How Can The Very Rich Best Help Their Communities As Well As Themselves?

The 1% as we’ve come to call those that hold the majority of our country’s wealth, are largely oblivious to the plight of the average American, but what if they weren’t?  What if they recognized that with 50% of American households living in poverty, they are at risk of losing half their wealth due to their assets becoming devalued?  Are the very rich aware that most Americans want a job, not a handout?  And that these same people, once gainfully employed, are the very reason the 1% ARE the 1% in the first place?  Really, the Average Jane and Joe want jobs, and safe and decent housing.  But who is interested in making that happen?

Today I passed a Missouri Lottery billboard, and both forms of the lottery, Powerball and whatever else we have here, had jackpots of over $100 million.  Of course, I see those numbers and start to wonder, “What would I do if I had that much money?”  I start listing all of the people in my family and in my community that would welcome a payout.  Then I imagine all the trouble money like that supposedly brings.  Most lottery winners file bankruptcy within 5 years of winning, if I remember correctly.  Why is that?  Just yesterday I was speaking with my friend Alan Shelton about that very thing.  I’d mentioned my disgust with the Kardashians and their vast money-making machines for doing absolutely nothing of value in our society, while everywhere I turn there are stories of real people with heart and abilities and good manners to boot, who are homeless and hungry or very nearly so.  The injustice of it all makes me ill. 

Alan’s response was thoughtful and measured as always, something to the effect of, “When you get to the level of money that the Kardashians are throwing around, Hollywood money, that money is just exchanged between people at that level.  It’s expected, it’s part of the dance.”  I hate that dance, then, but I get it.  If that’s the case, then this is why lottery winners often go broke:  There is a whole world of very wealthy people who know how very large sums of money are exchanged and moved around amongst themselves.  If you have the money but not the know-how, you’re going to spend and not invest, or give it to the people who will take it but not include you in the next round of exchange.  When you spend, that which goes out does not come back.  When you invest, you’re money not only comes back to you, it brings friends.

If this were true, then if I won the lottery and I wanted to make a difference with my winnings, I should invest in something that would create jobs and opportunities for people in my community, as well as brings me a return on my investment.  If my money keeps going out but coming back multiplied, even by a small margin, then I can continue to create opportunities for people, right?  This then begs a new set of questions:  What kind of company would I create?  I still don’t know the answer to that one.  Where would I create this company?  I don’t know that one, either, but it would probably be dependent on the answer to my first question.  My thoughts on this are to sit down with people who are smarter than I am in these areas, let them talk, ask tons of questions, listen to their answers, and then ask some more and so on until I feel I have an idea and a grasp of how to make it work.  Does anyone think Warren Buffett would throw in his two cents?  He would be the perfect go-to guy for this sort of brainstorming session.

Here are solutions I DID think of in the course of my musings:  I would build a community that lives and works in the same area.  The company must be ecologically responsible because it will be situated near the residential community where the employees will have the option of buying into at really low prices.  To accomplish the goal of a concentrated area of affordable housing near the company, I would sit down with developers and look for an area with a high number of foreclosures so that we can get a deal on enough homes at low enough prices, say an entire neighborhood in a bank’s foreclosure inventory.  Banks want to get these properties off their books which might make them more willing to deal, especially for a large cash offer.   This would make it possible to turn around and sell them to employees for a reasonable price.  A division of the company could hold the loan so that employees wouldn’t have to go through the hoops of being approved by a bank after they’ve been underemployed or unemployed for a time, etc.  The loans would be very low interest, taking the stress of paying the mortgage off of their shoulders, making it reasonable and manageable, and in theory it might make employees happier and more loyal to the company.

To increase the sense of community, part of the company’s mission statement would be “to give back or to take care of” in some way, each person at every level of the company.  Donations, volunteering, or just helping each other out as needed would be encouraged.  Ten percent of the company’s profits will be donated to causes deemed worthy, whether they are college scholarships for the employees’ kids, help in paying off catastrophic medical bills, or donating food to the local food bank, the money will be used in the most impactful and meaningful ways we can find at the time.

