Slow Money
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Inquiries into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered
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Once upon a time, investing in the stock market meant choosing a company you thought would do well in the world of commerce and then putting some of your own money into the game.
If the company you chose and its product or service did well, the value of that company's stock went up and you made money. If that company's product or service did poorly, the value of the stock dropped and you lost money.
"Buy low, sell high," was the standard formula for success when it came to investing.
The idea was to pick stock in a company that was on the cusp of a rebound or just starting out and had good prospects for success, and then buy the stock before it went up in value.
Then, you would sell that same stock when it appreciated to a certain level, before it dropped in value again. By paying attention to market trends and making good decisions about when to buy and when to sell, the win/win proposition was this:
You put capital into your community by buying stock, thus helping to create jobs and spur innovation and new products, and in return, you got to participate in the company's success by sharing a portion of the profits in the form of stock dividends.
That's how it worked for much of the 20th century, when the United States was still a manufacturing powerhouse and before globalization complicated an already complex market.
But over the course of the past 25 years the U.S. has hemorrhaged industrial jobs and has come to rely increasingly on financial products to generate profit: mortgages, loans, personal and commercial credit, and more and more complex forms of securitized investment instruments.
Not only does the money you invest not stay in your own community anymore, it may even harm your community. (Ask Cleveland or Detroit or Las Vegas about the local impact of the highly-profitable spate of mortgage securitization.)
Mergers and acquisitions have become the art of generating profit on paper without any value added, and have less and less to do with making a company stronger or more responsive to consumers. M & A tactics have become essential parts of every corporate balance sheet; an accounting sleight of hand.
Stockholders have come to demand double digit returns instead of hope for them, and the pressure to show huge profits no matter where they come from has become all-consuming for most major corporations.
Today's stock market has become so complex and fast-moving that even the tiny agencies charged with regulating it don't understand half of what goes on or how it works. Huge brokerage houses now use expensive computers designed to make sure their trades are accomplished milliseconds before their competition, thus giving them an edge that has little to do with actual market forces.
In essence, money has become so fast, so much faster than fast, that many people now feel that today's stock market has come completely unmoored from any kind of material reality in terms of goods, services, and value added. What's more, this disconnect is doing enormous damage to the world and to its people while enriching only a tiny few.
That's where Woody Tasch and the concept of slow money comes in.
What if the money you invested stayed within 50 miles of where you currently live and was committed to local merchants and growers who put at least 50% of their profits back into the community? What if, instead of making a double digit return on a fast money transaction that exploited third world villagers and pumped up corporate profits artificially, you could get a steady 2-3% return on money that dramatically improved the quality of life in your own neighborhood?
Which would you choose?
Lots of people would choose the high return and damn the consequences, but more and more people are looking for ways to add value, not just generate profit. That's the basic idea behind the slow money movement: value added, sustainable growth, responsibility to a local community.
Tasch doesn't intend that slow money will replace the stock market of today. Of course that is untenable. Instead, slow money is an option, a both/and idea whose time has come.
In other words, we might not be able to fix Wall Street. But those of us who want to can decide to just do something else, something more positive.
The Principles of Slow Money
Slow money is a movement and an idea based on six founding principles:
- Money has become disconnected and must be brought back to earth.
- Money can be too fast, companies can be too big, finance can be too complex. We must slow money down--not all of it, but enough of it to matter.
- The 20th Century, the era of Buy Low/Sell High and Wealth
Now/Philanthropy Later, has transferred enormous amounts of wealth into the hands of few and put little back. The 21st Century will be the
era of nurture capital, built around principles of carrying capacity,
care of the commons, sense of place and non-violence.
- We must begin to invest money as if food, farms, and fertility mattered and connect investors directly to the communities in which they live. We must forge new. more intimate relationships between investment capital and local people.
- "Making a killing" must be changed to "making a living." We must celebrate new entrepreneurs, investors, and customers who share sustainable values.
- Paul Newman said, "I just happen to think that in life we need to be a little like the farmer who puts back into the soil what he takes out." Recognizing the wisdom of these words, let us begin rebuilding our economy from the ground up, asking:
- What would the world be like if we invested 50% of our assets within 50 miles of where we live?
- What if there were a new generation of companies that gave away 50% of their profits?
- What if there were 50% more organic matter in our soil 50 years from now?
You can learn more about the Slow Money movement by reading Woody Tasch's book, Inquiries into the Nature of Slow Money, or by exploring the Slow Money website at:
http://www.slowmoneyalliance.org/
More and more I think the financial system we have in place right now is somewhat like cancer in its final stages. I doubt it can be fixed, and it probably can't be salvaged either. Focusing on it is almost unbearably depressing.
