Big banks and the stock market aren’t the places for those of us who are looking to grow alternatives to the global corporate world that frankly has not been the best for the 99% of us. Global banks intend to make money for their investors no matter what the cost and they’re are not investing in local businesses in our communities. Many of the corporations in the big stock exchanges are investing in ecologically unsound practices that benefit the rich while undercutting the economies of the poor and middle classes. In both of these cases, they are cutting the link between the money people are putting in and the people receiving the money. Sure you can invest in specific companies and that may be a good idea if the company is a B corporation or engaging in social entrepreneurship. But for many big companies, lay-offs and cost cutting increase hardship for communities just to optimize profits for investors.
Putting our money into huge global banks is like feeding the machine that produced things like credit default swaps and sub-prime real estate loans with soaring rates. Why don’t we put money into independent local banks in our own towns? They invest in local businesses, make home loans and consumer loans to local people. These loans help to grow the local economy in areas like construction, car sales and other big-ticket items that are bought and maybe even produced locally. They also lend to small business in the community. This can help increase employment in the area and add to sales tax revenues.
In the Reno area, Heritage Bank, is our only locally owned bank and has been mentioned by Dave Asher as a good place for Renoites to put their money. I belong to a Nevada credit union which also keeps money in the state.
Bank deposits, even in local banks, don’t pay much interest on savings, but there are other ways of investing that don’t involve banks or stock markets. I’ve just been exploring peer-to-peer lending. I’m not a financial advisor or investor for that matter. I’m not recommending any investments, but I did find this company interesting. Lending Club is a lending community that has modernized the old style community loan clubs that used to exist in many ethnic communities in the US on a huge scale. You can actually pick who you are going to loan money to and/or the interest rate you are interested in. To me this sounds much more direct than putting your money in the bank and letting them invest it. Of course it’s not federally guaranteed so there is some risk but it looks like they have a pretty good rate of payment.
Research the banks in your area. Think about moving your money there. Let me know what you think about using your local banks and other alternative ways to invest money that doesn’t involve big banks or the big stock markets. I love your comments.