Living the Good Life on $5,000 a Year

Today's global financial cloud got you feeling gray? Vermonter Jim Merkel sees a silver lining.

Back in 1989, the Long Island native was a weapons engineer who helped design a cutting-edge computer that could transmit military secrets, survive a nuclear blast and, a decade before the dawn of the BlackBerry, fit in the palm of his hand. Sitting at a hotel bar in Stockholm, Sweden, he was drinking in his accomplishment when a bulletin flashed on television.

An oil tanker had hit a reef half a world away in Alaska, spilling 11 million gallons of crude oil, contaminating 1,300 miles of coastline and killing more than 250,000 seabirds, otters, seals, bald eagles and whales. Video showed the culprit to be the Exxon Valdez. But peering into a mirror behind the bar, Merkel saw only himself.

He drove. He flew. He consumed goods produced with or propelled by fossil fuels.

"Of course, the entire industrialized world stood indicted beside me," he recalls. "Our 'need' for ever-more mobility, ever-more progress, ever-more growth had led us straight to this disaster. But in that moment, all I knew was that I, personally, needed to step forward and own up to the damage."

Returning home to the states, Merkel decided to simplify. He not only cleared away stuff (enough for 13 yard sales) but also tapped his engineering degree from New York's Stony Brook University to calculate the economic and environmental savings. By doing so, he figured out how to live comfortably -- and income-tax-free -- on $5,000 a year.

To share his findings, Merkel penned a 2003 book, "Radical Simplicity: Small Footprints on a Finite Earth." That begat his Web site, And those begat his continuing string of more than 1,000 speeches, workshops and classes, including this fall's "Moving Toward Sustainability" course at the Wilder campus of Community College of Vermont.

Most people monitoring the current fiscal crisis are fixated on what they could lose. Merkel is focused on what everyone could gain.

"This belt-tightening is good for us," he says. "We're swimming in a society that's super consumptive. Right now is such a beautiful opportunity for us to become sustainable."

He's ready to show people how.

Oil and water

Growing up, Merkel was the sixth of nine children of a politically conservative, meat-and-potatoes trucker. Now 50, he lives by himself in a 14-by-16-foot cabin on a dirt road in Norwich, where he grows much of his mostly organic vegan diet.

Merkel didn't make that leap in a day. Instead, he started with small steps.

Settling in California after the 1989 oil spill, he began by biking to work. Cutting his fuel consumption, he then joined the Sierra Club and gave money to other environmental nonprofits. But his biggest move came after he read an Amnesty International report about human-rights abuses in countries where he was marketing his military computer.

"There I was," Merkel recalls in his book, "a jet-set military salesman who voted for Reagan by day, and a bleeding-heart pacifist, eco-veggie-head-hooligan by night."

His two selves felt as separate as oil and water. One, seeking frugality and freedom, asked, "How much do I need?" The other, seeking long-term financial security, asked, "How much can I get?"

Merkel decided not only to quit the business of war but also to stop paying federal tax dollars that could fund government weapons. To do so, he aimed to live on an annual income less than the U.S. taxable level of $5,000.

For most Americans, that figure seems miniscule. But back when Merkel made his decision, it topped the worldwide average income of $4,500. (Today that sum has risen to almost $8,000, according to the United Nations. Even so, 3.6 billion people, or 60 percent of humanity, live on less than $520 a year.)

Seeking ways to cut costs, Merkel turned to the best-selling book "Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence" by Joe Dominguez and Vicki Robin. It asks readers to add up their cash assets, estimate the value of their possessions and then keep track of every penny they spend to see whether their purchases equate with their personal ideals.

"I knew how to run numbers on big business deals," Merkel says. "I started to run the numbers on my life."

'I had a lot of toys'

Two decades ago, Merkel was living in a four-bedroom house spilling with stuff. To simplify, he sold almost everything. Out went his motorcycle, his pickup truck, his antique car, his speedboat.

"I had a lot of toys. And other things -- you need a leather jacket to ride the motorcycle. And tools -- when I felt empty, I would buy more tools."

Merkel cleared enough space to rent out three spare rooms, helping him cut his monthly bills from more than $1,000 to about $200. Four years later, he sold the house, banked the money and toured North America, Europe and Asia -- he has traveled more than 17,000 miles by bike -- to study how different communities and cultures are working toward economic and environmental sustainability.

In 1990, for example, Merkel visited Arizona to help distribute humanitarian aid to 300 Navajo families. He listened as an elder woman told how the government wanted to relocate her tribe so it could mine for an estimated $100 billion in coal.

"What can I do to help?" he asked.

"Go back to your people and tell them to live simply," he recalls her saying. "Then they wouldn't be out here digging up Mother Earth for coal and uranium."

Three years later, Merkel went to Kerala, India, a state of 30 million people who are educated and healthy though they earn 60 times less than the average American income. He saw how citizens harvested coconuts for meat and milk, used husks to fuel fires and wove fronds into hut walls, roofs and twine.

