Locavesting (building wealth in communitites)
Locavesting is a merge of the two words ‘local and investing’, which means rather than invest on the stock market, entrepreneurs and investors pool money into local areas. This can be investing in local councils but more often is in the business world. Some examples would be to invest in:
- Locally-owned grocery stores
- Fair trade vegan restaurants
- Independent shops and bakeries
This not only will likely give you back your investment. But if it doesn’t (and all investment has risk), you’ve likely made the area you live in nicer anyway, for you and everyone around you.
It also keeps money within communities, rather than in the pockets of distant shareholders, who are likely destroying the planet.
A Few Inspiring Case Studies
- Community Wealth Builders is based in Baltimore, USA. It helps local businesses with crowdfunded, no-interest loans to succeed in an area that suffers from high unemployment.
- The Handmade Bakery (Yorkshire) is thriving, thanks to now-paid-off ‘bread bonds’. Instead of receiving money, investors received good bread in return! Today, it bakes thousands of loaves a week, supporting the local economy.
- Spacehive is a community fundraising site. These are ‘pots of money’ that can be raised for local shops and projects.
How Community Wealth Building Benefits the Area
Keeping wealth circulating locally offers real-life rewards:
- More Steady Jobs: Local businesses are more likely to hire from their own towns, offering steady work and fairer conditions than many chain outlets.
- Boosting Local Spending: People who work nearby tend to spend their wages in the area, which leads to healthier shops and services.
- Keeping Profits at Home: When local groups own their businesses, any profits stick around. This can fund new projects, fix park equipment, or bring fresh life to community events.
For example, a local indie shop not only employs local people, but the taxes go to your local council, not to some faraway place. The shopkeeper and staff likely use a local sandwich shop and pub for lunch, and the signwriter is also likely local (the big Tesco signs are not being made down the road, that’s for sure!)
The knock-on effect is a stronger sense of pride and teamwork, the sort that keeps parks busy, shops buzzing, and people looking out for each other.
Michael H Shuman is the author of the wonderful book Put Your Money Where Your Life Is. He says the issue is that millions of people with savings are limited to putting them into big companies and global corporations. He believes that in the future, these funds will instead be invested in local funds to build affordable housing (not destroying the countryside to do it), food and clean energy funds.
Credit Unions are also a good way to invest in communities. These member-owned banks lend your money to local people are affordable rates, only if they have a history of saving, to avoid debt. They can be used for home improvements to small business, instead of money going to global banks.
