My Money Transformation in 8 Steps

I was inspired by this Money Transforms website to share my own story.  

The reason I want you to transform your relationship with your money is two fold: 

  1. Your own liberation. For too long, I’ve been trapped by my relationship with my money. I’ve felt so inadequate because I didn’t have enough. Then when I’ve felt like I’ve had enough, I’ve felt so complicit in the violence and evil in the world because of where my money has been (my mortgage at Wells Fargo, my retirement in index and mutual funds that have Exxon, Bank of America, Mark Zuckerberg… Uber… Walmart, Duke Energy, Exelon, AT&T, Comcast — some of the biggest polluters and Trump supporters) — and some of my money is still in these places. But I’ve begun to sense a liberation because this month — for the first time in my life — more than half my money will be in values and impact aligned investments and credit unions.  I’ve finally withdrawn the majority of the money I’ve had in the big banks and big multinationals and I will be able to sleep easier at night, knowing that I’m investing in some of the most talented values aligned entrepreneurs and in business entities where investor supremacy isn’t the dominant paradigm. Investors are at the table, but they share power with workers, community, and future generations. In the co-ops that I’m now invested in communities of color and workers have a voice — in some cases they’re worker-owned co-ops that have been so successful they’ve raised money and grown. This is the kind of enterprise and investment portfolio I’m excited to tell my kids about… a portfolio of investments that might help bring into being a more livable future for my grandchildren.
  2. Co-op entrepreneurs need capital. The other reason I care about this is because I know the other side of the equation. I spent the better part of the past 12 asking more than hundred people for money. As the Co-Founder of a co-op, I’ve been raising money to grow our co-op (profitable for the past 4 years) into Boston, Chicago, Cleveland and Connecticut. I was pitching an investment that pays 5% interest per year with full repayment in 10 years. I asked people that care deeply about the co-op I’ve been building and have poured themselves into it in other ways. So why didn’t they invest? They (and their financial advisors and trusted friends) didn’t have a framework for how an investment in our co-op fits into the rest of their portfolio. My hunch is that 97% of folks wouldn’t know where an investment in a co-op might fit in their portfolio — much less how to think about the due diligence associated with the investment to understand the risk and return profile for them to make an informed judgement. While I’m not raising money for my co-op right now, 6 of my very dear co-op entrepreneur colleagues (Greg, Jessica, Phil, Hays, Astrid, Molly) are looking for capital and I’d love to help them raise the money they need. In fact, I expect I’ll be spending the better part of the upcoming year or two helping them raise the money they need to actualize their visions. Some of that money I believe will come from larger institutional investors (religious orders, endowments, family offices). But I also believe that individual investors — folks like you and I — who care really deeply about this stuff are a critical piece of the puzzle in how we transform finance and investing in this country. The more you and I are willing to take bold action. The more I believe our churches, synagogues, college friends, neighborhood friends and others will hear about the amazing investment opportunities that are giving you a sense of liberation and joy. 

