Well, I have had this conversation about four times over the last month and that means there is a cultural issue that welcomes illumination and discussion.
More and more people are finding that the best local bank they find has publically traded stock. This means they can buy stock.
So, I have suggested a “go local†opportunity. Put together a circle of friends and buy stock in the bank and switch your banking business there. Then hire a local marketing firm to promote banking local and disclose that you are shareholders. If you feel like it, covenant to dedicate a % of your potential capital gains to investing in small businesses that create jobs locally. Better yet, leave the whole pool committed to investing in local businesses who show the most excellence and promise of building wealth and tithe a piece of the profits to the civic organization and people who are part of making your place wonderful.
I checked with an attorney to make sure that this type of open partnership is legal. They say yes, however, since each state is potentially different, make sure you check with attorneys you trust locally.
If this works — and it may not, there are plenty of things that can go wrong while you are getting a few to go right — lots of local depositors will switch to the community bank, the banks deposits and lending with go up, profits will go up, their future will look brighter and the stock will go up. That means more money and resources for the local team. In addition, because of the multiplier effect of moving more deposits and investments to the excellent local players, the outlook for jobs locally should improve and investment and lending for small business and farms should increase.
OK, so when I describe this, I am told that there is something greedy about doing this. In the recent conversations, the person who says this has their retirement savings invested in the Tapeworm — as though making a rate of return that is lower than the rate of inflation banking War in Iraq or drugs for children is somehow ethically superior to — god forbid — huge and hideous profits creating financial equity in our community or creating jobs locally.
If you are invested in US Treasury securities, agency mortgage backed securities and the Fortune 1000, the only difference between you and Halliburton in terms of social responsibility is that they are getting a higher return at the same game. In fact, your willingness to finance the game at a lower than market return is increasing the power and sustainability of the Tapeworm.
This gets us down to understanding how to create sustainable communities. Sustainable communities have a positive return on investment — they are financially sustainable. That is, on average, for every hour invested or dollar invested, the investor gets a benefit greater than an hour or dollar. This is called “using your resources well.â€
Anytime you can withdraw your investments from the Tapeworm and shift them to financially intimate investments that build a positive return on investment society, its a two-fer. You weaken that which harms and strengthens that which gives life.
If investing in your local bank and then investing in a bank local campaign that succeeds in switching deposits to your bank makes you money, guess what? Lots of people in lots of communities will see that and try it themselves. And after they do the banks, they will look for other opportunities to swich purchases and investments together in a way that makes money.
Makes money…that means it is sustainable. The notion that making money is bad means that sustainable investment can never be financially sustainable. And that means that we all keep our retirement savings in the Tapeworm at below market returns which means we are not sustainable. Sustainable means just that. It is sustainable. That includes that its economics are sustainable — for those who participate as depositors, purchasers and investors.
Yes, a new world is percolating. But can we make it bankable? If the thought of designing or implementing profitable transactions gives offense, then we need to talk about this. We need some illumination on this point, because a successful new world will require trillions in successful transactions.
Where is Your Money? Put your entreprenuers cap on and start thinking about how you could make more money creating jobs and opportunity in your neighborhood and in your network in a manner that will attract your savings, your family savings and others savings out of where it is now — financing the Tapeworm.
