Local Dollars, Local Sense

Local Dollars, Local Sense: How to Shift Your Money From Wall Street to Main Street and Achieve Real Prosperity, Michael Shuman, Chelsea Green Publishing, 2012

A good way to achieve real prosperity in America is to invest money in local businesses, instead of the multi-national conglomerates of this world. This book shows some ways to do it.

First of all, forget about the usual method, that of buying shares in a local store. The vast majority of investors are "unaccredited," and for a local store to legally offer shares to the public requires an accountant, a lawyer, and several thousand dollars in expenses. A way around that is for the business owner to, for instance, offer a $100 gift card for sale to the public. The buyer then gets $125 in goods or services on that card. The business owner gets extra money coming in, and the customer gets something extra for their "investment."

The average Mega-Bank is getting less and less interested in approving a loan for someone who wants to start a business. They would much rather put their money in a higher-risk investment that offers a higher rate of return (credit default swaps, anyone?). Depositors should consider moving their money to a community bank or credit union, which is where loan-seekers should go for a loan. These are institutions where the head office is in your town, or a neighboring town, instead of a neighboring stsate. They will be much more interested in helping local businesses, and treating depositors and loan seekers as more than just a number.

Consider resurrecting regional stock exchanges, which would trade only companies from that state or region. Consider changing the SEC (Securities and Exchange Commission) rules, to make it easier for smaller companies to sell shares to the public, and make it easier for the average person to buy those shares. If you do nothing else, invest in yourself. Pay off your credit cards, pay down your mortgage as fast as possible, consider going (or going back) to school, to increase your available skills as much as possible, and consider a DIY retirement fund.

This will certainly change perceptions about finance. It is easy to read, and gives a number of ways to keep your money in your town (where it belongs).