Garren Katz: Why to Invest Savings in Friends and Not Stocks

In Chapter 14 of 15 in his 2012 Capture Your Flag interview, business and personal coach Garren Katz answers "How Has Being Open to New Opportunities Shaped Your Investing Experience?"  Katz shares his progression from traditional investing - Roth IRA, SEP IRA, securities - in his 20s to investing in friends in his 30s.  He notes how more and more of his friends have been starting businesses and why he is choosing more and more to invest in these people rather than those traditional outlets. 

Garren Katz is a business and personal coach based in State College, PA and advises his national client base on small business management, entrepreneurship, relationships, and personal finances.  He is also an active angel investor in several business ventures.  He earned his BA from Western Michigan University. 


Erik Michielsen: How has being open to new opportunities shaped your investing experience?

Garren Katz: Wow, I would say when I was in my 20s, I invested very traditionally, Roth IRA, SEP-IRA, in securities and that type of thing. You know, we live in a time now where more than likely somebody you know, or a buddy or a friend or a family member, they’re up to something. And they’re up to a neat idea. And they probably could use some money to help them along.  

So I’ve really shifted some of my money that goes towards investments into a pool where I want to invest in people, especially friends, folks you know. It’s so much more rewarding on so many different levels, if I invest in a stock and that stock does well, that feeds my ego a bit, and it’s kind of a one-dimensional satisfaction, whereas putting money into a project that a friend’s working on is rewarding on a multitude of levels, and honestly, I would have to say I get more satisfaction out of investing in a friend or a friend’s project that might not float than I do out of a successful stock transaction because it’s—it creates a new element to our relationship. So I really, really enjoy investing in other people’s passions, what other people are up to, what other people are taking on, I love being a part of it.