Laura Ingalls Lessons on Finance
When I was a little kid, my mom would read the “Little House" books to me about Laura Ingalls Wilder and her family. I didn't realize it at the time, but I was receiving my first and deepest lessons in finances during those reading sessions.
I recall “Pa" referring to “Cash on the barrel” being the best way to do business; but when actually making purchases he did it on credit instead. He always said it was best to pay in cash, he never did it, and he was always in debt. I decided at a young age it was a good idea to avoid making purchases I couldn't transact in cold, hard cash.
The other main lesson I learned from Laura's writing was the power of barter. In “Farmer Boy,” Almonzo learns about making transactions by trade and cash. I realized that if someone has something I need, and I have something they need, we can make a swap that profits both of us, without the complication of money.
As a knifemaker, I've let my customers know that I am willing to trade my knives for certain items, especially antlers. The antlers can be cut up and used for knife handles, or sold to pay rent. Many times I've been able to make a transaction with someone through an antler trade because they either didn't have money to spend on a knife, or they knew their wife would appreciate them getting rid of the antlers. If I need handle material, I keep the antlers. If I don't, or if the antlers are poor quality I can pass them on to a horn buyer for cash. Either way it’s a win for me.
As for the “cash on the barrel” principle, it saved me from a bind on a previous business scheme that fell through.
I had wanted to get a pilot's license and fly for a living, and had considered taking out a loan to cover the tens of thousands of dollars to get me through the program. I fell back on the “Little House Lessons” and worked, scrimped, and saved to pay for my flight hours.
I got my license and then had to decide whether to rent someone else's plane to build more time in, or buy my own plane. I figured if I rented, I would be dependant on someone else giving me a job, and if something rendered me unable to fly, I'd end up with a very expensive but worthless logbook.
On the other hand, if I had my own plane I could start my own business, and if something went wrong I could sell the plane and recoup the cost.
I chose the latter, and I'm glad I did, because something went wrong.
"Covid" came along and threw a wrench in everything. Employed pilots started losing their jobs, and I was prevented from starting my business. Because of my financial decisions, I didn't have any loans to pay off and I was able to sell the plane.
I follow the same principles with the knife business. If I can't pay cash for a tool, material, or advertising, I don't get it. The business pays for itself, and bartering has helped considerably.
Hopefully, the business will pay for a house someday too…
Still working on that.