Jun 24, 2020
The big idea: Americans agree on very little these days. But as local economies flatline and unemployment figures rival those of the Great Depression, red-state conservatives and blue-state progressives can agree on one critical point: Wall Street can no longer be trusted.
According to the Federal Reserve, Americans have $56.5 trillion locked away in Wall Street’s stocks, bonds, pension funds, and more. Yet Main Street—not Wall Street—is what powers 60 to 80 percent of the U.S. economy. These local businesses generate two to four times more jobs than Wall Street’s lauded corporate behemoths. They spend more of their money locally, pay local taxes, hire local people, and create far-reaching social returns for your community.
In a well-functioning investment marketplace, 60 to 80 percent of your money should be supporting 60 to 80 percent of the economy. Today, almost none is.
The key message: “We’ve been conditioned to funnel our retirement savings into the stocks and bonds of Fortune 500 companies, all but ignoring local businesses that are highly competitive and profitable,” explains economist and local-economy advocate Michael H. Shuman.
His solution? Help Americans shift that $56.5 trillion into local businesses, projects, and people.
In his timely new book, Put Your Money Where Your Life Is: How to Invest Locally Using Self-Directed IRAs and Solo 401(k)s (Berrett-Koehler Publishers; June 2, 2020), Shuman shares: