ROE (Return on Energy)
The acronym ROE is a simple three word combo used about every second on the trading floor of Wall Street and is a foundational block to Warren Buffet’s tenants to investing success. It stands for Return on Equity. Simply put, it’s the return you get for the money you put in. People use this calculation to gauge whether it’s a good investment for their money. The lower return on equity the worse investment, the higher…well you get the point. Since having such an interest in the securities market since college, I’ve always tried to relate what happens on Wall Street to my efforts on Main Street and ROE is a great example.
My use of the acronym ROE, however doesn’t stand for Return on Equity…instead, it’s a Return on Energy. Wall Street might be driven by Equity, but on Main Street, our ability to succeed truly is rooted in the Energy.
I recently wrote an article talking about every community’s ability to successfully bring back their core areas. Chattanooga, Savannah and many others realized success when they maximized their ROE (return on energy); it meant a greater return for their communities in terms of real dollar investment. Local stakeholders giving not only of their money, but time, talents and especially energy meant their turnaround story yielded exponential results for both the quality of life and the economics of the community.
I truly believe that every community has energy, but is that energy directed, is it focused in a cohesive direction thereby gaining a greater return on that energy. The communities, I have researched like Chattanooga who has found common elements in their energies were able to find success much quicker.
Take it from Warren Buffett or from me, but know that buying locally, investing locally and volunteering locally equal a greater community ROE no matter which acronym you use.