TORONTO, ON – Canadians may not have to face some of the dangers others in the world are dealing with directly, but there’s still good reason to be nervous.
After all, Bernie Madoff drained the accounts of his Canadian holders – including some of our most prominent institutions. If the shenanigans at Jon Corzine’s MF Global or at PFGBest that defrauded customers of their assets didn’t hurt most of us, that’s only because we weren’t dealing with those firms.
There’s a growing perception that at least some of the international markets are rigged against ordinary investors.
With the recent mortgage rule changes introduced, real estate markets also look less enticing. What’s a Canadian with money to invest to do?
One idea that’s been popular in parts of the United States would make a lot of sense here: investing in your own community.
You could go to your local community association to meet some of your local merchants – their business improvement area group is usually tied in there – or you could do what was done in Prince Edward Island this year.
There, the crowd-funding website Kickstarter was used to fund several local projects on the island. Although Kickstarter amasses small investments from anywhere on the globe to any project you choose to apply your funds to on the planet, the locals here used it simply to handle the money.
Their mantra was “Islanders investing in Islanders” – and given that a Kickstarter investment can be very small, on the order of a few dollars, it’s a path open to children and those without much money just as much as those with hundreds of thousands to spend.
Why did the people leading this use Kickstarter? To deal with the investor laws that most of our provinces have: An entrepreneur looking for investors typically can only deal with “qualified investors” – people of proven high liquid net worth – unless they are personal friends or family members.
The value of investing locally isn’t just in having a better community. You’re able to keep an eye on things. (An angel investor I know – one of those high net worth types – won’t invest in anything, no matter how good, if it’s more than 30 minutes from his front door.)
If you’re worried about what’s happening in other countries, you can protect yourself and your assets by putting them to work where you live.
– Troy Media columnist Bruce A Stewart is a Toronto-based management consultant.