| Archive for Downsizer For an ethical approach to consumption |
| dpack |
investment and creditif ds is a virtual village do we need our local bank or credit union ? |
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| Northern_Lad |
Invest in me. Returns may vary. | ||||||||
| Penny |
Is that a bit like " The value of your investment could fall as well as plumet"?
Credit union, to answer the question |
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| Northern_Lad |
Ahem, remember my recent offer? |
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| gil |
Credit union.
Went through a time of wanting to set one up round here in the real world, but too much else to do. |
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| Penny |
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| Cho-ku-ri |
If we were a bank, and bloke off the telly, came into our 'Den' and asked for an investment, would we give him the money he needs? | ||||||||
| Barefoot Andrew |
With a bit of help sorting out the financial soundness of the proposition, quite possibly.
A. |
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| Nick |
Nope. Not as things stand. | ||||||||
| Blue Peter |
Re: investment and credit
You may have noticed that the real world banks and credit providers are in a huge <insert your favourite cuss here> world of pain at the moment. So, I doubt that it would be a good idea to enter this arena at the moment. Or perhaps, that's just what is needed, Peter. |
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| tahir |
Re: investment and credit
I agree with the latter, I love the idea behind the Grameen bank and similar initiatives, it's definitely something I'd be happy to participate in. |
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| Blue Peter |
Re: investment and credit
The problem would be that you would be lending into an economy which has gorged itself on credit. This is a very risky thing to do, which is why the banks are not lending, Peter. |
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| tahir |
Re: investment and credit
In our business (at those times when we've had our heads screwed on) we've always done well when there's a credit crunch/recession. People suddenly become risk averse and stop investing, those that can will always do well (providing they know what they're doing) |
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| tahir |
Anyway we'd be talking about micro credit here which is a totally different matter, in my opinion. | ||||||||
| Blue Peter |
I think that I'm talking about micro-credit too. The consumer is currently tapped out; many businesses are reported to be cash rich. The credit union would presumably be lending either to consumers or to small businesses not very far removed from consumers. There will be cases of people doing well in a recession, such as your good self, but you have to be able to spot them - it's back to traditional banking, where the bank manager knows their borrowers well. I'm not sure that that's going to be easy in the next few years, Peter. |
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| tahir |
I think we're uniquely positioned to know a heck of a lot about any prospective borrower. |
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| Nick |
Can I borrow half a million then, please? | ||||||||
| Blue Peter |
Computer says, "No", I think
Peter. |
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| Nick |
I'm not relying on Computer. I'm relying on our wonderful bank manager and sole share holder thus far to know and trust me, and to base his decision on that knowledge. Not some spreadsheet.
I rather suspect he'll say no, like, but at least it'll be a personal, well thought out reply rather than an autobot. Still, if I catch him in a good mood, anyone else wanna tenner? |
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| Blue Peter |
Well, if you're offering. Do you need to know my bank account details? Peter. |
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| vegplot |
I question the need for investment of credit in a downsizer world. Surely, the methodology of exchange is bartering which excludes the use of respresentative tokens, such as money. | ||||||||
| Nick |
Yes, including your PIN, mother's maiden name and your date of birth. Ideally, also, your memorable name. |
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| Blue Peter |
Credit is a very useful way of time travelling: I believe that a project I will develop in the future will produce significant returns. If you provide me with the money to create this project, in return I will give you some of the future benefits of it. If done fairly, and ideally, it is a win-win situation, Peter. |
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| vegplot |
Lending and being paid back without interest at a later date or expect a share of the business returns eliminates economic processes such as inflation. It stifle economic growth as we know it in the modern world but isn't this something we strive to get away from? |
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| tahir |
There are things in the world (Downsizer or otherwise) that only hard cash will access |
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| tahir |
Half a million what? |
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| Nick |
I'm thinking pounds. Sterling, not lbs. |
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| Rob R |
You don't think I should send half a lamb to the VAT office then? |
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| tahir |
Depends what you're trying to achieve |
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| tahir |
In your dreams |
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| Nick |
25k then? |
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| Blue Peter |
I'm not sure that lending or having shares in a project necessarily lead to inflation. As with all things, money can be used for good or ill. We need to deal with economic growth drastically, but we will still need money, because as humans we are time-bound creatures, and we still need to be able to carry value through time, Peter. |
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| MarkS |
Also I dont think that micro credits should operate with *no* interest. They should have a reasonable return - but deal in small amounts where conventional banking overheads make it unlikely that a bank would support. But cash is only one part of things. If I were seeking to grow a business I wouldnt want a sleeping partner who just puts in cash - I'd want someone who could bring suitable knowledge or contacts to the table as well. If all you need is money then there are ways of getting it - albeit some of them are quite expensive. If the business is good enough then it will repay that. The key issue for many businesses is business knowledge, either general business/accounting or specific sector. And for that you are better with a mentor. So if you are going to look at doing micro credit, I think you need also to build up a pool of people who can act as business mentors. If you were only going to do one, then I think the mentor is a more valuable thing to have. Turning a subsistence sideline into a real successful business is very difficult. |
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| tahir |
Would the mentoring have a cost attached? | ||||||||
| tahir |
Agree 100% |
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| MarkS |
Dunno? Depends I suppose on who does the mentoring and who is being mentored? If they are close geographically then its time. If they need to travel then there is a cost as well. plus depends on how the mentor can help the mentee  time/advice or more hands on - that will depend.