But it is encouraging to know that slowly but surely, other people are doing other things.
May they take root and prosper.
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This is very inspiring and wise financial logic... your ideas certainly build the new, better world, Pam! Thank you for this article.
Hi Scott.Life and Tatjana--I heard this guy on NPR and looked him up. I liked what he had to say and I especially liked that he kept his ideas modest and focused. He's not saying, hey, this will save the world. He's just saying, some of us are tired of Wall Street and would like to grow something a little closer to home. It's an option and an alternative, not a replacement.
I do think think though that what will happen in the long run here is that there will be a sort of breakdown, at least in the U.S., and people will forge more local connections and more sustainable communities that in some ways will be just beside the point. The big financial world will crank along as usual, but more and more people will just opt out because they have to. I know that's what has happened to me, and I see it happening to other people too.
Also look up "Catherine Austin Fitts" and her "Solari" website for her ideas on "empowering Main Street instead of Wall Street".
But, before that can happen, the U.S. Federal Reserve banking cartel has to be destroyed, and real, honest money enabled. As it is, the corrupt U.S. government and the rapacious Fed squash anyone trying to implement and use real alternate money. For example, e-gold customer assets are being confiscated by the pigs (people in government "service") of Treasury, Fascist Homeland Security, and the IRS. See http://e-gold-exchange-news.blogspot.com/
Hi dabeaner--Thanks for the references. On an 'up' note, barter is taking off in a big way. I don't see a lot of hope for destroying the U.S. Federal Reserve banking cartel. I know a lot of people talk about that online, but it's not like we can all just get on a bus and pitch the bums out the window, or as if, if we did, things would get magically better overnight. I like to focus on what I can do, not on revolution--although that may change. Ask me again next month. Thanks for your comment. :)
Thumbs up Pam! I love Paul Newman for the fantastic things he did for the planet. I will take good old fashioned slow money any day! Let's be real and realize we all have to live somewhere and let's take care of our communities so they can care for us! I live in a small town and some companies here were started by entrepreneurs who made it very big, sold out, and then the company collapsed under new ownership, leaving people without jobs - so many people have bought into the idea that more and bigger is always more and better - but I believe small is beautiful! Kartika
I don't know if you did it consciously or subconsciously, but after you mention that quote by Paul Newman, you then followed it with a suggestion to give 50% of the profits that companies make to charity! Thanks exactly what Paul Newman did! I love his pasta sauces by the way, especially Vodka Sauce-Yum!
Although I like his idea, my suggestion would be to invest in mutual funds, which is really slow money ;)
Thanks for the fascinating article/hub, Pam!
I like this hub and these ideas so much. I wonder how to practically implement them. I'll have to get the book. Great hub, my friend, and thank you.
Thanks prgrundy for another intelligent, informative and timely article. Yes, it's time to pitch the computer driven programs that calculate hundreds of transactions per second, buying and selling in the wink of an eye, artificially distorting stock and inflating false profit. It is indeed time to stop gambling at the casino and go back to real work. I'm going to read this guy. His ideas go hand in hand with another I believe in -- smaller is the healthy future, not global.
what you say here is what is at the heart of what my son feels passionate about. I'm going to give him this.
Thank you again for an excellent idea, one whose time has come. This makes sense in a way that most of what I've read about economics never did. There seems to have been a continuing battle throughout history between complexity of ripoffs and legislation to prevent them, this is more of a complete change of direction.
One that rests on cultural factors as much as on the circulation of money and resources.
Change does come. I have seen enough of it in my lifetime to know that it does creak forward, in directions that make more sense to me and do improve my life.
One of the things I love about your Hubs is your knack of being able to write about money in ways that make it understandable and ethical -- bringing this up gives me a direction for something to do with it once I do sell pro novels and have something closer to a middle-class income. That disturbed me for many years, the thought that I could wind up wealthy enough that I couldn't keep track of it and would blindly wind up preying on people whose side I'd be on if I knew what was going on.
There's been some movement for some time for people to invest on conscience, to invest only in green opportunities (and try to filter out the fraudulent green claims, every corporation out there is trying to make itself look green whether it is or not) and other conscience choices. There are brokers who offer that service. But you still wind up with Madoffs, and I wonder how much of the scheme presented as clean, green, ethical investments.
This is something with more observable long term results.
Every time they scream for growth in the economy I'm left thinking -- that's unsustainable. You can't have indefinite growth in a living thing. Sooner or later instead something needs to reach a healthy balance where growth is slow but real, where homeostasis and balance are the main thing. Slow money more fits that idea.
