How to spend a PFD
What’s a PFD, you ask? The Permanent Fund Dividend (Alaskans just call it a “PFD”) is an annual dividend that’s distributed each autumn to qualified Alaska residents (qualified means you’ve resided in Alaska for least one full calendar year and not have a prior felony conviction)
In other words, it’s free money you get to live in Alaska.
The PFD was designed to be an investment where at least 25% of the oil money would be put into a dedicated fund for future generations who would no longer have oil as a resource. It’s based on the principle that the natural world and its resources — such as air, water and natural petroleum — are the common property of all persons, and cannot be privately owned.
Here’s how some Alaskans might spend their free money
The 2016 PFD is $1,022, which isn’t bad. It’s certainly a step up from the record low payout of $331.29 in 1984, but less than half of the highest amount of $2,072 in 2015. $24,775 total has been paid over the PFD’s 27 year history.
Let’s see what this year’s payout gets you in Alaska:
Almost an adult season ski pass to Alyeska
A new GoPro Karma drone
Alaska is one of the world’s best places to take mind-blowing drone footage. GoPro’s latest gadget dubbed “Karma” isn’t out until October 23, but you can pre-order one for $799.99 and still have $222.01 left over.
You’d still have more than enough for the “Seeker” hydration-compatible accessory backpack.
REI and Anchorage go hand in hand, and it’s very common for Alaskans to spend their entire PDF on new winter gear. $1,022 will get you a nice cold-weather coat, snow pants, thermals, gloves and a hat.
(Pretty considerate if you think about it: Alaska gives its people enough money to survive those harsh winters).
Okay, so you can’t technically purchase warm weather in Alaska, but you can buy yourself a ticket out of state to a warmer place. Mexico and Hawaii are Alaska’s top winter destinations, and there are many direct flights to both on leading air carriers (like Alaska Air).
With $1,022, you’ll definitely need some extra cash for your hotel, food and souvenirs.
Somewhere in all of us are the seeds of generosity and charity. Many Alaskans take their PFD and get right down to their Christmas shopping, knocking down that gift list without hesitation.
$1,022 is probably an ample amount to give friends and family their share of holiday bliss. Better yet — give it to charity…or both!
Some Alaskans either don’t need the money right away or are responsible enough to save it versus spend it all on “stuff.”
A lot of Alaskan parents save their kids PFDs growing up: you can only imagine how awesome it is to turn 18 and get all your PFDs in one fell swoop.
This isn’t hard to do at all. You could take your $1,022 and blow it all in one glorious night…use your imagination. You could also stretch it out over the year and treat yourself to $19.65 worth of coffee and lunch once a week.
Some final words
This post is half in jest. It’s important to know that some Alaskans will actually use their PFD to make ends meet, like buying food, rent, gas, childcare or basic clothes.
The good news is that Alaska now has one of the lowest rates of inequality and relatively low levels of poverty compared to other US states.