Blog Investing How to Invest in your Community, and Earn a Profit

How to Invest in your Community, and Earn a Profit

date October 28, 2020 time 5 min read 250 views

Invest in yourself or invest in others? When it comes to socially responsible investing, many people it’s a ‘one or the other’ option — but it’s not. When you invest in the community, you make it a better place for you and your neighbors and there are still many ways to make it profitable. These are some of the top ways you can ethically invest and make your next investment count.

What if you could invest in the community and grow your wealth at the same time?

While many people will tell you that helping out your community has to be entirely altruistic, that’s simply not true. There are many ways to help those around you while still turning a healthy profit.

Here is a guide to community investment if you are looking to maximize your impact and your profits. 

Community investment and socially responsible investing

Let’s get some terms right real quick.

Socially responsible investing refers to investments that consider social and environmental benefits alongside a financial return. 

For example, investing in new sustainable energy resources is a socially responsible investment because it’s about improving the environment and creating new jobs. On the other hand, investing in fossil fuel companies that don’t follow EPA regulations is not.

Community investment is a form of socially responsible investing. When you invest in the community you make it a better place for the people who live there. That means you need to actively consider positive social factors rather than exclusively seeking financial gain. But a little incentive never hurts — of course.

Investing in the community can take on many forms
Investing in the community can take on many forms from real estate to p2p loans (source: energytransition.org)

How to invest in your community today

There are all kinds of ways you can invest in the community to make it a better place for everyone. 

Some of the most popular community investment examples include:

  • Social impact bonds
  • Community development loan pools
  • Charity bonds
  • Social Enterprise funding

In the next sections, we’ve outlined some of the best investment options if you are looking to simultaneously improve the community while gaining monetary returns.

Investing in real estate & affordable housing

Investing in real estate is a classic way to earn passive income indefinitely. It also allows you to provide affordable housing options for people living in your area. 

If you choose to invest in building new housing, you not only provide needed housing for renters, you can also improve the neighborhood for yourself and those living in it.

However, real estate can only be regarded as ethical investing when rent is fair. Don’t look to constantly gouge extra profit from your tenants. Build something appealing that people can be proud to call their home and make sure it’s maintained.

Rewards of investing in real estate

  • Provides much-needed affordable housing in low-income areas. 
  • Potential for long-term passive income. 
  • Tax benefits. For example, any renovation done on the property qualifies for tax deductions.
  • Improves the lives of those living in the community by developing the area.

Disadvantages of investing in real estate

  • Income isn’t guaranteed and it may take a while for you to break even.
  • Acting as a landlord can be stressful, particularly when tenants do not follow the tenancy agreement.
  • A large amount of capital is required upfront without any short-term returns.
  • Liquidating property can be a lengthy process. 

If you’re looking to invest in the community with the hope of financial gains but don’t already have lots of spare capital, investing in real estate may not be your best option. Let’s look at some others.

You can invest in real estate to improve housing in your local community
You can invest in real estate to improve housing in your local community
(source: geograph.org.uk)

Fund public services & facilities through municipal bonds

You can help your local government fund public works like libraries, bridges, parks, and roads by taking out a municipal bond.

Municipal bonds are essentially loans that you can make to your local government to work on local infrastructure for interest later.

When a municipal bond reaches its maturity date, the full amount of your investment plus a little interest will be returned to you. 

Advantages of investing in municipal bonds

  • Invest in things like parks and libraries.
  • Municipal bonds are income-tax-free which means your earnings go further.
  • Bond investments are highly-secure compared to others like stocks. 

Disadvantages of investing in municipal bonds

  • Relatively low-interest rates, starting at just 0.2%.
  • To access higher interest rates, you need to lock in your investment for at least five years.

Invest in P2P lending and loan money to people who need it most for great returns

Don’t want to lend to the government or other middlemen like charities to help your community? Don’t have enough money for real estate? Want better returns than through bonds. Today, some options let you lend directly to people who need it. 

Peer-to-peer lending is a system that allows you to offer loans with fair interest rates directly to individual borrowers who may be unable to get loans from other sources.

At times when people need to borrow money, P2P lending provides an option that protects borrowers from extortionate interest rates when they’re in a tight spot. And they allow you to make a profit off of the interest. 

Rewards of P2P Lending

  • The interest you can earn with P2P lending is significantly higher than most low-risk investments. Usually around 4% or more.
  • P2P lending provides a safer alternative for borrowers with lower credit scores. These people may otherwise be forced to borrow from payday lenders that can charge up to 400% APR. 
  • P2P lending gives you the option to invest in small businesses and enterprises.

Disadvantages of P2P lending

  • All lending comes with risks. To minimize the risk, you need to choose a platform that protects your investment. And we’ve got just the option for you…
Lend a helping hand to someone in need. Invest in your community today
Lend a helping hand to someone in need. Invest in your community today
(source: wannapik.com)

Invest in the global community with MyConstant, and earn rates as high as 7% 

MyConstant was developed by a team of entrepreneurs who wanted to invest in their global community. 

We started as a stablecoin crypto project helping people around the world escape inflation and unjust transfer fees. We eventually became a platform for investors to lend responsibly and earn substantial returns from borrowers who needed capital in Southeast Asia.

We developed our crypto-backed P2P lending as a solution to combat the problems with traditional banking. Our loans enable borrowers worldwide to borrow with fair rates while investors can enjoy secure interest more than 4x the rate of inflation.

You choose the term, we match you with a borrower, and you keep the interest. It is that simple.  

Invest in your community and earn returns of up to 7% with MyConstant today. Sign-ups are free.

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