From Consumers to Investors

I'm joining the ranks of the people who dislike using the word "consumer". We use the term consumer to designate a person who is on the receiving end of transactions. We use it interchangably with "customer", as in the people who buy things and use services. This is the definition of consumer that I found on a web search:

consumer

1. a person or thing that consumes.

2. Economics . a person or organization that uses a commodity or service.3. Ecology . an organism, usually an animal, that feeds on plants or other animals.Origin: 1375–1425  for earlier sense “squanderer,” 1525–35 for current senses; Middle English

For contrast, look at the definition of "investor".

investor

1. One who puts (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.

2. One who uses (money), as in accumulating something: to invest large sums in books.

What would happen if we began to approach our community as investors rather than consumers?

I'm not naive enough to suggest that all Renton residents should be philanthropists. I'm suggesting that Renton residents would do well to consider how their money can continue to work for them after they've spent it. In other words, sometimes what seems like a good deal on the surface is actually not a good deal. Saving money by shopping at a big box store or online leeches money out of your community. Spending money at local, independent stores may or may not cost more, but stays within your community longer to create more wealth and health in your community.

Let's look at some of the research on this topic.

• A series of studies conducted by Civic Economics demonstrates that money spent at independent, locally owned stores is more likely to circulate locally than that spent at a chain. For example, the study for Louisville found that independent stores recirculate 55.2% of revenues compared to 13.6% for big retailers, and that local restaurants recirculate 67%, while big chains do 30.4%.
• Communities with a greater proportion of small businesses show lower rates of mortality, obesity and diabetes, according to a study from Louisiana State University. "What stands out about this research is that we often think of the economic benefits and job growth that small business generates, but we don't think of the social benefits to small communities," says Troy Blanchard, Ph.D., lead author and associate professor of sociology at LSU.
• Home values increase faster when they're located near a business center dominated by independent businesses. Independent We Stand, a national collaboration of small businesses, developed a calculator to show how much a home’s value would have increased over a 14-year period if it was located near a strong independent business district. The calculator revealed that in ZIP codes that contained a central district dominated by strong, independent businesses, home values went up 54.2 percent more on average than those without one.

In summation, the dollars spent with small local businesses in your city continue to work for you after you've spent them by helping your home value increase faster, improving your community's health, and circulating more money within your city. There are many other studies that document the contrasted effects of spending money at a local, independent store versus a big box chain or online.

It's like you have a big, juicy ripe tomato. Add a little salt, and you have a tasty lunch. Alternately, you can save the seeds and plant them for a bumper crop harvest at a later date. The choice is yours!

I want to challenge you. The next time you're tempted to make financial decisions based solely on price, take into consideration the bottom line of your community. What will happen to your money after you spend it? Will it continue to work for you, or will it end up in another community, benefiting someone else?

What do you think? Is it more important to save a few dollars today, or invest a few more dollars at a local business to ensure that your money stays in your community and continues to aggregate and grow to improve your community?

To find some local, independent businesses near you, check out our RelyLocal directory at http://relyonrenton.com.