I like this. If we can get inflation down to where a 2-3% gradual profit at least breaks even then life could get really good.
Thank you everyone. I like this idea too. I'm going to do more research and write more on it. It's kind of new to me too, but it sounds like something I could really get behind. Thank you for all you intelligent and supportive comments.
Pam,
I like the idea of making long term local investments. My own investments since 2000 have been local long term and personal. I've been pre-paying tuitions for my five grandchildren. Each of them has at least one year of tuition already paid. I can't think of anything more worthwhile in which to invest than the next generation.
Tom--That's wonderful! They are so lucky to have you for a grandfather. :)
You know, I don't think the principles of decency behind any kind of business and management have really gone away. It's just we've let the ego maniacal narcissists run the palace and stir up the loonies...and even worse, the ordinary working people into believing the emperor has shiny beautiful clothes and deserves $300,000 shower curtains. Essentially, those tiny people are acting against their own best interests and are angrily and gleefully ripping up 'socialists' instead of figuring the situation out.
Bargain hunting for undervalued assets I think will remain--but investing (believing in/managing)those assets I think is the key--a la Buffet. But then you know I think real estate is just simpler and easier to understand--you physically own something.
This Slow Money sounds a lot like the ideas behind Libertarian Socialism, incidentally.
Sounds like just my speed!
Seriously, another thought-provoking hub. It makes a lot of sense. Hopefully, not so much that it will be completely poo-pooed and tossed out as communist:-).
Pam: Thank you for writing about this! I will share this hub with Phil and a few friends who are pretty concious folks, and see what they have to say. I personally like it and will read more about it.
I love Paul Newman, always make sure I purchase a few of his products as his company donated/donates all profits to charity. He was quite a guy!
Very interesting hub. I think our world right now is creating too much pressure on all of us to generate money at the soonest possible time. It's getting to the point that a lot of people no longer think but just put down their money on the promise of huge returns (which is how scams are made), only to find out that the returns are not really there when they want them. And then the finger-pointing, blame game starts. Thanks for the hub Pam. Hope to read more in the future. :)
Hi Lita==Well, the part about focusing on small local businesses sounds like Libertarianism, but not the part about giving 50% of your profits to local charities or focusing on socially responsible and ecologically sound business practice. Investing is not what it used to be. Even money market funds are not the safe vehicles they once were considered. I do agree that it's because the loonies are now in charge of the asylum though. Thanks for your thoughts.
Mighty Mom--It does have that commie ring to it, doesn't it? lol!
Violet Sun--Thanks for stopping by. I'd like to know more about it myself and will continue to look into it. For instance, since I don't have 10K to plop down on anything, I'm interested in how to find businesses that are funded this way so i can frequent them.
emievil--I agree. Generating profit has become so all-consuming that actually providing a product or service to generate profit has became an annoying afterthought or a bit of corporate history. It's so damaging.
Excellent article, thanks! Sometimes we get so caught up in "fast money," it's easy to overlook "slow money"!
Brilliant hub, upbeat without being Polly Anna. Slow money sounds like a plan. I will read more on this,community spirit and investment is not communist, its humanist!
Thanks Erika and Kathryn! I think there's nothing wrong with business having a conscience. Somehow we've drifted away from that. There are lots of things that are profitable, but that doesn't make them worth doing. Thanks for your comments!
Wow....I like this concept. I'm an ex investment banker and in my hay day I would go home disappointed if I hadn't made $5 million at least during the day. Now I am wiser and more sedate and write hubs for a living. I like the concept and will like you investigate more. Thanks for the hub.
Hi one2get2no--I like it too. When I lost my retail banking job (as a CSR in a big regional call center) I had a $1 million sales threshold before I made any incentive pay (commission). I made $10 an hour but if I didn't make any incentive over that, I was facing being fired. The last two months I made no incentive--it was right after Lehman Brothers failed and our stock was at $1.73 per share.
I was in CUSTOMER SERVICE! lol! Most of the calls I got were from people who were overdrawn and mad about hundreds in NSF fees they'd discovered, and I had to sell one million dollars worth of bank products during these 2 minute calls in order to not get fired. I really, really hated it a lot. When I first went on the floor there the threshold was $100K and a year and half later it was up to one million. I think the janitor had a sales threshold.
