By David Thomas
Democratic finance is a new way to invest your money that doesn’t involve trusting banks. Instead, you can make investments of as little as five pounds in renewable energy projects that power communities, and in return for investing you get a sensible amount of profit.
Abundance Generation is a UK company that has, in six months, attracted almost £1.5million in renewable energy investments. This makes Abundance the fastest growing crowdfunding platform to date.
The rising costs of energy means everyone in the kingdom but Old King Wenceslas is concerned about the price of winter fuel. This concern over affording energy is not just for oneself, but for one’s children, too. Abundance allows investors to invest in their childrens’ names, or gift the investment to a friend. The payback, on average, is 8 percent, and the investment lasts twenty years.
Bruce Davis is one of the company’s directors. As an anthropologist, he is interested in how people use their money and in designing a democratic finance model for funding public infrastructure. Meeting renewables expert Karl Harder led to Abundance being launched in 2012.
Taking responsibility for your own money
“Ninety-nine percent of what banks communicate – what they call ‘trust’ – is actually a distrust in yourself. They try to undermine your confidence to make you reliant on them.” – Bruce
Bruce Davis on switching banks, or even taking money out of banks and into “things.” Via The Eco Experts
Risk: being realistic about uncertainty
Abundance currently has one project that is generating power, another in construction, and four in the planning stage. Having a number of projects available for investment gives assurance, as it allows investors to hedge their investments. The principle with each project is the same – renewable energy – but variety mitigates unlikely events such as a wind turbine being blown away.
“When we talk about ‘risk’ what we actually mean is ‘uncertainty’… I would say that risk is a good thing because it’s when you’ve quantified uncertainty… Actually what you need is a mix of risks. We’ve lost the ability to think about risk in terms of managing uncertainty.”
Bruce Davis defines ‘risk’ and ‘uncertainty’ as investment terms. Via The Eco Experts
Real things versus money
Bruce believes in real things, as opposed to placing your faith in money itself. With the advent of democratic finance, it’s now possible for everyday people to invest in assets. Although prices and costs have fluctuated wildly, with a “thing,” at least you can comprehend its value.
“[People should] actually have the confidence to make decisions about where [their] money goes, and how it is used, rather than putting it into someone else’s hands and saying, ‘Right, OK, you make those decisions for me…’”
Bruce Davis explains why democratic finance is important via The Eco Experts
You will probably hear more about Abundance Generation in 2013. (Especially if you Google it). Thanks to Bruce for agreeing to the interview. For more information I recommend a visit to their website: www.abundancegeneration.com
About the author:
David Thomas writes about cleantech, government policy and energy efficiency for The Eco Experts. You can speak to him @theecoexperts