Your Backyard’s Acres of Diamonds starts here:
It’s time to invest money. You know it’s important. You know there’s value in finding good investment options.
But it’s your hard earned cash and you aren’t exactly sure where to begin. Before you search too far and come up empty handed, remember Russell Conwell’s (he established Temple University) story Acres of Diamonds which was first published in 1890. He delivered the speech over 6,000 times around the world.
The central idea in Acres of Diamonds is that one need not look too far for opportunity, achievement, or fortune—the resources to achieve all good things are present in one’s own community.
Here are selected quotes from his speech:
“I say that you ought to get rich, and it is your duty to get rich … The men who get rich may be the most honest men you find in the community. Let me say here clearly … ninety-eight out of one hundred of the rich men of America are honest. That is why they are rich. That is why they are trusted with money. That is why they carry on great enterprises and find plenty of people to work with them. It is because they are honest men. … I sympathize with the poor, but the number of poor who are to be sympathized with is very small. To sympathize with a man whom God has punished for his sins … is to do wrong. … Let us remember there is not a poor person in the United States who was not made poor by his own shortcomings…”
Fair enough, some of this could be a tad on the elitist side.
So let’s stick with what’s relevant for us in this day-and-age of Crowdfunding.
Acres of Diamonds is a story with a timeless moral of a man who dreamed of finding riches and unsuccessfully traveled the world in search of diamonds. Exhausted, broke and discouraged, he returned home only to discover that the diamonds he hunted were right under his nose— in a mine at the farm he had sold and left behind.
So why not look right in our own backyard for diamonds? Crowdfunding offers an extraordinary transparent platform to help inform the investor. One of the best and safest ways to go about investing is to invest in your own community via a crowdfunding portal.
Anyone who has lived in a specific area for an extended period of time is typically aware of what works and doesn’t work in their community, making them community experts.
Here are some helpful tips and questions you should ask yourself before investing in local business:
1. Trust your intuition:
If your instincts tell you to go for it then do so, if you have a bad feeling about a certain company to invest in, then perhaps find another company to research/invest in. When it comes to your community trust your gut. Conwell was optimistic about rich men being honest and carrying out great enterprises that put people to work. Regardless of our tarnished-by-Bernie-Madoff-era, trusting your gut instincts is rule number one. You’ll know!
2. Do your homework:
Where is the business located? Does the location of the business you want to invest in seem like an area where it will thrive within your community or is it in a less than optimal location? If the location and the business complement each other you can have confidence in putting your money in this business.
What demographic is the business targeting? If the demographic being targeted by your business meshes well with the demographics of your community you can feel more confident investing.
3. Follow the businesses money:
Where is the money coming in and where is the money going out? Follow the money flow. This will let you know how they turn a profit and if the business can be successful. If it seems like a potentially profitable business you can be more comfortable with your investment. Does the business make good sense? Does it fill a need or solve a problem?
4. Don’t invest more than you’re willing to lose:
If you aren’t investing more than you’re willing to lose you’re likely to have a much more positive experience with investing in a local business. By not investing more than you’re willing to lose makes it much easier to learn from your investments. Furthermore, it leaves you more experienced and more ready for the next business you decide to invest in.
5. Think locally:
As a member of your community, you’ve gained particular insights and familiarity with your community. You know how your community thinks, how your friends think, and how your neighbors think. Is this local business something you see thriving in your community and that you can see members of your community supporting? If it is then you can feel more comfortable investing in a business you’re confident members of your community will support.
6. Check the pulse:
Check the pulse of members of your community. Don’t be afraid to ask friends, family or other members of your community what they think of the new business. Get a feel for the potential success they see this business having and if they see it being a good fit within the community.
Use these tips, ask yourself these questions and you should have a much easier time deciding if investing in a local business is a smart decision for you.
Remember – those diamonds are in your backyard.
