A couple years ago, I was given ownership of an investment account my wise and wonderful grandfather had set up for me. There wasn’t a ghastly sum of money in there, but it was enough for a down payment on a home, the beginning of retirement savings, or whatever I wanted it to be.
I was stumped on what to do. Should I buy a home? I mean, the money’s just sitting there, right? Should I continue to invest in it? As someone with so little clue about investing, I had no idea what to do.
So what does a Millennial like myself do? I find the first financial advisor in my area that Google picks and contact him.
He was a really cool guy. We met in his office and talked about investing and he complimented me on my mermaid skeleton necklace.
All was going well until I realized that the mutual funds my grandfather invested in were tied to companies like tobacco, pharmaceutical, and animal testing companies that I didn’t agree with.
I was pretty surprised. Was this how the market worked? How could I ethically invest this sum of money while still making money? What was I going to do?
This is how I found out how to ethically invest.
Buying Individual Shares of Companies: Risky Yet Personable
After having a traumatic experience with trying to buy a home in North Carolina, I decided to just invest the funds.
My first financial advisor had apparently never encountered a client like me who was so against being a part of these companies. He spoke about his aversion to the tobacco companies—but he still invested in mutual funds associated with them. What?
I wasn’t that kind of person. I insisted that there had to be another way. He told me that I could just buy individual stocks in companies, but, seeing as no one could predict how well those companies would do, this was a risky move.
It sounded complicated and like it would take a lot of effort and I would have to constantly adjust my funds in order to ensure that I would profit. It didn’t sound appealing, but it did seem like the only way to invest my money in something I believe in and companies I agreed with.
My financial advisor did not advise this course of action and was disappointed when I told him I was going to pursue it. We parted ways.
Finding the Right Mutual Funds: Your Best Bet
I never did set up my portfolio the way I intended to after seeing my local financial advisor. It just seemed like a lot of work and well… I still wasn’t sure how to do it.
I did transfer the money out of the financial institution that it was in (and away from those mutual funds I disliked so) and into another account, where it sat for several months—uninvested—while I decided what to do with it.
Then, I came across a different financial advisor, one who lives a couple states away, who was about socially responsible investing (SRI). SRI is about investing in funds and companies that cultivate sustainable, ethical practices for our people and our planet. I was interested, so I got in touch.
This guy was super nice, knowledgeable, and helpful about SRI, despite the fact that he couldn’t work with me. He explained that his clients have a minimum amount to invest. My funds didn’t even come close to that amount.
However, he still gave me resources for finding the right mutual funds for me. He explained that if I was going to be investing over a long period of time, mutual funds made the most sense and required the least amount of maintenance.
The resources he gave me were excellent and included a SRI website that has been invaluable to me (you can find that site here) as well as the names of two ethical investing companies that I might be interested in getting in touch with.
The site mentioned above—The Forum for Sustainable and Responsible Investing—has detailed charts about all types of SRI mutual funds and their performance, but more importantly (at least to me), is the tab on the chart where you can click “Screening and Advocacy”. This will tell you about what types of practices these mutual funds limit or avoid.
These categories include:
- Climate and Clean Technology
- Pollution and Toxics
- Community Development
- Human Right
- Labor Relations
- Executive Pay
- Animal Welfare
- And more!
What’s great about this is that you can evaluate these mutual funds based on what’s important to you. For me, animal welfare is among the most important ones. It was important to me that I invested in mutual funds that didn’t work with companies that tested on animals.
I chose to go with Domini because unfortunately, Pax didn’t have any funds that actively sought to avoid animal testing. I even contacted them to ask about it. Domini was a natural fit for me. It was super easy to set everything up and invest my funds. I’m proud to have my retirement and saving funds invested with them.
When Investing Is a Good Idea: Your Future Boss Funds
It’s a known fact that many Millennials don’t have any savings. In fact, 31% of us have $0 in savings. How shocking is that?
It’s shocking when you consider that disaster could be right around the corner at any time. You lose your job. You don’t have health insurance. You get in an accident. You can’t work. You’re at risk to lose your housing.
Things can happen so fast.
So here’s the deal: investing may or may not be the right choice for you depending on what you plan on using your money for. Have $1,000 that you want to invest for retirement? Absolutely, invest that shit! Have $2,000 that you plan on using to buy a house in a couple years? Probably easier to leave that money in your traditional savings account with the bank.
You can max out your retirement fund at $5,500 every year. I would highly suggest you do that if you’re financially able to. If you’re not able to reach that amount, don’t stress about it—even investing a little bit helps, whether it’s $100 or $2,000. Your future self will thank you.
How much should you actually be saving? 20% is the general rule. 20% of your income should go into savings. These savings could be for anything—emergencies, retirement, etc.
Saving feels like complete nonsense if you’re a living-in-the-moment type of gal. I get it. Why would you ever invest $1,000 into your retirement account when you could go on a vacation to Mexico with friends?
Hm. Let’s think about that one: starve when I’m 75, or party now. Which would you choose?
Just save some money. It doesn’t have to be the 20%. Heck, it doesn’t even have to be close to the 20%. Just save something, and save it now. If you want to ethically invest like a Millennial boss, you can do so. Choose what’s important to you and build your financial portfolio around that. You’ll feel good and—you won’t starve when you’re 75. Toodles!