Rich Folks Aside, Here's a Peek Into How the Rest of Us Invest

Most of us, meaning those who hold down regular jobs and make modest incomes, don’t always consider ourselves “investors” – probably because that moniker is typically applied to the wealthy who play in the world of stocks, bonds, IPOs, venture capital and angel funding. Despite those things seeming way out of reach for most of us, seeing how they invest is pretty easy. All we have to do is watch the market. Billions of dollars in investment flow in and out of companies, fueling great fortunes and epic losses, all in the hopes of making more money.

That’s all very exciting, but we’re just trying to make ends meet and can’t play that game, right? Not necessarily.

In a recent survey conducted by INVESTinNC and WRAL TechWire, only 13 percent of respondents claimed they do not invest their money at all. That means 87 percent of respondents do invest their hard-earned dollars. but the question is, how? The overwhelming majority (61 percent) cited “my employer’s 401K” as their primary investment vehicle, with “a traditional broker” being the second most highly selected option (15 percent). Interestingly enough, these two vehicles aren’t drastically different from those the wealthy use.

Our numbers might be a lot smaller, but fundamentally, the opportunities afforded to us are very similar. The only real gap in opportunity exists in accredited investors (the rich folks) being able to invest in start-ups or early stage companies that the rest of us haven’t been able to touch. In fact, the wealthiest Americans report the bulk of their wealth is comprised of “business equity” and “other financial wealth,” which includes investments in the type of companies to which the rest of us haven’t had access. Until now.

With the advent of investment or equity crowdfunding (a form of community capital), the number of people with the ability to invest in start-ups and early stage companies has dramatically increased to include nearly anyone with at least an average income. The big difference is the grandiosity of the potential investment.

Different from investing in Google’s next project, the community-capital movement allows local businesses to raise money through the support of individual members of their community. Accredited investors (the rich folks) and non-accredited investors (the rest of us) can now support local businesses with which we feel connected.

Do you want to support hometown efforts? Great. What about veteran-, women- or minority-owned businesses? You bet. Whether you choose to invest a couple hundred or several thousand dollars, you can now support those entrepreneurs in a way that offers the potential for a very real, monetary return.

As long as the business owners have chosen to capitalize their endeavors through some sort of investment crowdfunding vehicle, we can all participate in their potential success through investments – large and small – in those companies. Sometimes referred to as the democratization of capital, it’s powerful and represents a new world order in terms of how small businesses and the economies they comprise are fueled by the communities in which they exist.

So, what can you do to learn more about participating in the community capital movement? INVESTinNC has partnered with local economic development groups and like-minded individuals across the state to help introduce Community Capital Clubs in all North Carolina markets that see value in helping local businesses and economies grow through local funding.

To learn more, please visit the Community Capital Club’s Facebook page, where you can join for more information and to be invited to events in your community that connect local investors (all of us) with local entrepreneurs.

It doesn’t matter whether or not you want to invest, raise capital, foster the growth of your community or simply advocate for economic development. This is an opportunity to level the playing field for friends, family, neighbors – the small business owners that have run into traditional funding challenges – while taking advantage of an opportunity to grow our communities one small business and one small investment at a time. Join the movement today!

You can find the original version of this article on WRAL TechWire. Click here to view.

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