Moving Your Money: Investments

Is your money, like mine, in gigantic Mutual Funds you know almost nothing about?  I hate to think about what I’m actually invested in so I took a look at what Fidelity’s Asset Allocation fund, Asset Manager 60%, is invested in.  Their top 10 include a number of treasury notes and bonds and Fannie Mae and Freddie Mac and Barclays and Apple.  They have almost 3000 different holdings in the fund.¹  The treasuries tend to support the big financial institutions and I’m just not sure how I’m feeling about Fannie Mae and Freddie Mac these days. 

I want to put my money somewhere that is controlled by real people not Wall Street algorithms.  I want my money to be put to work to create real value for real people; health, happiness, well being.  The things Robert Kennedy suggested were missing from our GDP in this wonderful speech of his:

I discovered a fund that seems to hold real value at the heart of its investments AND make a good return.  Portfolio 21.  Portfolio 21 was written up in the June issue of  Financial Advisor’s article, New Ways to Measure Risk: Portfolio 21’s Black Swan Strategy has Delivered Alpha Nine Years Out of Ten.  Their strategy of investing based on sustainability factors has been very successful when measured against the S & P 500 Index.  Portfolio 21's 10 year performance is nearly twice the S & P 500.

Check them out and let me know what you think.  I'm moving my money!

¹ Accessed November 26, 2011: http://fundresearch.fidelity.com/mutual-funds/summary/316069582?refpr=MFEval_40f

Occupy Thanksgiving

What is Occupy Wall Street about?  While people continue to camp out in the streets in cities all over the country, many of us are discussing them. The Occupy movement is about basic values and principles of social justice.  Many of us feel that the government is not adhering to our principles of fair play and mutual loyalty and support.  Perhaps if we stand in the street someone will notice – notice that our work, our lives, our families, our homes, our country, matter to us. 

Photo: Tom Giebel

Our government seems to have forgotten that we are the country, and that our wellbeing is the wellbeing of our country.  The GDP doesn’t measure us.  Vast -- almost unimaginable -- sums of money are being poured into the banking system.  Wars are being fought for we know not what.  Laws are passed to benefit the oil industry and agribusiness at the expense of the rest of us. That money needs to come home to America – to the people in the opening words of the Constitution, “We the People”. We need jobs, we need health care, and we need homes and a decent education for our children.  We need to pay off our debts and let go of a lot of our stuff.  We don’t care about having more; we care about having enough. We care about each other.  We care about our neighbors, our land, our towns and our cities. 

As we give thanks this week, we think about the simple things that we are actually thankful for, the people we love, the earth beneath our feet, the beauty of love and life.

Crowd Funding Private Equity is on its way!

What is crowdfunding?  This video gives you an introduction.  Why can't we crowdfund as investors already?  Because in order to invest in private businesses you must be someone wealthy (over $1 million in assets) and have gone through a process to become an accredited investor.  Even if you've gone through that process, it's not always easy to find the kinds of investment opportunities you're looking for because the regulations limit publicizing private equity opportunities.  These regulations were put into place to protect the public from schemers and shysters. They figured the people of high net worth were less vulnerable to schemers. 

AND by not allowing the 99% to invest in private businesses (except their own or their family's) the opportunities to get our money out of Wall Street and on to Main Street are very limited. This bill, which seems likely to pass, would make give the opportunity to invest in private businesses to all of us.  That gives us the opportunity to support businesses we know about and care about.

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So, just one week ago, I let out an involuntary whoop! when I saw this image on twitter: 

Introduced by a Republican member of the house, Patrick McHenry of North Carolina, the Entrepreneur Access to Capital Act is a truly bi-partisan bill.  President Obama made an official statement in support of the bill the day before it passed. The bill amends securities law to be user-friendly (or not at all so onerous) for small businesses to attract small-time equity investors who are not necessarily wealthy (accredited) investors.  The official text of the bill is likely to change in the Senate so keep an eye out!

