Socially Conscious Investing for People Who Hate Looking at Financials

Socially Conscious Investing for People Who Hate Looking at Financials

Imagine yourself in your golden years, kicking back in your upscale home with your cozy slippers on your manicured feet and a nice glass of wine on the table beside your favorite chair. If that’s part of your vision for your later years, you may want to consider doing a bit of investing now.

Being the socially conscious individual that you are, just any old investment opportunity isn’t what you’re all about. You want to make money; there’s no doubt about that. But you want to do in a socially responsible manner. That, of course, requires that you delve into the world of financials, and you’d rather have a root canal.

Don’t fret; it isn’t that bad. Socially responsible investing can actually be pain-free and economically productive at the same time.

Choosing socially responsible investments

For an investment to be considered “socially responsible,” the company in which you’re investing must make choices that are conducive not only to profitability but also positively impact the society in which they operate. For example, socially responsible companies may avoid promoting detrimental products such as tobacco. Such a company may promote clean technology developments or alternative energy research and production. Your investment could be made in an individual company or through exchange-traded funds (ETFs) or mutual funds.

Choosing investments that have social responsibility baked into the company’s business model is actually becoming easier for discerning investors. Making “socially conscious” investments is a growing practice, to the point that there are pooled opportunities for investors, from the “dabbler” to those with serious funds looking for an investment deal. Getting into mutual funds or ETFs provides exposure to multiple companies across a spectrum of markets, often with a single investment. When considering investing, be sure to carefully go over the company prospectuses to make certain the company’s philosophies are on a par with your ethics.

The end game in socially responsible investing

The general goals in socially responsible investing are essential and easy to understand: positive social impact and positive financial gain. On its face, the thought sounds great. But investing your hard-earned money requires that a heavy dose of reality accompany those thoughts.

An investment opportunity can promote itself as socially responsible, but that moniker doesn’t automatically equate into a good return on your investment. You’re going to have to bite the bullet and do a bit of assessment on the company’s financial outlook. A plethora of financial investment articles can be easily accessed online. You want to be responsible with your investing, not reckless.

The dreaded disclaimer

You want your investments to be profitable while supporting corporate practices that address societal concerns or environmental issues. When deciding on an investment, especially if you’re investing in a fund that proclaims itself socially responsible, be sure to read the fine print. Some of the larger investments funds touting their social responsibility may contain a disclaimer that allows them to include investments even if a corporation has documented positive and negative social and environmental aspects of its business practices. Ask questions, do a bit of investigating on your own and be sure your financial advisor is up to speed on the type of investments with which you want your money to associate.

Gabby Revel is a freelance writer and editor with over 10 years of experience writing about personal finance, beauty and fashion as well as other lifestyle topics. When she's not writing, Gabby likes traveling and exploring the world. And she loves cats.

 


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