Investing locally?

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Dwig's picture
Dwig
Status: Silver Member (Offline)
Joined: Mar 4 2009
Posts: 141
Investing locally?

In "Don't Be Fooled: Inflation Has The Upper Hand (Part II)", Chris writes, referring to the predicament of current investing, "It is devilishly tricky to figure out what to do and so I have adopted simplistic approach.  I will hold precious metals for as long as the monetary and fiscal policies of the US seem imprudent and/or reckless.".

I'm wondering if there might not be another alternative, one that is more in line with what investing used to be like.  This would be a strategy of investing locally in the economy of the town, city, and/or surrounding countryside.  The idea would be to put one's money to work creating value by assisting the process of relocalization promoted by folks like Michael Schuman.  The payoff would come from the local economy's resilience.

My problem at this point is a lack of understanding of how this might work in practice.  What exactly should I do with a given number of dollars?  How would I go about finding an investment that's likely to pay off?  If the payback won't be in dollars, what valuable return can I expect?

I'm hoping that some in this community have some ideas, or even better, experience in this area.  (Or at least, can give good reasons why it's not a viable investment strategy.)

horstfam's picture
horstfam
Status: Bronze Member (Offline)
Joined: Sep 6 2008
Posts: 71
It's all about the land

Hi, Dwig,

It's a great idea. Go buy a piece of farm land located near you now. Arrange to "rent" the land to an organic grower and let them begin immediately to "grow the soil". As harvests become mature, you can take "rent" payments in the form of healthy food. When the collapse begins, you can help several other families survive, and once the collapse is complete, you can actually move onto the farm yourself.

I recently heard an investment advisor tell his clients to buy farm land as that is the safest, best long-term investment. We all know food is the real silver and gold- and a lot easier on the teeth.

Keep us posted as to what you end up doing.

 

 

aggrivated's picture
aggrivated
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 527
Re: Investing locally?

In comment to your question on local investing I would point you in the direction of Catherine Austin Fitts.  She is an advisor of very similar persuasion as Christ Martenson(a friendly competitor if you will), but with a particular interest in local investing.  She was an upper level (under secretary or US equivalent) in the Dept of Housing, Education and Welfare and saw first hand how national moneies robbed local communities of autonomy and successful investing.  From there she set about working with various ideas to encourage local investing, especially at the small town level.

Her site is   http://solari.com/blog/

 

I agree with Horstfam on the farm land. This will take some research to find a willing grower and the land.  Depending on what you are using as your investment vehicle, you might be able to use a 'self directed IRA' and set this up as a business.  Another way this is used is for purchasing local housing and being a landlord with rental housing properties. There arestrings attached rules, but it allows you to invest an IRA without paying early withdrawal penalties and income taxes.  This will all take some legal and tax advice, but read up on the idea as a way to use an IRA if you have one.

Nate's picture
Nate
Status: Platinum Member (Offline)
Joined: May 5 2009
Posts: 573
Re: It's all about the land

Six months ago a friend was going to purchase Iowa farmland.  He put in a bid for $7200 an acre (class II soils - good but not the best).  He was shocked when it went for $8000/acre.  About 1 month ago James Grant spoke about the Iowa farmland going for up to $9000/acre. He said cash rents are at a 40 year low and farmland is at at an all-time high and that farmland was clearly in a bubble.   And last week a WSJ editorial mentioned some Iowa farmland going for $9800/acre.  The editor also thinks farmland is in a bubble.

Hate to say it, but I think it is different this time.  The chances of society coming unglued in the next few years (months?) are so high that buying expensive farmland now (or expensive PM's) may soon look like a brilliant move in the near future.

horstfam's comment on growing the soil is key to buying ag land.  Common ag chemicals and soil ammendments will not be readily available in the future. Healthy soil is the gift that keeps giving.

osb272646's picture
osb272646
Status: Silver Member (Offline)
Joined: Mar 14 2010
Posts: 120
Re: Investing locally?

Dwig;  You have posted an excellent question.  For the last year or so, I have also been contemplating how to find local investing opportunities.  The satisfaction of making my own community more self sufficient and resilient is so attractive to me.   At the same time, I don't have deep pockets to be in the situation of just giving money away.  I need to get a return, and can't afford to make a lot of mistakes. 

I spent the last 9 months surveying local opportunities and didn't come up with much.  Most involved retail and importing junk from China to sell to the local community.  Not much resiliency there.  I would like to buy some land and get a young couple to partner in organics.  That's something that is on the growth curve around our part of the country.  Can't find anyone who wants to take the risk, or do the work.

 Now, I'm starting to suspect that I am trying to do this on the cheap.  To be successful at finding investing opportunities on the local level requires much more legwork than I had been willing to devote.  In order to move forward will require much more involvement with community organizations, whether that be the Chamber of Commerce, the Church, or some other community entity.  But I want to do this without getting sucked into the "Good Ol Boy network" which might involve corner cutting or unethical behaviour, so am proceeding very carefully.

This is a learning experience for me.  I have been content with the results of my stock market investing, which I have been doing on my own since I stopped working for a paycheck in 1998.  But it seems that a proportion of my money needs to be going into the local community, and that involves a lot more work than simply running some screeners, reading SEC reports and crunching numbers into a spreadsheet.  It is a committment I have yet to make.

This probably doesn't answer your question, but at least you know there are others like you who are trying to make headway into this.  This is as far as I've gotten in the past year or so.   There's a way and we will find it, eventually.

 

patrickhenry's picture
patrickhenry
Status: Bronze Member (Offline)
Joined: Mar 12 2009
Posts: 76
Re: Investing locally?

Dwig -here's a business model for city aquaponics (business spinoff of Growing Power in Milwaukee)...If you have the time, become the investor and manager.  If you don't have the time, find the manager and be the investor.

 

You can partner with them to start your own.

http://sweetwater-organic.com/blog/partner-with-us/

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