"There are no clear-cuts, no factories, no fossil fuels, no insurance and no marketing," he recalls. "Fuel, food, shelter, fishing nets, ropes -- and they never killed the tree!"

In comparison, Merkel read the book "Our Ecological Footprint: Reducing Human Impact on the Earth" by Mathis Wackernagel and William Rees and discovered that the average American's material consumption, calculated by the amount of land required for harvesting and waste disposal, equals 24 acres.

Can this change? Merkel founded the nonprofit Global Living Project in 1995 and figured out ways to reduce his ecological footprint to as low as 3 acres (below a person from China and above a person from India). He then shared his solutions in "Radical Simplicity," a 288-page book from New Society Publishers now in its third printing.

Merkel considers himself a better mathematician than a writer. But his book has garnered praise (and its foreword) from "Your Money or Your Life" coauthor Vicki Robin. Progressive historian Howard Zinn, for his part, calls it "the most persuasive argument I have yet seen for all of us to radically change the way we live day-to-day."

'It's not a hardship'

So what's Merkel's solution?

"The easiest is simply to take less."

He also suggests "sharing" housing and transportation ("Share with another person and halve your impact; with four people, quarter the impact") and "caring" for what you have, be it properly maintaining household items or supporting communities by producing and purchasing goods locally.

Farm stands and mom-and-pop stores are close, but aren't supermarket prices cheaper?

"What you don't pay over the counter you pay in taxes, dirty air, dead animals, polluted water, clear-cut forests, sweatshops and strip-mined lands," Merkel writes in his book. "Small-scale bioregional producers, although their products might use less energy and materials and create less waste, don't get big tax breaks and bailouts or discounted access to resources because they wield less political influence."

In 2001, Merkel moved to East Corinth to help maintain 27 acres owned by The Good Life Center, curators of former Vermont homesteaders Scott and Helen Nearing's property in Harborside, Maine. Four years later, he became Dartmouth College's first sustainability director and moved to his fixer-upper cabin in Norwich so he could bike seven miles to the New Hampshire campus.

Pedaling aside, Merkel was paid to walk his talk. But the paycheck unexpectedly tripped him up. Earning more money than he had since leaving the military, Merkel almost doubled his annual spending to as much as $10,000. And so after two years on the job, he quit. He's working his way back to living on $5,000, which he reaps from part-time teaching, speeches and investment interest.

Merkel may sound pay-as-you-go old-fashioned, but he plugs into modern conveniences like the Internet.

"I have bills like everyone else. I'm just very conservative with things."

His monthly electric bill, for example, is "$9 and change" because he limits his use of lights and appliances. He fuels his 1992 Honda Civic (averaging 45 miles per gallon) only when he can't bike. He can't control his property taxes, but he can plant an eighth of an acre with summer fruit and salad fixings and winter root-cellar and canning staples including beets, cabbage, carrots, onions, potatoes and squash.

And, if necessary, he's willing to throw in the kitchen sink.

"You might wash dishes with wood ash as I did at Gandhi's ashram in India."

Seems like work? It doesn't have to.

"It's not a hardship -- it's the frame of consciousness I put myself into." One example: "Say you are growing tired of weeding the garden. Many of the common garden weeds are edible and nutritious."

Coffee with that?

Most of Merkel's choices are calculated. Consider whether he should eat meat. He tapped a mathematical formula to determine that, because gardening consumes less land and resources than raising animals, a soybean-based tofu burger impacts the environment four times less than a chicken burger and 14 times less than a beef burger.

Merkel has enjoyed boiling maple sap into sugar. Then he discovered he had to burn nearly three cords of wood to make 16 gallons of syrup, "so I got a beehive."

Sending an e-mail requires a few seconds of electricity, while mailing a letter consumes a tree and truck fuel. But when the engineer weighed all the metal and plastic in his computer, he discovered an electronic message is three times as ecologically damaging as a letter.

That said, simplicity doesn't have to be complicated. Merkel has a shortlist of synonyms for "Earth-efficient": simple, safe, local, low cost, readily available, recycled. He has followed them for almost two decades, even as most Americans sought shelter in mortgages and credit cards.

Then the world's economy tanked this fall on a reef of bad debt.

"Every year this gets more pertinent," he says, "especially with this current economic adjustment."

Virginia's Longwood University has begun to assign Merkel's book annually to its more than 1,000 incoming freshmen. The author, speaking there recently, brought his own coffee mug to save a disposable cup. Then a student asked how the man who wrote about the dangers of coffee-plantation deforestation and "all the fuels needed to harvest, process, ship, roast, deliver, grind and brew the beans" could swallow the end product?

"My take is not to micromanage everyone, to say 'good' or 'bad,'" Merkel says.

Instead, he hopes people will think about each individual choice that, in combination with others, best balance what one wants with what one needs.

"For one person, the motivation may be saved money; for another, saved Earth; for another, more free time; for still another, creating conditions for world peace."

And for all, Merkel hopes simplicity will bring the same payoff: peace of mind.

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