Author Topic: Grocery Co-Op Offering 4% on Capital Investment  (Read 648 times)

salt cured

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Grocery Co-Op Offering 4% on Capital Investment
« on: October 07, 2019, 08:28:35 PM »
My local grocery co-op is established (been around for 50 years), with 3 locations, and is raising a few million to upgrade the square footage of their flagship store. They are offering a 4% annual dividend on money put in (limit of a $100k investment, I believe). The only stipulation, besides investment size, is that they require a 10-year term. Setting aside the (real) risk of the business going under, any other good reasons to avoid replacing some bond investments with this?

terran

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Re: Grocery Co-Op Offering 4% on Capital Investment
« Reply #1 on: October 07, 2019, 08:54:14 PM »
Surprisingly, this topic has come up before. You might find some of those responses helpful as you think this through: https://forum.mrmoneymustache.com/investor-alley/interesting-investment-opportunity-in-local-food-co-op/

salt cured

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Re: Grocery Co-Op Offering 4% on Capital Investment
« Reply #2 on: October 07, 2019, 09:08:25 PM »
Thanks!

jpdx

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Re: Grocery Co-Op Offering 4% on Capital Investment
« Reply #3 on: October 07, 2019, 11:17:30 PM »
If you are going to make an investment that lacks diversification -- concentrating risk in one company, one stock, or one co-op -- do it with "play money" that won't hurt too much if you lose it all. Rationally, this is not a smart investment, but emotionally it will probably feel really good. So by all means support your local co-op, with the smallest amount that allows you to feel good without putting your financial life at risk.

BicycleB

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Re: Grocery Co-Op Offering 4% on Capital Investment
« Reply #4 on: October 09, 2019, 11:45:15 AM »
My local grocery co-op is established (been around for 50 years), with 3 locations, and is raising a few million to upgrade the square footage of their flagship store. They are offering a 4% annual dividend on money put in (limit of a $100k investment, I believe). The only stipulation, besides investment size, is that they require a 10-year term. Setting aside the (real) risk of the business going under, any other good reasons to avoid replacing some bond investments with this?

Yes.

Bonds can be sold, these can't. Other investment vehicles with similar or higher returns also exist that can be sold flexibly. You are giving up liquidity.

The other thread has examples of investments with similar risk profiles, but better liquidity and higher returns. I don't know if the returns are current; in your shoes, I'd investigate that.

I am an owner of a grocery coop, but only one share (less than $100; in essance, am just a member).