Community gardens, backyard gardens, local grocery store and gas station, coffee shop and bakery, movie theater, bookstore, walking paths and bike paths, efficient public transit, a library, everything a community needs in order to survive and thrive would be part of the development plan.  Once that smaller area is being developed and revitalized, and people flock there for jobs and housing, the shops will follow and the surrounding areas will also naturally transform, though perhaps more slowly, unless of course, the idea catches on.  It would need to remain open to the flow from outside of the community in order to remain relevant and healthy, and not become too insular.  Self-sufficiency is to be lauded and encouraged, but not to the exclusion of others.  Instead, the company and the community would more likely thrive if the idea of interdependency were illuminated alongside self-sufficiency.  To not be a burden is a wonderful thing, but to give and accept help as needed is to bring balance and fullness to one’s life.

Doesn’t it seem that if I can think of how I would use my imaginary lottery winnings to both benefit my community and profit personally, that those who already have that kind of money and know how to use it should be able to think of something similar? 

I can’t be alone in this line of thinking, but perhaps those of us who think this way are only be found in the 99% majority.  I hope not. 

I’m off to buy a lottery ticket.

How can the very rich help their communities as well as themselves?

America's Growing Trend: Opting Out and Becoming More Self-Sufficient

Currently, my interest revolves around the developing trend of “opting out”, the phrase I use to describe Americans growing distrust of those in charge of our economy, both macro and micro, to the point where they are looking for ways to not engage with them anymore.  When you were a kid, did you ever find yourself sitting opposite a friend, playing a game, when suddenly you realized they were cheating, or otherwise bending the rules to insure their victory?  How did you respond?  Some of us called the other kid on it, and we gave them a chance to come clean and compete in a fair manner.  Others got mad and punched him in the nose.  Some of us got up in disgust and walked away, whether we gave them a chance to make it right and they refused, or we just left right away.  The latter is what I see and hear now in terms of the average citizen’s response to our country’s financial system.  Those at the top have gamed the system to their own advantage, regardless of the cost to the rest of us.  Only a very small percentage of our population is winning at this game.  It is only a matter of time before they start to lose, though.  For the last several years I have asked out loud this question:  “Who do these people think is going to buy their products and services if they keep all this money to themselves?”  Only recently have I received an answer, from my friend Alan Shelton*, one of the most intelligent persons I have ever met.  His answer was essentially this:  “Eventually, the wealthiest Americans will realize that their assets are devalued by the inability of people to buy things.  Most of their net worth is not in cash but in their assets, so this will ultimately eliminate up to about half of their wealth.  Homes, yachts, bonds, all these things that they possess will have less value because the market will no longer bear the prices they had when money flowed.  When money stops flowing, it becomes stagnant.  They will eventually realize that they will have to pay taxes and in other ways put money back into the system if they want their assets to retain or regain their value.”  By the time the folks that occupy that strata of our economy realizes this, it will likely be too late to make amends with their customers and consumers.  The former middle class members will have already moved on to a more self-sufficient lifestyle, playing the economic game with those who know how and are willing to play fair.  There will be fewer people in the market place for what it is the very wealthy want to sell us.  Trust will be the new currency, I hear from time to time.  Bartering will be the way we get what we need, rather than an exchange of cash.  We are a resourceful people, and we will find ways to get around whatever barriers are erected before us.  I don’t foresee us going completely without cash anytime soon, but I do believe more people will opt out more often as fears of a deep recession languish.  

No one fully understands how our economy works, no one.  It is too large a machine with too many moving parts.  There are those who can guess at how A affects B better than others, but it’s still a crap shoot in terms of exactly what the outcome will be if say, Greece’s economy collapses, or Italy’s, or if any of the EU countries stop participating in the use of the Euro. 

However, I can tell you this:  Every day I hear from people all over who share their concerns about America’s economy and what they perceive as their tenuous foothold in it.  These people, everyday average working Americans, are looking at a future of not using money to get what they need, because they sense that in the not too distant future, they may not be able to win this game against those that designed it. 

Check in tomorrow to read the rest of my overview of the “opting out revolution”.

*Special thanks to my friend Alan E. Shelton, a philosopher and the West Coast's best financial guy turned corporate thought leader, for all the many and varied conversations over the course of our friendship.  It is due to his level of analysis and his ability to get to the heart of complex issues such as government, economies, and when to worry (almost never, he says, at least not about those two areas of life) as well as his crystal clear explanations of these complex issues that have led to the level of clarity on my part in understanding what's going on in the worlds of finance and government.  Any inaccuracies are my fault, not his.  Alan's first book, "Awakened Leadership:  Beyond Self-Mastery" is due to be released in May of 2012.  For more on Alan, check out his website:  www.alanshelton.com