How the Sierra Nevada Wealth Index is Used

The Sierra Nevada Wealth Index describes the social, natural, and financial assets that comprise the wealth of our region.  But measurement alone will not expand wealth.  The Sierra Nevada’s wealth will grow only to the extent that public and private decision makers invest resources carefully and wisely to expand that wealth, particularly today when pressures for development are in full force.  Wiser decisions are made when local leaders understand and act on long term trends.  The responsibility to use this information rests where it always has, with individual business owners, civic leaders, and other who want to see our communities prosper.

The Sierra Nevada Wealth Index is a powerful tool for decision-making.  The Capital Investment Diagram pictured in this section shows the relationship between social, natural, and financial capital.  The critical challenge for decision makers is to design and implement investment strategies for Sierra Nevada communities that will increase at least two forms of capital without diminishing the third.  Investments located in the intersection of the three circles offer the greatest return for Sierra residents.  Investments that expand one form of capital, at the expense of one or both of the other forms of capital, diminish the Sierra Nevada’s overall wealth and must be avoided.

For example, a business owner who decides to buy and remodel a vacant building downtown, rather than build a new facility on farmland outside of town:

• Builds financial capital by turning an underperforming physical asset into a business that creates financial capital for the private and the public sectors

• Builds social capital by enhancing the vitality of the downtown and reducing commute times for employees

• Maintains natural capital by not diminishing the size and productivity of the working agricultural landscape and by reducing pollution from unnecessary car trips

The Capital Investment Diagram is useful for decision makers of all types whether businesses, individuals, families, or public agencies.  The more quickly, widely and frequently people in the Sierra Nevada begin to evaluate and make decisions on this integrated basis, the more rapidly we will see our region’s wealth grow and our communities prosper. How well we plan for the future dictates the future wealth of the Sierra Nevada.