Amish Approaches to Financial Independence

Last week my wife and I had the opportunity to visit an Amish settlement in southern Minnesota.  We went on a three hour tour of Amish farms with a private guide who knew the families well and was welcome on their farms and businesses.  There are about 800-900 Amish that live in the area on dozens of farms.  It was really interesting to learn a bit about how they so successfully achieve financial independence by working together and living a simple lifestyle.

As you probably know, the Amish have devout religious beliefs which cause them to choose a life where they “do not conform to the ways of the world” (from the Bible’s book of Romans).  Different districts have different rules, but in general they forgo electricity, modern vehicles, and communications.  They keep quite busy working without the technological advances that we ‘English’ take for granted.

  • SMART REAL ESTATE – The Amish came to Minnesota in the 1970s.  They settled here from Ohio and Pennsylvania where land had become 10x more expensive than it was here.  They rarely take on debt, so this was a smart land arbitrage for them and they have generally been moving west since.
  • GROWING FAST – It was surprising to me to learn that the population of Amish has doubled in the last 30 years and they have been buying up small family farms from ‘English’ people.  Our guide shared that the average Amish household has 6 children and 90% of them stay with the settlement their whole lives.
  • SUCCESSFUL BUSINESS PEOPLE – In addition to farming, they work together to run small businesses that bring in money to support their frugal lifestyle.  The Amish are hard working and very successful small business owners.  I’ve read that as many as 95% of their businesses are successful, versus 50% of small businesses in general.
  • CRAFTS PEOPLE – Amish furniture, jams & jellies, quilts, and other crafts are highly sought after in nearby ‘English’ stores.  One Amish family drives their buggy 90 minutes (each way) into a nearby town to sell vegetables at a farmers market.  Two Amish sisters we visited have a quilting business and employ young girls from throughout the Amish communities to help with sewing.  Another family has a bakery on their farm that produces dozens of loaves of bread and other bakery treats daily.  Buses bring people to buy their baked goods.
  • LIVING FRUGALLY – On one Amish Farm, we were invited to see the house where the mother of one of the farmers that ran the property lived.  It was a simple three room home with only cold running water from a cistern, a wood stover/furnace, and very simple furniture.  She used an antique, pedal-powered Singer sewing machine for making quilts and kerosene lamps for light.
  • GOOD SAVERS – While it is estimated that many Amish families live below the national poverty level, with such a basic and low-cost lifestyle, the Amish are still known as good savers.  A book by Lorilee Craker called “Money Secrets of the Amish” suggest that they save up to 20% of their income.  Compare that with the US average savings rate of 6.6% last quarter.
  • HELPING EACH OTHER – The Amish are well-known for the cooperation they have within their communities, such as barn raisings and helping each other with spring planting and the fall harvest.  They generally don’t have insurance, they don’t take public assistance like food stamps, and they are exempt from social security taxes (and don’t receive benefits).
  • AMISH RETIREMENT – I spoke with one Amish man – ‘Eli’ – who was retired.  I would guess he was no older than 60 years old.  He had built a large furniture business – making beautiful tables, chairs, consoles, and wooden decorations –  that his daughter and her husband took over.  He said was spending “far less time working on the business than he thought he would” at the time he retired a few years ago.  “I’m happy to help in the shop now and then,” he said, “but I don’t want to touch the bookkeeping!”

Visiting the Amish and hearing about their simple lifestyle gave me an interesting perspective on financial independence.  They are perhaps the ultimate example of frugal living and are quite successful economically.  Their high rate of membership and growing population speak to their ability to craft a lifestyle that they find meaningful and satisfying.  I am looking forward to learning  more about their approach to financial independence and thinking about the relevance of their lifestyle choices to some of our own.

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4 thoughts on “Amish Approaches to Financial Independence

  1. Such a great story!
    You remember me about my grandparents: a small farm, extra jobs, selling periodically to the local farmer market etc.

    Amish are hard working and financial disciplined, and that’s why are where they are.

    Liked by 1 person

    1. Yes, I was surprised that the Amish gentleman we met described himself as retired. He was fixing the weather stripping on the door to his house when we arrived, so although he may not be getting paid, I think he still keeps busy working.


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