Think globally, invest locally
While Aunt Ruth believes it is time to banish the word “trending” from the cultural vocabulary—the phrase is a little smug—there is no doubt about it: The idea that we should work, play and eat a little closer to home has taken root. Perhaps just the shallow roots of an idea “trending,” but still.
Better fresh fruit from a local farm than something shipped across multistate lines. Better a bike ride to the local store than a long car trip to the city. Better, on so many levels, to telecommute to a job and dispense with the car altogether.
Why, then, not apply the same logic to your own financial investments?
The book is called Locavesting by Amy Cortese. Published last year, Cortese followed up on the question posed by Woody Tasch, the founder of Slow Money: What would the world look like if we invested 50 percent of our assets within 50 miles of where we live? Helluva question.
On her website, Cortese notes: “A dollar spent at a local independent business, on average, generates three times more local economic benefit than a dollar spent at a corporate-owned chain. … Just 1 percent of the money flying around the stock market goes to funding businesses through public-stock offerings; the rest is trading and speculation. … If Americans shifted just 1 percent of their investments to locally owned companies, more than $260 billion would be injected into the Main Street economy—without costing the government a dime!”
(And never mind how skilled the members of the Fortune 500 are at not paying taxes, a nimbleness Auntie Ruth imagines only the very rich can afford. Even if most governments can’t.)
The concept has a lovely regional manifestation. Solar Mosaic, a Berkeley-based company, crowd sources investors in support of worthy solar projects: a panel of solar panels on the roof of St. Vincent de Paul in Oakland (where hot meals and job training are provided to those in need), the People’s Grocery and the Asian Resource Center, also in Oakland. (And, OK—beyond these three local ventures, they’ve invested in a couple of nonlocal, if irresistible, projects like the Murdoch Community Center in Flagstaff, Ariz. Purity is for the politically uncertain.)
What’s the return like? While, according to Bloomberg, Warren Buffet and Google are gobbling up solar-energy development, attracted to the 15 percent returns, Solar Mosaic will offer investments this summer that S.M. president Billy Parish estimates will pay 5 to 10 percent returns.
Think globally, invest locally. Helluva idea.