For some reason, when I think of banks back in the “good ol-days” I think of the banks that bandits use to rob in the wild, wild west. And in that small frontier town, what is a bank? Well, it was a place where the community can store and pool their money so it can be loaned out to those who needed the capital. Simple really.
It’s not so simple today when banks are massive institutions dealing in a wide range of investments, loans, mortgages, and other financial instruments that most people do not understand. In becoming too big to fail, they’ve become so complex that they can’t accurately assess the value of the money they are investing… the same money that we have collectively deposited.
What if you decided that the interest you paid to banks didn’t serve the interest of the common good? Might there be a way to stop relying on large complex institutions vulnerable to critical mistakes?
Turns out Rob Sinclair from Conscious Brands came up with one way to do just that with his mortgage. In the following twenty minute presentation he explains how he developed an alternative financial arrangement where the interest payments would go back to his local community.
This may not be the solution for everyone. It also doesn’t guarantee that your interest payment to Uncle Joe is getting used any better. It does however remind us that banks don’t have the monopoly on money matters. While banks make it easy for us to not think about our money and where it goes, it also takes away our responsibility for what we choose to invest in.
I’m pondering diversifying my portfolio these days. What about credit unions? Or loaning a part of my RRSPs to local organic farmers? Or providing micro-loans to local businesses? Because I have this nagging question in my mind: if all of my money is invested in the global economic casino, maybe I should think about following my financial advisor’s advice and not put all of my eggs in one basket.