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Wednesday, September 27, 2017

Financial Resilience: Part 3 of 3

Resilience (noun): the capacity to recover quickly from difficulties; toughness.

In the previous two parts of this Series, I outlined various facets of Individual and Family financial resilience. This third and final installment will close the loop by illustrating how these households organize and interact to build Community Resilience.

At this point, the effects of globalization and financialization are apparent in many of the smaller and more rural communities. Over the course of the past century, capital has become evermore consolidated in cities through large financial institutions, major national corporations, and the effects of compounding interest.

As a result, local economies have become increasingly reflective of national economy. As evidenced during the financial crisis of 2008, a major market event can have a dramatic impact on even the smallest businesses.

What then can we do as individuals and families to help protect the communities in which we live?
In his book Local Dollars, Local Sense, Michael Shuman outlines three important rules to support the prosperity of a local economy:
  1. Maximize the percentage of jobs in your local community that exist in businesses that are locally owned. 
  2. Maximize the diversity of the businesses in your community, so that your economy is as self-reliant and as resilient as possible.
  3. Prioritize spreading and replicating local business models with outstanding labor and environmental practices.
The bottom line is that if we want a thriving community, we must help build one with our finances. Buying local products and produce, supporting local existing businesses, and encouraging community entrepreneurs can be marginally more expensive, but the benefits to the community cannot be ignored.

Being able to provide local sources of food, education, transportation, and manufacturing helps protect communities from national financial challenges.

Here are some resources on building a local, sustainable economy in Grand Rapids:
  1. Local Dollars, Local Sense by Michael Shuman
  2. Locavesting by Amy Cortes
  3. Slow Money by Woody Tashe
  4. Small is Beautiful by E.F. Schumacher
Geoffrey Sadek, CFP®

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.