If a client asked me if they could achieve their financial goals by primarily investing in their local community, my answer would be maybe.

If you live in Atlanta then you could, with moderately low effort, achieve your financial goals investing primarily in Atlanta.

That’s because of the Roots platform and the Groundfloor platform.

Roots is a non-traded Real Estate Investment Trust (REIT) that invests in apartment buildings in the Atlanta metro region. In these buildings they don’t call occupants tenants, they’re called residents instead and can participate in their “Live in it Like You Own it” program.

If a resident pays their rent on time and keeps their apartment in good shape they get a discount on their rent which goes into the investment fund allowing the residents to build wealth while living in their well maintained apartment. The same is done with their security deposit.

Residents don’t want to leave these apartment buildings and are currently at a 95% occupancy rate.

The last 12 month return on the Roots fund was 13.67%* when other comparable real estate funds struggled to stay in the black. One can also set up auto-investing on the Roots platform. Music to the low effort investors' ears.

Investing locally and allowing residents (customers) to build wealth alongside you, appears to be in one’s financial self interest.

Groundfloor is located in Atlanta and many of their small business loan opportunities are in the Atlanta metro area. One would have to manually invest Atlanta area projects on their platform but the time it would take would only be a few minutes. Moderately low effort.

Groundfloor has investment minimum requirements of only $10 with a historical return of 10%* on their LRO (limited recourse obligation) investments, which are essentially securitized loans.

The Atlanta area currently has 9 equity offerings through SEC registered crowdfunding portals and 129 successfully funded equity offerings since 2016 and the passage of Regulation Crowdfunding.

Having the ability to allocate and balance your portfolio in different asset classes is a must when upholding fiduciary duty.

Atlanta has debt investments on Groundfloor that produce income. The city has equity investments through the SEC crowdfunding portals providing portfolio growth. Rounding out with balanced investments with Roots that produce income and growth.

So what about the rest of us that don’t live in Atlanta?

If you want to achieve your financial goals primarily through local investing outside of Atlanta then it’s possible with moderate to extremely high effort.

For the vast majority of us, this is a deal killer.

However, there is a path forward. When my clients ask me how they can achieve their financial goals while delivering positive social and environmental impact I advise them to do so on crowdsourced investing and lending platforms, even if it is outside of their community.

This is important for two main reasons.

First off, there is a huge benefit to invest outside of your local community and into our larger American community where we share a currency and political system. Using crowdsourced investment platforms link and mesh local communities which in turn form a strong national financial system by redistributing wealth from the large financial institutions to the individual crowd investors.

Secondly, we support the crowdsourced investment platforms when we invest on them. Which helps them grow, allowing them to continue building investment ecosystems that become more and more localized.

My intuition is that there will be more and more cities like Atlanta in the near future and in rural communities shortly after that.

I believe that fiduciaries have the legal obligation to tell their clients that investing in your own community is both in your financial and your economic self interest.


*Mandatory investment advisor disclaimers:

​Paul Lovejoy is the Principal Advisor at Stakeholder Enterprise and a member of FINRA license #7477274. Investing carries risk of financial loss. Past performance does not guarantee future results. There is no guarantee of income, appreciation, or return of principal from investing. Stakeholder Enterprise is a licensed fiduciary. We do not accept referral fees or take commissions from anyone, including Roots, Groundfloor, Prosper, SMBX, Honeycomb Credit or Climatize.