“The true perfection of man lies, not in what man has, but in what man is.” – Oscar Wilde
Is your money doing good work?
We all want our money to work for us and enrich us – and do it in a way that will benefit the world as well. Normally, however, we don’t really identify these wishes. (Contemplating our true inner desires is never a part of economic studies – businessmen would rather tell us what we want.)
Unfortunately, most of us were brought up believing that we can’t be both wealthy and benevolent – we can’t have it all. We heard the (merciless Roman) claim that “money has no smell,” that when it comes to money, every evil is acceptable. We got used to justifying the most ruthless behaviors by saying that “it’s not personal, it’s business,” as if something being a business can legitimize anything. (These declarations actually sound like lousy excuses of people with a guilty conscience.)
As a result of these norms, many of us believe that we have to choose between being wealthy and being good. Though we may make that choice unconsciously, it isn’t an easy choice. Our brain, with its empathic mirror neurons, is built to care about everyone else as well. That’s why being good to others makes us feel good, and hurting others causes us pain. Indeed, fears and distress can push us into harsh behaviors, but they cause us guilt and misery.
No wonder, then, that even the powerful, rich US financial-system leaders, who cold-bloodedly crashed the global economy in 2008, were mostly cocaine addicts. Our repressed emotions affect us anyway, so we better address them. When we listen to ourselves, we realize that choosing between affluence and peacefulness can indeed be tough.
Making Good Money
But do we really have to choose? Can’t being financially successful go together with being a moral, worthy person?
As a social activist whose family lives on its investments’ profits for several years now, I believe that profitability and morality can, and should, go together. In my experience, investing morally is better not only for our souls, but also for our pockets.
Yet, it requires us to know what we are doing. As most of us invest money (directly or through deposits such as pension funds and savings accounts), we better consider how to invest it in beneficial causes. Here are some of the ways we can do it in a way that benefits both ourselves and the world.
Remember, however, that this is not professional investment counseling. It is only my personal research and experience.
Generally, our investments are profitable as long as the economy is growing. However, continuous economic growth seems to have an inherent problem with the limited resources of the earth. It is impossible to produce more products every year when it ruins our forests, climate, biodiversity, clean water, air and soil. Therefore, we better minimize our earthly consuming, and not invest in most of the materialistic industries.
Fortunately, the expansion of the economy doesn’t depend on physical goods (physical bads, as a matter of fact). We have intellectual properties as well – properties like knowledge, thought, and imagination. The non-materialistic property doesn’t seem profitable, until we check which companies are founded on intellectual property.
Here we can find, for example, the companies that deal with content, like Google, Facebook or Netflix. There are also the companies that use knowledge to create software and microchips, like Microsoft, Apple and Intel. In addition, there are pharma companies like Pfizer (that essentially sell mainly knowledge), as well as financial companies like banks, insurance companies and equity firms.
You get the point. The most profitable companies in the world are essentially intellectual property companies. They are the ones that dominate the markets over the last decades. Investing in index funds of Hi-tech companies, for example, can benefit both our wealth and our planet.
Flattening the Pyramid
However, some of these corporations, especially the bigger ones, are not that beneficial. Social content companies tend to show us relatively more fake and hate content than reliable content. In the US, the financial system is still led by the same reckless group who deliberately crashed the economy in 2008, and most financial companies invest our money in destructive industries. Besides, many of the conglomerates use their immense fortunes to push lawmakers into issuing laws that benefit them at our expense.
We better, therefore, invest in small and medium companies.
The ones that actually pay their taxes, without avoiding them through loopholes and agreements.
The ones that employ much more people, with relatively much less under-paid often-replaced workers.
The ones whose money goes back to the community.
The ones that maintain a competitive, diverse and stable market.
Because small and medium companies essentially carry our economy, and our society, on their shoulders. So we better buy index funds of small and medium companies, for society’s sake, as well as for our sake.
In addition, to help most oppressed people in the world, we can invest in funds of the emerging markets of developing countries. This investment, too, helps not only others but also ourselves.
Global Perspective for Personal Prosperity
Over the recent decades, corporations have been inclined to focus only on short-term profits, whatever the social and economic costs have been. Yet, nowadays more and more companies commit to Social Responsibility.
Responsibility, however, doesn’t start and end with one area, so investing in responsible companies is beneficial both for society and for the investors. As you could imagine, socially responsible companies tend to earn more money for their investors.
Another way to help our surroundings is to invest in sustainability. Green energy, green transportation, green products. Over the years, environmental awareness worldwide grows. Responsible governments invest in lowering our ecological footprint. Big environment organizations invest in it too, and numerous people, especially the young ones, also focus on being environmental. Green is where the world is going.
So if we want to thrive, we should support environmental companies. If we wish to profit, we better invest in them, too, because investing in sustainable companies tends to be more profitable.
As a matter of fact, it is entirely our win-win situation: we win as members of society and tenants of the planet – and also win as investors.
The best deal possible.
Taking the Power Back
Money moves the world, the saying goes, and nowadays, it is truer than ever. Whoever receives our money becomes stronger and affects our lives further.
We are always giving our money away: we give it to the people and companies we purchase from. We also give it to the companies we invest in, whether directly or through our pension funds and the like.
When we ignorantly give our money to corporations that pollute our planet, exploit our society, and push our lawmakers into deregulating them – we all pay the painful prices.
But we can, and should, be smarter than that.
We better support the companies who strengthen us, not the ones who undermine us.
We better invest responsibly and sustainably. For our benefit, and the benefit of our world.
We better make, with our money, one good decision at a time.
One good investment at a time.