Local Investing Resource Center Launches!
Local Investing Gains Nationwide Resource
An online “MBA” in local investing has just been launched at local-investing.com. The Local Investing Resource Center (LIRC), a project of CTA, was created by James Frazier, 40, a Wharton-educated financial advisor and former hedge-fund manager who now advises his clients on Sustainable, Responsible, and Impact (SRI) investments.
Since the Great Recession hit in 2008, a growing number of investors have been looking away from Wall Street to financial opportunities within their own communities. The result has not only been more diversified portfolios, but more resilient and closer-knit communities.
Without local investing, many businesses would not have survived the big banks pulling credit lines or weathered reduced tourism as families tightened budgets or dealt with unemployment.
But this resurgence of capital pouring into communities rather than commodities has grown by fits and starts with little clear guidance. The LIRC provides all the tools necessary to take local investing out of its Wild West infancy and grow it into a more mature choice for investors’ portfolios and entrepreneurs seeking funding.
“For the first time, the best practices learned by local investing pioneers around the country are available in a clear format designed to help others replicate successes and avoid failures,” says Frazier, who is speaking from personal experience as one of eight founding members of LION, the Local Investing Opportunities Network, whose members have invested over $3 million in small businesses and nonprofits in the area of Port Townsend, Washington, two hour’s drive outside Seattle.
The LIRC provides two tracks of study: for Investors and Community Leaders. (A course for Entrepreneurs will launch in 2015.) Each course requires no prior experience, bringing each student from novice to “ready to go.”
The courses include training on how to properly evaluate local investments (which is more hands-on than conventional investments, and requires getting to know business owners), starting local investing clubs and networks from the ground-up, organizing small business showcases, and many other elements unique to local investing and critical for success.
The LIRC makes 95% plus of its material available free to the public, but offers significant benefits for becoming a paid member, including access to members’ only downloadable content and forums and quarterly conference calls with experts in the field. Annual memberships are 100% tax-deductible and available now for just $5 per month, with discounts for groups. The LIRC also welcomes sponsors and donors of larger amounts to further build its curriculum and capacity.
While local investing has similar risks to traditional investing and should be one part of a balanced portfolio, benefits are more than monetary.
“You cannot do local investing from behind a computer screen. You have to go out into your community, meet people, and see the business from the inside. And it doesn't just stop when the check is written; local investors can become mentors to business owners. There are connections created, there are relationships built,” says Frazier.
And the economics of local investing create financial benefits beyond the businesses that directly receive the investments. Through what’s known as the Local Multiplier Effect, most of the money invested in local small businesses is re-spent on local wages and goods and services from other local businesses. This capital continues to cycle through the local economy, spreading prosperity broadly. Businesses are started and expanded, jobs are created, the local tax base is increased, and the whole community benefits.
“For people who are doing traditional investing, outside of the temporary high of making profits and spending them on experiences or stuff, you don't take away very much,” says Frazier. “But by investing locally, there are businesses in your community providing real goods and services to real people – and you are behind their story.”