Although I like the game-changing aspect of unleashing the small money of the masses to help small businesses  there are big potential pitfalls to investing in private businesses.  Small businesses, especially startups, often fail and then you're left with nothing.  Your shares in small business can't easily be liquidated.  If you need to get your money out of your shares in private business, that is pretty much impossible to do.  These investments are not publicly traded.  You can't just put them on the market to sell, because there isn't a market and regulations are different for private equity shares then for the kinds of stocks you're used to!  So watch out! This stuff is risky.  

Finance for a Better World

With the growing Occupy Wall Street movement, the Oscar winning documentary, Inside Job, and the continual news about financial failure all over the world, it seems that the finance, banking and investment industry has been taken over by a wild-eyed group who can’t see beyond the dollars piling up in front of them. Yes, since the Federal government began deregulating in the early 1980’s, many people in the financial industry have been making themselves very wealthy by exploiting new ways to pump money out of others while damaging the businesses and lives of the rest of the global economy. And alternative institutions to provide sustainable finance are growing and new innovations in sustainable finance are being developed.

Sustainable finance supports people and places.  

 

Two books, David Korten’s Agenda for a New Economy, and Bill Mckibben’s Deep Economy, show what sustainable finance looks like.  Sustainable Finance creates real value, making people and communities stronger, healthier and more beautiful without depleting non-renewable resources or destroying ecosystems. 

Existing alternative financial institutions include credit unions, non-profits that forego speculative investing on Wall Street for investing locally.  As people become aware of what has been going on in the Wall Street financial system, they are moving their money out of the four large banks and into credit unions – even churches, municipalities and PTA’s!

The Global Alliance for Banking on Values is creating a network of banks that share the value of “using money as a tool for enhancing the quality of life through human, social, cultural and environmental development.” (gabv.org) This consortium of banks from all over the world are working to re-invent finance to be something life-enhancing.

Slow Money is bringing people together to redefine investment – fostering financial institutions that are connected to people and places, and is “fixing our economy from the group up… starting with food!”

Another development is crowdsourcing, where small individual contributions from huge virtual crowds accumulate into the financial support for business creation.    Kickstarter and Kiva are two popular crowd-funding web platforms benefitting small business and individuals all over the world.  On these websites we can give money to people and contribute to ventures we find worthwhile.

At BGI, I’m working with a team of students whose purpose is to empower people to invest in each other.  We’re working on creating a model local investment market making it possible for each of us to invest our money in people and places we care about. Many Americans have retirement savings in 401-Ks or similar savings instruments.  The idea is to put your investment dollars into people you know about, who are making your community and your world a better place.  Your retirement savings could finance the kinds of small businesses you believe in. 

This blog entry first appeared on the BGI.edu blog on October 27, 2011. 

Dream of the Week

I've been reading the blog of a friend, Dream of the Week, http://thedreamoftheweek.blogspot.com/.  It talks about the dreams we dream, some of them find the support of synchronicity and others turn out less well.  I recommend the blog; it makes me feel good about dreaming big!

So my dream, my big audacious hairy dream, is that we change the whole way the economy works.  And WE do it!  Not the pundits, the politicians and the policy wonks but WE the people change the whole economy.  Because we can!  In fact, we're already doing it.

With Occupy Wall Street:

Photo Credit: Atomische * Tom Geibel

And through "We are the 99%"

Photo Credit: wearethe99%.tumblr.com

By moving our money

Photo Credit: wisaflcio

And we're spending what we have in support of a new economy-- one that makes our communities stronger and our earth healthier.

By shopping at Farmer's Markets:

Photo Credit: Justin Sewell

By shopping in local businesses

Photo Credit: NNECAPA Photo Library

By investing in what we believe in

According to John Gerzema, author of Spend Shift and chief insights officer of Young & Rubicam (a marketing company), over 55% of consumers are favoring companies they believe have strong social values.

It is OUR MONEY!  Our spending is our power.  Pay attention and use your dollars well.  Spend them in your community with people and organizations you care about.  Lots of us are doing this already-- Join me and the other Spend Shifters!  We are changing the world.