How Does Your Garden Grow?
CUs invest in members to sow the seeds of success.
Mom, Dear Old Dad, and I will soon plant this year’s vegetable garden.
I like to help in this endeavor even though I no longer live on the old homestead and can’t tend to the garden daily. I still visit to sow the seeds, pull some weeds, and best of all, to enjoy a freshly plucked, vine-ripened juicy tomato.
“A garden is a grand teacher. It teaches patience and careful watchfulness; it teaches industry and thrift; above all it teaches entire trust,” said British garden designer Gertrude Jekyll.
Oftentimes our good ideas and best-laid plans cannot come to immediate fruition because circumstances out of our control delay gratification. Perhaps the economy, member preparedness, organizational change, current events, technological limitations, or other issues create these delays.
But we still need to plant our gardens to sow the seeds of success. Consider your environment as you do so—know if your garden needs sun or shade. Will your ideas grow where you plant them? Who will help tend your plot? Will you be able to harvest the bounty should it mature unexpectedly?
Think about how your garden can grow as research reveals this week that patience is a virtue for many financially challenged consumers.
Family finances improve slowly
In “Mortgage Distress and Financial Liquidity: How U.S. Families are Handling Savings, Mortgages and Other Debts,” the University of Michigan Institute for Social Research claims “Families are making their way through the economic conditions of 2008-2012 and there appear to be some financial improvements.”
|Lora Bray is research librarian at CUNA.|
Further, “Looking forward to 2013, we see that there is some modest reduction in the percent of families expecting to experience payment problems.” This news, although positive, implies that turnarounds will be slow.
See how women are faring as outlined by “Women’s Well-Being: Ranking America’s Top 25 Metro Areas.”
This study reveals that geography affects quality of life and choices made: “On the whole, women living in major metro urban areas are doing better that the typical American woman. However, not all urban and suburban women have the same choices and opportunities; the study shows how basic indicators in health, education, and income intersect with other important factors.”
Young adults and their parents, too, must be patient with personal finances. “The majority of young adults receive some form of financial assistance from parents and relatives… Help paying bills is the most common form of support, with 42.2% of all respondents receiving transfers of this type,” according to a National Poverty Center Working Paper Series report, “Familial Financial Assistance to Young Adults.”
Employees of state and local governments also experience challenges. “Women and African Americans Hit Hardest By Job Losses in State and Local Governments,” according to the Economic Policy Institute (EPI).
Why? “The disproportionate share of women and African Americans working in state and local government has translated into higher rates of job loss for both groups in these sectors.”
Does this consumer news try your patience? “CEOs Made 231 Times More Than Workers Did in 2011,” also by EPI. “CEO compensation has grown exponentially in recent decades, while worker compensation has been relatively stagnant. From 1978 to 2011, CEO compensation increased more than 725%, compared to an increase in compensation for workers of only 5.7%.”
Those at retirement age determine their levels of patience as they decide when to claim Social Security benefits. See “Social Security Claiming: Trends and Business Cycle Effects” by the Urban Institute.
This study provides an in-depth examination of data about when consumers decide to claim Social Security. One finding: “Early claiming has become less common for men and women of all education groups, not just for well-educated adults. Nonetheless, early claiming remains commonplace. Nearly half of eligible adults born between 1940 and 1944 claimed Social Security benefits at age 62.”
How do these revelations reflect the monetary needs of your membership? What circumstances create delay of financial gratification for various demographics? Can your credit union help?
Investing in members
Small businesses are an important part of our economy, and “self-employment could be a viable livelihood for workers with relatively poor job prospects,” says the Federal Reserve Bank of Richmond in “Microenterprise and the Small-Dollar Loan Market.”
Can you offer microloans to such individuals? Many such businesses would employ less than five people and require less than $35,000 in start-up funds. Further, they are “viewed as lacking access to traditional commercial bank financing.”
Do you know how your members make investment decisions? “Value Investing: Investing for Grown Ups” proposes that “value investors” are motivated by at least three philosophies:
- Passive-value investing, where potential investments must meet specific characteristics such as rate of return;
- Contrarian investing,” in which investments are made in companies that are “down on their luck;” and
- Activist-value investing. This involves taking large positions in poorly managed and low-valued companies and making money from turning them around.
When meeting members’ needs, remember the words of British actor Ralph Fiennes, “Gardeners are good at nurturing, and they have a great quality of patience, they’re tender. They have to be persistent.”
Reap what you sow. How does your garden grow?