Amish economy

The Amish way to wealth is found in delayed gratification, hard work and thrift.

When Wall Street banks hit rock bottom three years ago and investors across the nation were crying uncle, members of one American subculture emerged relatively unscathed.

The Amish, with their horses and buggies and their "upside-down" values, were largely unaffected by the financial crisis, living contented lives and amassing cash.

"Their whole world view is based on living below their means, never ever above their means," said Lorilee Craker, author of the book "Money Secrets of the Amish: Finding True Abundance in Simplicity, Sharing and Saving."

"They are so much more prudent than the rest of us," she said. "They like the sense of security. They like to know they have a big cushion for a rainy day."

In a material world where economic success is often defined by big houses, flashy cars, caviar and champagne, the Amish way of wealth is found in delayed gratification, hard work and thrift.

The No. 1 dream item on an Amish family's wish list is often to own a farm that can be passed down to future generations.

One 45-year-old Amish farmer Craker interviewed during her research had saved $400,000 over the course of 20 years toward the purchase of a $1.3 million farm.

He and his wife saved that down payment while renting a farm and raising 14 children.

"I looked for signs of stinginess, of a wife and children suffering somehow under the regime of a tight-fisted, straw-hatted Scrooge," Craker wrote of her visit with this family. "No one seemed deprived; in fact, just the opposite. Amos and Fern's adorable children have a calmness and peace I find striking and appealing."

The Amish do not buy into the added expense of modern conveniences that many others take for granted, such as automobiles, telephones and electricity. But that also means they rely on sunlight and they're limited in how often they can visit and communicate with people outside their community.

Another aspect of the lifestyle is the absence of personal debt.

Buying a farm is one of the only reasons the Amish would consider borrowing money, because they passionately avoid debt. They also have little respect for people who do not pay their bills on time.

"To pay someone on time is an extension of the commandment 'Do not steal,' " said one Amish man interviewed for the book. " If it's due on the 10th and you pay it on the 15th, you are stealing that man's money for five days."

Lancaster, Pa., banker Bill O'Brien can vouch for their creditworthiness.

HomeTowne Heritage Bank services $225 million in loans to Amish people, and Mr. O'Brien's customers are almost exclusively Amish. In 20 years, he said he has never lost money on an Amish loan -- ever. He can count on one hand the number of loan forbearances, or requests for a temporary delay or reduction in loan payments, that he has been asked to grant.

O'Brien told the Pittsburgh Post-Gazette that 85 percent of his institution's loans to Amish people are for the purchase of farmland. The other 15 percent are loans for primary residences and for rental property owned by Amish people.

Members of the religious sect usually limit their borrowing for real estate only, and they will always save at least 20 to 25 percent of the purchase price of whatever real estate they want to buy.

"After 20 years of working with the Amish, I have learned a lot from them," O'Brien said. "The Amish are like us, but they have certain beliefs that keep them from making the mistakes we make economically. They are more apt to stay within their means than the rest of the population."

Craker's interest in the Amish culture was piqued in 2008 while listening to an NPR report on how a bank in Lancaster that served the Amish community was having a record year even though banks across the nation were reporting heavy losses and even going out of business.

She found that money saving is built into their culture.

"They are very green," Craker said. "They like their food sourced naturally. They raise their own beef and chicken and butcher it themselves."

They find a second or third use for everything, going to great lengths at times to fix what is broken, patch what is torn and repair what is repairable. Generally, the Amish use things until they wear out -- completely.

The secret of the Amish people's financial success could have much to do with realizing the best things in life are free.

Recreation has nothing to do with trips to the mall or high-priced vacations. They opt for hiking, volleyball and badminton.

Ice cream is their number one extravagance, and it must be eaten quickly due to the prohibition against having electricity in the home. One Amish woman admitted her biggest indulgence was to treat herself to Ritz crackers.

"I told one of the Amish teenagers how much movie popcorn costs and she nearly fell out of her chair," Craker said.

"She and her family play dominos on Sunday nights and start a fire and make big bowls of butter popcorn for way less than $9."

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.