Looking Up: Finding Value in Your Investment Strategy

We all search to find meaning in what we do. Whether at work, through extracurricular activities, volunteer experiences, or in quiet moments spent at home, we seek to find inherent value in the ways we spend our time. Because, after all, time well spent is something that is not easily achieved.

How can we assign value not only to the work we do, but also to how we invest the money we make in honest, meaningful ways?

The financial industry is teeming with tactics to align investments to social wellbeing. One of the ways that is done is through a process called socially responsible investing, or SRI.

What is SRI and How Can It Benefit You?

Socially responsible investing is a practice by which investments mutually benefit the investor and the community. In essence, it’s an active-investing strategy that focuses both on increased returns and overall community wellness. This strategy requires you to take a more critical look at the companies you invest in, and it allows you to ask yourself questions about who the company is and what it stands for.

Here are 3 questions to ask yourself about a company you might consider:

  • What are its values as a corporation?
  • How does its mission drive them?
  • What philanthropic efforts is the company dedicated to?

These two components (finances and values) require strategic thought and action on the part of the investor for them to beneficially work in tandem. As SRI picks up speed in the global financial marketplace, securing these investments is made more accessible than ever before.

SRI is meant to be customizable, providing the flexibility for you to invest in companies that share your values and help shape the world you want to live in, and ultimately the world you want to retire in as well. For example, environmental care is at a record high and many socially responsible investments are aimed at reducing our carbon footprint and investing in companies that have a positive impact on the environment.

The Straight and Narrow

Investing the money that you make is just as important as the work you do to secure the funds in the first place. So it is important that your investments align with your needs, wants, and desires? Developing a financial plan around your set of values provides a more holistic approach to investing.

Think back to the three questions I asked you at the beginning of this article. Those questions can be used to provide a solid strategy to evaluate the companies you are investing in, and they can help you branch out to explore new companies of which you may not have otherwise known. Dedicate the time that it takes to thoroughly research a company and its outreach efforts.

When you invest in a socially responsible way, you are adding increased value to your monetary contributions– elevating it to a level of contributing to causes you care most about. Explore organizations who provide a public good or service to the community, or ones who uphold and support political and personal causes most dear to you.

Values-based investing will look different to everyone; therefore, it is important that you clearly identify the values that are most important to you and ways they can be interwoven into your long-term retirement investment plan. I challenge you to make a list of at least 3 values by which you live.  Then, underneath each value evaluate ways to combine these core values with your financial values. An example of this could be:

Family

Interweave your financial goals and interest with your family responsibilities and determine the things that are important to you as you provide for them when considering various organizations.

Faith

Find ways to link your faith and finances. You can start by evaluating your current investment profile. Do the companies you invest in support the same causes that you do? Consider altering your investments to more closely match your vision for life.

Fitness

Investigate corporations that have an eye for community health and support outreach programs that promote the advancement of public health.

Everyone’s list will look different, and that is one of the beauties of socially responsible investing. You are able to use the gifts and skills you have to help make a positive impact on society while also saving for retirement. That is killing three birds with one (financially responsible) stone!

Can Socially Responsible = Financially Responsible?

In short, yes. Of course, every financial situation is unique, and speaking with a financial planning professional on how to align your investments with your values in a socially responsible way can help.

SRI isn’t always the easiest choice since it demands rigor on the part of the investor to make financially sound decisions on companies who share their drive for good and change. However, just because you’re looking to socially responsible investing doesn’t mean you have to compromise your financial decisions. SRI isn’t “charitable donating” – it’s investing in a way that helps you reach your retirement financial goals.

Your investment strategy has the power to do more than accumulating money at face value, it also has the power to contribute to social and community wellbeing.