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| tahir |
I ask be cause your model requires some kind of payment to be made for credit; for some the time spent mentoring might be more costly than providing financial support. I broadly agree with what you're saying though |
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| dpack |
interesting so far | ||||||||
| MarkS |
doing micro credit has an admin cost at the very least. Also you don't necessarily want to be in the business of providing free working capital - cash for investment/growth is one thing - that is developing a business.
mentoring on the other hand does not have to have an admin cost above the time given, so someone could choose to provide mentoring for free. Of course a group of people could always get together and have discussions about the issues of small businesses. Say meet once per month and spend time on a couple of their business issues. but they would have to be local. |
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| Behemoth |
It's a fascinating thing, money is only one means of exchange and your deal is to provide the other party with something they value. Exploring what that is and how it can be done is all part of the 'downsizer enterprise'. | ||||||||
| MarkS |
true that money is only one exchange product, but it is fairly universal. Anything else can be used but unless it is of direct value to the recipient then it invokes a 'cost' time/effort/money to convert it into something useful to the recipient. | ||||||||
| crofter |
Not necessarily - it could be similar to this discussion. Re micro credit, what is the security requirement from credit unions? Is it possible to borrow without any? |
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| Rob R |
I'm cheaper, I'll make do with 20k |
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| MarkS |
I think face to face does more/better. YMMV Depends on the credit union - they can set their own rules. |
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| MarkS |
I'll take € - help you with diversification of your inverstments. |
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| Rob R |
Thanks. Can I borrow your dictionary?  
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| dpack |
with credit unions the usual way is to make small payments into the pot on a regular basis which will prove one can make small payments to cover a loan
i need to divert away from mainstream banking /investment cos they are rubbish at it i would be game to get some of my yah yahs out to start this properly ,on a sensible business plan and legal basis obviously 7% apr seems fair ,in or out,plus or less admin in the last 12 months the corporate banking sector cant come near that i can see a need for this for many and profit for all as well micro lending and micro saving is easy in our easy data control electric world the business mentoring thing is a needed subdivision of a micro bank (the biguns dont cos short term profit is more important than sustainable clients)but not the main function your thoughts please
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| Treacodactyl |
Main thought would be to try and find out how some existing ones work. I can see quite a few problems that would need to be overcome, such as what do you do if someone can't pay the money back or if someone needs their money back at short notice etc, etc. At the moment you can get over 6% interest, instant access and a huge chunk will be guaranteed by the government. | ||||||||
| MarkS |
Although... in this context it isnt too bad. inverse of investment ? Tahir gives me €25K and I'll return some of it, maybe, eventually.
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| MarkS |
Has anyone looked properly at Zopa?
http://www.zopa.com |
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| dpack |
details are important
the basic is in and out of the pot ,everyone wins |
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| Nick |
Where's the best return on a chunk of money, say £500 a month that I don't need to see again for a while. With no risk. |
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| Treacodactyl |
I don't know off the top of my head and it depends on circumstances. Can you pay off any of the mortgage, do you and your wife have a cash ISAs and what tax rate do you pay? The rates seem quite variable at the moment so looking at the newspaper financial pages, in the paper or online, will get you an idea of the latest rates. Remember some will have an introductory bonus so you might need to move your money to a better account in a year or so. Then check the bank is registered with the FSA ( http://www.fsa.gov.uk/register/home.do ) to ensure the government will guarantee I think up to £35 or £50k if the bank collapses. Note, I'm not that sure about the government guarantee so worth checking thoroughly for yourself if you're worried. A quick check still shows A&L as one of the best instant access account paying 6.50% AER which includes 0.35% bonus for 1st 12 months. Barclays pays 6.5% AER on its ISA which includes 6.5% a 1% bonus for 12 months. You can get monthly savings accounts that seem to pay more, but at the end of the month the whole account is often moved to an account paying quite a low rate of interest and there can be other conditions like having a current account with the bank. |
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| snozzer |
Yep, I have put money into Zopa as a lender, not a lot admittedly, but I am getting a fair return for my money. |