God I hated that job. It literally made me sick. I never want to work for another bank. I'll shovel poo before I do that again. Now I"m doing what you're doing, writing online. Thanks for stopping by. :)
Very interesting ideas. The constant demand for growth has always struck me as self defeating and profitable for only a few. I like the idea of slow money. Hell it's always been so slow coming to me I should be an expert :).This demands further research, although my initial reaction in today's world is that local investment may have to be redefined. The sort of investment that only looks 50 miles may well lead to the kind of protectionism that encourages the incompetence that has lead to the recent financial woes of Wall Street. The bankers have only looked at protecting profit and growth and it is leading to their demise. We need a globally sustainable economy and this might be one of ways that we can achieve it.
Hi Cally2--Good points! I confess I don't know how I would personally get involved in this beyond shopping at businesses that participated--which I already try to do. Like you, money has always been pretty slow coming in to my life too! Even so, I like the idea. Sustainable friendlier communities is something I can really get behind.
Pam, excellent hub.
Thanks Disturbia. :)
Nice hub you are very right about stock market and our money investment. Good keep writing!!!!
Hi Pam! First time I hear about slow money, I positively feel for the idea. What resonates with me is not the "slowness" but the concept of coming back to adding value, the concept of investing against something that produces not thin air or speculation but goods or services that mean something. I'm reminded of a couple of articles you wrote on gold/money/paper and the fact that nowadays money is just that, paper, without any value to it whatsoever. The principle of slow money seems to aim at going back to the roots, I hope it takes hold where it matters -- the community.
Psssst... psssst! Nobody has called you a commie yet! Ain't that progress! Laugh!
Hi Pam, 'slow money' seems to have a lot in common with LETS schemes and local currencies like the Lewes Pound, Ithaca Hours and Berkshares. The Lewes Pound is used by the independant traders in Lewes (a small Sussex town close to Brighton) as a means to keep money local, and was introduced as part of their Transition Town scheme. It's been up and running for a while now and seems to be quite successful and popular.
I wonder if this might be the future. Communities gradually abandoning the old financial system and setting up more meaningful alternatives for use amongst themselves?
Hi Vizey--Thanks!
Elena--I like that about it too. And you're right! Nobody HAS called me a commie today yet! I must be off my game! lol!
Amanda--I was think about your hub on Transition Towns when I heard this guy on the radio! He never mentioned that by name, but it does seem to have a lot of similarities. It seems to me it could be part of the future. I wonder if we will end up with two tiers of society--locals and global/corporate folks. That would be weird but I think it's possible.
I really like this. A few of the points I've been discussing with my husband. It is so sad the state we have brought ourselves to. Getting back to the basics is so important to us all.
What Amanda is describing is exactly what made the american colonies so prosperous during Francklin's time. That is, until the crown got wind of it and declared it illegal. It was a deadly threat to the usurious practices of the central bank. I think, if communities attempt it here, they'll find themselves in a pitched battle with the fed, our modern day central bank of usury.
Brilliant hub. I've always been interested in the stock market but figured I was to small time to ever get int it. On the other hand this seems more my speed and I think I need to figure out if I can tease into this.
Hi RGraf, CWB, and Gemsong. I appreciate all of your thoughts. Personally I'd like to see this catch on. Thanks for coming by.
lol I keep getting this, but Libertarian Socialism IS an actual philosophy, combining both aspects (and a bit more) of what Americans actually believe Libertarianism and Socialism to be. It is only in America that Libertarianism got all hooked up with capitalism and quote, quote, conservatives and making that huge nasty buck via exploitation. The truth is, as a philosophy (and one proponent of this is Noam Chomksy) Libertarianism suggests the most creative freedom for all people...and to ensure that, of course you have to address vast economic inequalities (hence the emphasis on Socialism, too). I could go on, but Chomsky explains it better... Words (in America especially) get denigrated a lot and take on their own negative connotative meaning, and he's a linguist, lol.
And it is true, Time magazine has recently suggested everyone abandon their 401k's. I did a while back...had to, haha.
Hey Lita--I like Noam Chomsky. I didn't know his politics were called Libertarian Socialism. I learned something from you today, thanks! Seriously, I thought you were talking about the Ayn Rand Ron Paul brand, which I'm not so crazy about. It certainly gets confusing and it doesn't help that all these labels come with such insane emotional baggage. Bernie Sanders calls himself a Democratic Socialist and I like him too.
I do see though how this kind of combines the best of Libertarianism and the best of Socialism so it makes sense--although I don't think Libertarians as they present themselves on Hub Pages would like it much. I don't have a 401k anymore either. I'm not sorry. The time when that was a good idea is long gone I'm afraid. :)
Pam, just a note for CWB. LETS schemes are already up and running in America, and so far the big boys have let them be, though maybe that will change in as they become more widespread. Ithaca Hours is a particularly successful example, and here's the link:
I wonder how many schemes need to be up and running before the major banks consider they have real competition? I hope we get to find out!
