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Keep your wallet near your heart - Invest in line with your values

August 7, 2017

We hear that money is the root of all evil but that doesn't have to be the case. In the age where companies like Apple and Tesla catapult their stock price by connecting deeply with consumers, it's kind of passé to think of investing only in terms of cold numbers. When it comes to where you put your money, ask yourself what kind of a world you are creating around you. A lot of players in the financial industry understand that more and more people and institutions like schools or foundations want to invest in a way that's true to their values. They have been catering to these "socially responsible investing" or SRI clients by offering more and more solutions that let investors take into account the ethical dimensions of choosing where you put your money.

 

Here's a great post from George Kao, spiritually-based marketing and business coach, that I will quote in its entirety: 

 

"Investing with socially-responsible values, and earning good financial return, has much gotten easier in the past few years. I'm considering opening a retirement account with OpenInvest which makes it very easy to invest in stocks with more socially responsible companies. Another option is Swell Investing.

Popular robo-investing platforms Betterment and Wealthfront are also getting into socially responsible investing, although it's very basic... if you want more options to better match your values, look instead at OpenInvestor Swell Investing.

As I learn more, I'll include links in the comments below. If you have anything to add, I'd love your comments as well. Where do you put your retirement savings? What kind of financial return are you earning, and do you feel it matches your values?

Three years ago I created a retirement (SEP IRA) account with LendingClub-- a really simple way to earn a safe financial return of approx 8-12%, that also had a socially responsible dimension: the money is lent to people who needed to re-finance their mortgage, or pay off other higher interest debt, or to start a business. However as LendingClub has gotten much more popular, the financial returns have gotten down to 5-6%, and I've heard of others getting even lower. Still, it's less volatile than stocks, and a higher return than CD's or bonds, so it remains a good alternative. But it's good to diversify, hence I'm thinking of opening an additional SEP IRA with OpenInvest.

I hope this helps anyone who's been thinking of moving their money.

 

If you know anyone who's good at investing, or has done some research into socially responsible investing, I hope you'll mention them in the comments, if you think they are open to sharing any suggestions here. Thanks!"

 

 

We should probably address some of the noise and misinformation (that passes for common wisdom) you are going to hear if you talk to friends and family about investing with your heart. The bias in our culture is that money is evil and that the only way you are going to get rich is by investing in companies that ruthlessly pursue the last dime of profit even if it means trashing the planet, workers or communities. For the most part, SRI mutual funds can hold their own against traditional funds and there are other areas like Peer-to-peer loans or cryptocurrency, like bitcoin, that you can invest in if that lines up with your values. We will come back to this subject in more detail and also welcome discussing values in any FiClub one-on-one conversation about investing. Consider for now the following article: https://www.cnbc.com/2017/06/16/how-to-win-in-socially-responsible-investing-dont-exclude-bad-stocks.html that lines up well with our measured approach tailored to each person's values, objectives and risk tolerance.

 

 

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