I distinctly remember the look I received from our investment advisor assigned to my company’s 401k retirement plan. It was the annual plan review. I was eating a fantastic water buffalo burger at one of my favorite local restaurants in Gainesville, FL. He – let’s call him Mike – spent about 30 minutes talking through how the plan was diversified, how it was performing, and who was participating at various levels. (I should mention I had fiduciary responsibility for the plan as the CFO. Mike was a professional and wouldn’t just tell anyone that kind of information).

Then there was a noticeable and awkward shift in the conversation. I knew it was coming. At 29 years old with a promising career in finance, and not participating in the 401k plan, I was an easy target for a seasoned advisor like Mike. This is where “the look” came in. It was a mix of pitied surprise and personal mission that resembled a pat on the head. 

Mike started his very “selloquent” pitch on the value of compounding, the ease of target-date funds, the “free money” I was turning down, and so on. I engaged the conversation with a few analytical questions: shouldn’t this be adjusted for inflation? Shouldn’t that be adjusted for fees? What happens when (sorry… “if”) tax implications worsen over the next three decades?

What’s the point?

Mike was a good guy. I’d bet your retirement plan he probably still is. But there wasn’t a thought given to how I might be valuing the dollars I was not sending to Wall Street via a 401k. Instead, I just seemed uncharacteristically short-sighted and possibly irresponsible. Maybe I had a momentary lapse in judgment that a quick conversation could fix. This gets to the moral of the story: Value is personal.

“Value” has some generally accepted defining characteristics, and even some objective features. For example, an annual return on investment of 8% has greater monetary value than an ROI of 7%, everything else being equal. But that’s just it…everything else is never equal. When it comes to investing, the definition of value can be much richer than it gets credit for. 

A singular focus on “how much money can my money make for the level of risk I’m willing to incur?” is an injustice to a fuller definition of value. Investing in the stock market has an additional nuance: “how is my portfolio performing relative to the market?” If you want any choice in where your money is going, the odds will not be in your favor. If algorithms are not placing your money for you via an index fund, you have to be a statistical anomaly to break-even with the market. 95% of financial professionals can’t even do it.[1]  

Personal gain is one aspect of investing, and arguably an important one. However, it doesn’t have to be the only one, or even the most important one if you don’t want it to be. What if you want to know where your money is? Or who is running the company? Or what the money is being used for? What if you are interested in the mission of the company?

What if you want to invest close to home? In your own community?

Speculating and trading on Wall Street is not the only game in town. Actually, it is almost always far, far away from town. To be fair, that doesn’t inherently make it bad. But it has its limitations. If you are a retail investor,  your investment in any public company will ebb and flow on the decisions of the major institutional investors or even geopolitics.

So, what are other options if you want to try something different with some investing dollars?

Well, one is crowdinvesting. Crowdinvesting can be done via a registered intermediary – like Vicinity’s funding portal – to allow private companies and real estate projects to raise capital from anyone who wants to invest, even if you are not rich. We want investors to have access as stakeholders and lenders to businesses in your own backyards.

Investing is risky and there are no guarantees of financial returns. With any investment, know the risks and be able to afford losing your money. But investing closer to home also offers opportunities to personalize the value of your investment. Choose specific companies or local real estate projects that you believe in. Choose ventures you think will succeed. Interact with the real people that run the companies and want your support.

Invest where the business’s incentives are aligned with yours, and you both take the chance to help your community to thrive.


[1] https://www.aei.org/carpe-diem/more-evidence-that-its-very-hard-to-beat-the-market-over-time-95-of-financial-professionals-cant-do-it/