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Why I’m going to the Congo on Wednesday.

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Live well by doing good.

Four and half years ago we started The Crankset Group and 3to5 Clubs to help business owners get to their Ideal Lifestyle, and to fulfill my vision of focusing on solutions to poverty. On the latter, we’re taking a radically different approach.

Non-profits vs. Capitalism
500 million people (1 2/3 U.S’s) have come out of poverty in JUST 20 YEARS in China and India alone. And it wasn’t the result of non-profits or other traditional means. It was achieved through [ugly, evil, horrible, by some accounts] capitalism, which has been exponentially more effective in attacking poverty in those countries than any other methods.

In the last 100+ years of well-meaning non-profit intervention in Africa – a few trillion dollars and tens of thousands of incredibly dedicated lives later – the rosiest of studies says the long-term impact on economic growth is not “tranformative” and “peters out” (The Effects of Foreign Aid in Sub-Saharan Africa, Aug 4, 2010). Some research says Africa is actually worse off economically then it was 100 years ago.

Using Business to Effect Change
The Democratic Republic of the Congo is the second poorest country on earth . We’ve been asked by business leaders and the government to come get involved. I’m doing it by getting personally involved, long-term, with national as well as local business leaders and government there, and starting a company in the Congo with an investment where I will purposely take a minority position to native Congolese.

We intend to effect permanent change by rebuilding the economy with the revenues from the business, and by working to build and rebuild many businesses around that one by the velocity of the dollar (capitalism). This is when the same dollar moves through multiple businesses in a local area and creates wealth multiple times for many people. We’re looking forward to using it to kick start local economies in the DR Congo.

It’s Time to Give Local Capitalism a Try
Some people and some non-profits have a negative view of capitalism because of the high visibility of giant corporations making bad macro decisions for micro (local) problems – see my blog on The Problem of Big . But capitalism at the local level is a very positive, stabilizing, long-term solution, as demonstrated by the incredible successes in China and India.

One of the big issues in the DR Congo has been giant corporations coming in, pulling out resources and money for a few years or more, then leaving. Because there was no local or national ownership, the net effect was never sustainable. We intend to create local ownership, keep a significant portion of profits local, and see the Congo transformed one business/locality at a time.

I could have given this money to any number of charities that do incredible work to solve short-term problems (hunger, disaster, health, etc.). And we’ve been offered thousands of dollars by non-profits to fund the large potable water project and the clinic we’re putting in before we do any business. We’ve also been offered millions in loans by the U.S. government to accelerate the start up process exponentially.

But in both cases my Congolese friend and I believe these improvements should come from the profits (and in this case the initial investment) of the company. It will provide a “no strings attached” approach, but more importantly it will show people the direct benefit of having capitalism and our company working in their area.

Giving Money or Building a Business Are Both Risks
As with any investment, there are risks, and with this kind of investment, the risks are much higher than normal. However, this isn’t a typical investment in a company, but the decision to focus on capitalism instead of charities to build a different future for the DR Congo. If we were giving these funds to a charity, I would expect no return. If our company grows and prospers we will be able to give this money (in the form of starting other locally owned companies) many, many times over.

Intending to Succeed
My Congolese friend and I intend to change the Congo. He said, “I want you to see the Congo today because I want to stand with you on the edge of Kinshasa 10 years from now and say, “See what we have done!””.

If we succeed we’ll see a very different Congo down the road. If we don’t, we’ll call it practice and go back to the drawing board to see what else we can try. Either way, we will Live Well by Doing Good.

We intend to succeed.

How & Why to Find a Locally-Owned Bank

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The velocity of the dollar.

Macro capitalism has given micro-capitalism a bad name. The purpose of capitalism is to create the velocity of the dollar locally – everyone prospers. Big biz takes that dollar away to “headquarters”. Here’s one way to keep your dollar in your town.

Hudson Bay Co. started in 1670 and was the largest landowner in the world for centuries – they are still in business. For thousands of years big businesses like that were always the exception, and our economies did not revolve around worshiping at the altar of Giant Corporation, Inc.

In the late 1800’s for the first time in history, giant corporations began to regularly spring up, but it wasn’t until the 1950s that the term “big business” became common place in the English lexicon.

Big business is a very new idea that many believe will have the same run that the railroads had. In 1903 the railroads had 97% of all inter-city traffic. Yet with the advent of the internal combustion engine, they were already dead and didn’t know it. In 2011, railroads provide 0.03% of inter-city traffic.

Giant corporations like Hudson Bay will always be around, just like railroads, but with the advent of the internet, nano technology and ease of travel, we are moving back locally. And that’s a good thing.

Capitalism always had the unintended good of “the velocity of the dollar”. I spend a dollar at the bakery, who spends it at the tailor shop, who spends it to buy some shrubs, who spends it at the local restaurant, etc. Everybody prospers. Giant Corporation, Inc. interrupts that process. I spend a dollar at Giant Corporation, Inc.’s local big-box and a good-sized chunk of that dollar is taken out of the local economy back to headquarters.

Here’s a great and easy place for us to start to bring the dollars back into local communities. Bank locally.

You can read why we’re leaving our giant bank and why we didn’t do it sooner here. We’re now beginning the process to look at which local bank we want to work with.

Here’s three easy steps you can take to do the same thing:

1) Find a financially healthy (4-5 star) local bank anywhere in America at this great website hosted by Bauer Financial – select your state and you will see only the banks that are headquartered in that state.

Within 15 minutes of doing this, I identified 5-6 local banks that we will be interviewing.

2) Before you decide which ones to interview, visit this site hosted by Pro Publica to see all the banks in the U.S. that took a bailout. In just a minute or two you can see if any of your local banks did. I dropped one of my potential choices after visiting this site.

3) Check out your finalist’s sites, interview them to see which one best fits your needs, and keep your dollar speeding around your own town, city and state.

The move to “shop locally” isn’t a fad. We’re just going back to where we lived for thousands of years. Check out ShopCity.com and ShopLocally.com while you’re at it.

Happy banking!