My Journey in 8 Steps

  1. I created an investment club. In 2016, after a good friend pitched us on a business he was building, my college friend who was in wealth management and I decided we were going to invest. I called up a bunch of friends and asked them if they wanted to invest with us. It was fun! I realized a lot of my friends also wanted to align their money with their values and our dear friend was evangelical about the regenerative business he was building. I made my first direct, private investment in a small business where I had a relationship with the owner and it felt great. 
  2. I named my feelings. I’ve felt angry, frustrated, trapped for 12 years. This started when I was 22, when I got my first 401k and realized I didn’t really have options to invest it in ways that felt like it aligned with my faith or values. I sucked it up and didn’t think much about it for the following 9 years… Then finally in 2018, I wrote about my feelings in a piece I titled: My Investing Turmoil. This was the beginning of me recognizing I had to do more than just one small investment in my friend’s business. I needed to do more if I was going to come face to face with the growing intensity of my feelings and the discomfort they brought me. 
  3. I made a Slow Money loan. Through a beautiful networking session facilitated by Slow money NC, I met a few farmers and food entrepreneurs and made my first direct $3,000, 3% interest loan in a local Black Bakery owner. Bobby was great. He repaid me each month and after a year asked for another $2,000 and after two more years paid them both off, then asked for another loan. I realized I could do more of this so I got some friends involved and we helped another Black entrepreneur raise the money she needed (and might have gotten from friends and family had she been white or if she had been raised in a family with wealth or class privilege). This second loan helped me develop an awareness of what reparations might look like. Getting to know this entrepreneur gave me an appreciation for how different life is when you don’t have the gender, skin, and class privileges that I have. 
  4. I made my first two co-op investments. Through my involvement at Start.coop I got to know 6 super talented co-op entrepreneurs who were raising money. Because I got to know them pretty well through the accelerator program, I invested in two of them. Even though I knew it was risky, I also knew there was a small chance of some upside financially. More importantly though, even if both enterprises failed, the work they were doing was yielding such important field-buidling impacts, I knew others would come along afterwards and learn from their models  — bringing fair trade to wine (and farmers)…. And organizing uber and lyft drivers. Both sectors have such importance for our future. What was challenging about both these investments for me though, was that I had to be ready to really let go of the money. I couldn’t really invest very much because I knew I could lose it all. I had to be prudent and so while I could put a little bit of money in, it wasn’t nearly an alternative to more stable index funds or bond funds or mutual funds that still dominated my portfolio.
  5. I raised money for the co-op I started. After 8+ years of building the Community Purchasing Alliance, I for the first time spent a meaningful amount of time this past year asking for money. We got registered, created a formal offering document and disclosures and started taking investments. In this process, I learned intimately about the Securities and Exchange Commission (SEC) rules, the different types of exemptions to these rules. Why most private placement investments can’t talk about themselves publicly (or really at all — except in 1on-1 conversations). It was eye-opening to how hard it is to solicit investments from non-accredited investors. And then even going through the process of getting registered, I realized the uphill battle that small organizations raising capital face. 
  6. I started helping friends and learned even more. As I started to try to help friends get investments, I learned how much privilege I had in my fundraising efforts. I realized how many things have to align to make a fundraising effort (of a co-op or for a shared ownership fund) come out successfully. I realized the art of building and cultivating relationships of trust and building credibility with investors. I learned about Donor Advised Funds (DAFs). I learned about equity and debt. I learned about co-op funds, CDFIs, Credit unions. I learned how risk averse they all are and how hard it is for them to really make meaningful investments in “high-risk” start-ups or unproven co-op business models. I started to realize I needed to invest and shift more of my own money into real estate to balance out my concentration in early stage and small co-ops and social enterprises. 
  7. I learned about Kachuwa Impact Fund and fell in love. It almost felt like love at first sight — when I heard that 60% of the Fund’s assets were held in real estate and 35% were in mature, dividend paying co-ops and environmentally focused enterprises. Kachuwa was the perfect complement to my higher-risk higher return start-ups. It was an already built, well diversified, stable set of co-ops and non-extractive real estate investments that made my heart sing. The challenge was the only place I had money that wasn’t already tied up was in my 401k and IRAs. This pushed me to figure out the beauty of the Self-Directed IRA. I had heard about these, but had been dragging my feet on them because of the fees. Then a friend told me about a low-cost Self-Directed IRA that was trying to be the Betterment (low-cost online optimized) version of an IRA… AltoIRA. I tried AltoIRA and my friend was right. Within an evening I had signed a half dozen forms trying to move my old retirement accounts from Vanguard and Fidelity and my RothIRA from ETrade over to this new AltoIRA so I could make a meaningful investment in Kachuwa. The other challenge I had to overcome was going against all my friends and family members’ words of caution that I shouldn’t concentrate to heavily in this one fund. They cautioned against having more than 10% of my portfolio in any one single investment or fund in case anything unexpected goes wrong. I believe there is wisdom there, but I was just too excited. I needed to start to sleep at night — and knowing my money was put into these enterprises and knowing the integrity of the founder and President of Kachuwa — I knew what I needed to do for my conscience and for my kids and their grandkids — and for our world. 
  8. I’m refinancing my mortgage with a credit union. The appraiser came last week and hopefully before the end of this year, I’ll close on a new mortgage with Alliant Credit Union at 3% interest for a 20 year mortgage. Moving away from Wells Fargo has long been an ideal… and with interest rates so low — and with NerdWallet directing me to Alliant as the best online credit union — I’ve found superb service, and a fully online process that I was able to start right away and get quotes write away and everything I needed to move the process forward. It isn’t the bare bottom rate, but it’s within striking distance of the best rates out there — and I know my interest payments aren’t going to enrich and exploit and extract… but rather to serve. 
Morgan & Wael from Jeddah’s Tea — a Slow Money loan I made in Durham in 2019.

You ready to get started?

I created this short video today and I hope to create some more.

What questions or challenges are you wrestling with right now as you think about your next steps?

Would you be willing to share them with me? I’d love to respond to them in an upcoming video on this channel? Share in this form here:

http://bit.ly/FelipeReinvest

Fill our this brief 4 question survey and we’ll keep you posted on the zoom link and other resources along these lines.

Join me and a group of others on December 4 at 12 noon to discuss.

Leave a Reply