I’m running an informal book club devoted to All the Money in the World here on the blog. You can join at anytime; there are links to past weeks’ discussions at the bottom of this post.
Chapter 9 is called “Another Way to Invest.” I knew that any book on money had to talk about “investing” in some way, shape or form, but I find most investment literature phenomenally boring. Yes, I’m the proud owner of a wide variety of index funds, and I’ve followed the Dow since I was a sixth grader reading the newspaper in a neighbor’s driveway in the morning while waiting for the school bus to come pick me up (I should have bought then, in 1990, instead of just reading!). But all that talk on cable finance shows about “stocks fell slightly in the morning due to investor fears of a euro area slowdown, but rose again in heavy trading in the afternoon due to minutes released from the Fed’s last meeting…?” It’s just noise.
So instead I looked at a different angle: how people could invest with the goal of creating a community they’d want to live in. I picture this as an economically vibrant community, with lots of firms offering fascinating things, and ideally customers getting to know proprietors and turning shopping into something less soulless that way. Thanks to the new crowdfunding bill that passed recently in the US, small investors are actually going to be able to invest in small businesses without being the founder’s brother (previous SEC rules required a high net worth for investing in pre IPO start-ups). This bill hadn’t been passed when I wrote the book, but I think it’s great. You can lose $10,000 (basically the max investment limit) in all kinds of ways that don’t do anyone any good. Investing in a small business just might help that business get going.
But even if you’re not interested in getting in on the equity side of a business, done right, spending one’s money can be an investment in creating a thriving community. Money is power, and how you spend it says a lot about your values. If you’re a free agent who wants a chic coffee shop in which to meet clients, you better be a good customer of anything that comes close in your town. You’re buying your coffee there daily, referring other people there, giving the owner advice in your expertise area if she wants it, etc. It’s nice to have places where everybody knows your name. If you think a family that recently immigrated to the US from Peru and opened a Latin fusion restaurant in your town is doing a great job, you should eat there more frequently then, say, McDonalds.
So this week’s question: how do you show your values through your shopping? Do you frequent certain establishments — and not frequent others — because of what you believe? Has this ever backfired on you? I tried to get pizza delivered from a locally-owned pizzeria recently and had a horrible experience. It reminded me that if all I really want is a mediocre hot pizza in 20 minutes, I should keep some frozen ones in my freezer. On the other hand, I’ve been trying to go to as many of Philadelphia’s great, unique restaurants as possible (Mica! Sbraga!) I’m thrilled to learn I have a cute little coffee shop within walking distance too. Guess where everyone now has to meet me for coffee…