence, CFP®, MSFP, of Reverie Wealth is passionate about money ideas that work in the real world for real people, using your core values to guide financial and other life decisions, backing up financial planning principles with research and evidence, tackling systemic issues in ways that can be good for both the world and our bottom lines, and like a true Enneagram 7, finding ways to have fun while doing it all. (Website)
A great article that raises important questions for those of us with wealth of all kinds.