Thanks Amanda. I wasn't aware of these movements. It's a very positive sign. I don't know how long it will take the fed to go after them but I can't imagine they won't.
Very good hub.
It is something that we should consider seriously, to stop this boom & bust pattern of our current economic cycle.
Hi Pam. I just joined hub and landed here for more material for my blog on Deep Conscious Capitalism. My approach is to educate and enlighten people about the blindspots of current unsustainable system and possibilities open now for a mindful joyful revolution. I heard about the slow money. Now I know. I am contemplating some online learning and listening classes. Thanks so much!
I have good days in the market, and bad days...and worse days...but we have to hold on for it to stabilize.
Another great Hub. Like alot of the idea's presented. I have felt for a long time that 401K's and other complicated financial vehichles are NOT for the average Joe. The average Joe can not sustain the short term instabilities of today's market. Unfortunately the viable pension plans went away with the manufacturing industry.
Ineteresting peice. I'm baffled by how it all works.
Thanks everyone!
CJ--I feel the same way about 401ks. I've seen them almost disappear overnight. Most people never even review their investments. My last job, they would automatically put your contribution in company stock and you had to go in and move it to a mutual fund or it would stay there. Almost no one did that. The company failed. When I left the stock was worth $1.53 a share and my 401k had lost 60% of its value, even though I did go in and try to adjust it and keep it out of the company stock. It was pretty complicated and you were only allowed to invest 10% of your contributions in the most conservative fund. I think IRAs are slightly safer, but even there, you'd want a CD IRA, not a mutual fund IRA.
It was really just a way for Wall Street to steal the little bit that passes for a pension these days. Really, money is a mess right now. I guess it's lucky I don't have any.
really nice and informative hub. would like to read and know more about it.
I had heard a little blurb about the subject, but you have brought the concept to light for me and others. I'm going to do some further investigation. Thanks.
I used to put all of my money in the stock market but now that has changed. Now I only put some in and the rest I am using to buy the land around my ranch to make it larger and putting trees and animals on it that will make me money.
Pam, this was such a thought provoking hub (as yours always are). Our economy has just gone crazy. Capitalism is dead in the US and the manic money frenzy will be the ruination of us all. The slow money concept sounds so idealistic and sensible. Unfortunately, money is power and the powerful have all the money. Hopefully, we'll see some kind of turn around in the near future.
Hi Dolores--I feel like you do, that the economy has lost its mind or something. I don't know if things can turn around but I hope so! I like this guy anyway. Thanks for stopping by. :)
People LOVE fast money because it makes them feel good. Slow money actually takes time to earn. Earlier in time, there wasn't a way to make fast money. That's a modern day thing, and it seems to be wreaking havoc on our economy.
We live in an "instant" world and it is not surprising that this has gotten to money. Instant money...instant profits...these are the norms. The idea of slow money is refreshing and I believe this idea had been applied to food too and I think it is called The Slow Food movement if I am not mistaken.
Joined your fan group now, very good read. thanks
Hi everyone,
Thanks for your comments! Yes Slow Money did grow out of the Slow Food movement. We try to buy local food as much as we can. It's better tasting and healthier but it also keeps money in the local economy instead of in some CEOs pocket. :)
nice, well thought out hub!
I think money is the root of a lot of problems we are having today. Well maybe not money itself, but our relationship with it. There is this underlying thirst for more where more is often not needed. Consumerism is like a cancer- it eats everything in its path.
Money is good for trading life value- its simply another form of energy. I work, may energy from the work gets transformed into money, so now I can take that money and aquire necessities and other things like that.
Its when we believe the lie that we are not good enough as we are that this insatiable hunger comes about and we literally consume ourselves.
Great hub! Rated 'up'
:)
oooooooops..
hooked from the begging, very imformative, thx
I find this to be a thoughtful, intelligent and non-partisan way to go about fixing our problems.
So much so that it makes committed Democrat and Republican talking heads look hopelessly outdated.
Nice piece of writing, thanks.
Thank you for the information, very useful!
Thanks Michael and Joe. :)
Very wise words. Funnily I watched a documentary on Warren buffet just the other night and his sentiment as an investor definitly resounds with what you are saying. Thanks for the informative hub! Check out my hubs, Im relativly new to hubbing.. three hours infact. Any input would be appreciated
Thanks!
Scott.Life says:
3 weeks ago
I like this idea, think I'll investigate it a little further myself. Thanks for the article.