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Krawczak: There’s more than one way to invest

October 8, 2012
The Alpena News

What comes to mind when I say "investing"? Do you get chills? Are you intrigued? Did your eyes just glaze over? Even though we all have different feelings about investing, there is a common reason to invest. We want our assets to work for us to create wealth. This is the bottom line whether we choose bonds, stocks, mutual funds, real estate, precious metals, or something else. This is also true whether we invest for retirement, education, or financial security. We invest our money because investing comes with greater return on investment than stashing our cash in a box in the closet, and a potentially greater return on investment than the common savings account.

Investing in your community works in a similar way. I was looking up the top tips for investing. There are many tips, but there were a few that came up often. The tips were intended for financial investments but they are certainly applicable to investing in your community as well.

The most common tip was to start early. The earlier you start investing, the smaller risks you have to take, and the greater your return is likely to be. I'm sure you've seen the charts that show the difference that just five or 10 years can make. Start investing early in your community as well. Small investments over time can sure add up to something huge. Volunteering an hour a month for 15 years is 180 hours. Start later in life and only volunteer an hour a month for five years? That's 120 fewer hours you can invest into improving your community. A lot can happen in 120 hours.

Another common tip was to be patient, or buy and hold. You aren't likely to see great returns right away, but if you practice patience you should be further ahead in the long run - even through economic ups and downs. Great things in the community don't happen overnight either. Be patient. Building great things doesn't happen immediately so stay the course and recognize small gains. If you choose to spend just $20 more each week locally, you won't notice a huge difference in the unemployment rate overnight. But if you are 50 years old, and made the commitment to this investment from the age of 25, you would have dumped an extra $26,000 into the local economy. If two dozen people made that investment, that's more than $624,000. Be patient with your investment into your community. Small steps can make a huge difference.

A third tip that came up quite a bit was to tune out the noise. Investing can be scary by itself. But add to it the environment, news, and the global economy and it can be paralyzing to the point of keeping us from acting. The same thing happens in the community. We hear rumors, see projects that don't work, and hear negativity. If we let them, those things can impact our desire to invest in our community. But ignore that noise. Remember the reason you started investing in the first place. Those who invest in their community understand the big picture. They understand they are improving their community one investment at a time and making it a better place to live, or to own a business. At the Chamber, if we let the noise stop us, we would get nothing done. Instead, we choose to continue to move forward.

If you look around your community, you can see many examples of what happens when people choose to invest in their community. You can see some higher risk investments with big payback, some lower risk, some investments that involved many people coming together and others that were made by individuals. There are examples that show an investment of time, others an investment of money, and some an investment of expertise. Sure there are times when an investment didn't yield the expected return on investment. But, just like investing your money, that's a chance you have to take.

What do you get if you don't invest your money at all? You save some money and earn a small amount of interest. What do you get if you choose to invest? A greater opportunity to create more wealth for yourself and your family. What does your community get if you choose not to invest in it? Status quo. A community where things are maintained but never really improved. What does your community get if you choose to invest in it? The opportunity to be great. The opportunity to grow.

Remember, we invest so our assets work for us and help us build wealth. Invest in your community so it will provide you with what you need now and in the future. The other option, just like with our cash, is minimal or no growth. With that being the choice, making the decision to invest in your community seems pretty easy, doesn't it?

Jackie Krawczak is the executive director of the Alpena Area Chamber of Commerce. Her column runs bi-weekly on Tuesdays.



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