I think about things like “what do I owe to whom?” all the time. This is very broad and potentially political, so maybe we focus on our own local spending and investing, which should hopefully keep us out of trouble. I am also interested in rust-belt dynamics as well, so whatever you want to say about that.7Wannabe5 wrote: ↑Tue Aug 22, 2023 7:45 amExactly. It abstracts away the extent to which you have to be at least a bit of a competitive asshole to survive in a Capitalist economy. Just like living in a highly developed nation-state with high-tech military abstracts away your need to show up for monthly meetings of your local militia.
Therefore, I think it's almost certainly "better" to either invest in local businesses OR fully acknowledge the extent to which you are likely benefiting from the arbitrary laws (positive feedback loops that help the big get bigger) that currently support the monopolistic market dominance of mega-corporations. IOW, economy of scale for production is a highly dubious justification these days when most actual work is sub-sub-sub-contracted out and the rust-belt is going on 40 years vacated. It's pretty much all about power, organization, lawyers, ass-holery and the mythology that the finance sector is simply the servant of the economy as a whole.
It's much riskier to go out there on your own, but clipping dividend coupons used to be known as an activity only fit for old widow ladies.
ETA: I'm mostly talking to myself here, not you guys. Carry on.
Skipping how we ended up there, years ago DW and I went on a “spend local” kick. I bought only local beer, and we (mostly) only ate out at local restaurants. We went to the farmer’s market some, tried to shop at the in-state grocery store, and bought a laptop at the local computer store. What I’ve been trying to sort out for a while is resolving this desire to support local businesses with the low-spending ethics of ERE.
Sometimes the (many admittedly non-ERE) decisions are quality ones and are easier. We’d rather see the movies that are playing at the local art-house cinema than at the megaplex, and the food at the local restaurants is way better than at the chain places. Prices are similar.
Other times, though, the difference in what I’m getting is not obvious. I can pay $2 more for spray paint at the locally owned Ace Hardware, but in the end it’s the same as the can bought at Home Depot. That’s only a couple bucks, but the laptop was quite a bit more than the base model available at Best Buy. Multiplied across all purchases, however, this adds up to 1) more money needed for FI, due to both sides of the equation, and 2) more money flying around in the economy available for others to also do destructive things, like buying and using spray paint.
Anymore, I fall more to the spend-less side of things. I shop for the cheapest groceries. I very rarely go to the movies. However, I’d love to hear the arguments for spending more to buy local from someone familiar with ERE, since I figured the unspoken assumption in the “buy local” movement is that more money flying around in the [local] economy is good.
Moving to the investing side, I also looked into investing locally when we were on the “buy local” kick. Well, I read one book, Local Dollars, Local Sense. While most of the specifics escape me now, what I recall was thinking that most of the things in the book required a lot of hoop jumping and offered a very reduced return compared to standard options.
I suppose I could invest very directly and locally by buying a local business, and those tend to be cheaper (but riskier) than stocks. I can buy YUM at a price/cash flow of about 23, with Seeking Alpha telling me the sector median is about 9. Looking at local listings, the price/cash flow of local restaurants for sale by me seem to be between 1.5 and 5. What isn’t immediately clear with the listings is how involved the owner is, in other words would I just be buying a job.
Some years ago Arizona passed a law allowing individuals to invest up to $10,000 in an Arizona business without being an accredited investor. I think the first company to try to take advantage of the new crowdfunding law was a local brewery. I went to their investor’s meeting, and decided to pass on the opportunity because I wasn’t convinced of their value proposition. They closed up shop earlier this year.
I’d love to hear suggestions on how to invest locally without it being something of a charity case-–taking paltry returns and/or high risk because “local”. The only thing that has made sense for us was banking at a local credit union.