Is Responsible Investing a dream come true?

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A few months ago a close friend of ours had a conversation with someone about our blog at a barbecue.  That person then mentioned it to their wife who just so happens to work at one of our favorite media outlets and before you know it, after a quick conference call, we were on a plane to NYC on our 3 year wedding Anniversary to participate in a mini-digital documentary with The Atlantic about responsible investing.

Admittedly, we had no clue what responsible investing was.  To our pleasant surprise, that’s exactly what they were hoping for!  We learned what ESG (environmental, social and governance) and SRI (socially responsible investing) stood for and figured we’d pass on more of our lessons with you.  Oh and we’re also super excited for you to see the film so…here it is!

So that should give you a general idea of what responsible investing is and how it works.  To clarify, we don’t personally invest with Nuveen BUT given they are a TIAA company and TIAA manages the Ga 529 plan for our son’s college education, we’re more like long lost…clients?

Our participation in this project wasn’t just a cool opportunity to be in NYC though we did squeeze in a few rounds of drinks to toast to the occasion. Oh and Harlem’s Prince Camron was in the very first bar we went to!  He wasn’t wearing pink tho.

Anyway, while we were filming, the producer asked us some really tough questions that got us thinking specifically about where we draw the line between our investment goals and our desire for social impact.

We spoke about the water crisis in Flint, Michigan, Cape Town, South Africa and the Dakota Pipeline.  We spoke about criminal justice reform and our hopes to see lighter sentencing for non-violent drug-related crimes.  We also spoke about how important it is for people to have access to better quality fresh foods for themselves and their children.  The list of causes that are important to us are a mile long and obviously they all couldn’t fit in the film; especially since it wasn’t just about us.

For days after the shoot, we went back and forth on where to draw the line and ultimately we decided that given our pursuit of financial independence and how inter-connected the systems and pipes of our economy that it’s almost impossible to do.  Sure, we make consumer decisions every day to not shop at certain stores or businesses due to their affiliation, stances on a given issue or representation of people of color.  But ensuring the dollars we own are in no way connected to said companies or systems that we don’t morally align with is way more difficult.

For example, we’re huge advocates and invest heavily in Vanguard index funds.  The primary reason is because they’re a reputable company and their costs are low which leads to significantly higher returns vs. more costly equally allocated mutual funds.  This also means that we own a little bit of practically every major company in the United States.  If we don’t like Facebook’s stance on a given issue, we can’t call up Vanguard and say sell the slice of our holdings that is attached to Mark!  Similarly, we can’t call them and say build me a fund that doesn’t include companies that are operated by CEOs who fund a political agenda that isn’t aligned with our values.  I wish we could…but that’s just not possible.

This is one of the reasons why we were genuinely so excited to learn about responsible investing because if what we know of it is true, it means that we would be able to achieve the same investment performance returns we’ve grown accustomed to, at a cost comparable to what we pay now while ensuring our funds are aligned with our values.  We might also be able to receive reporting on the performance of our funds as well as progress made against a given cause.  If that is correct, then let us be the first to say this is a dream come true.

According to TD Ameritrade, we’re part of the 43% of millennials that are likely to invest according to our beliefs.  We don’t talk about it much but our  desire to make social change is also at the heart of our decision to pursue financial independence and ultimately an early retirement.  Once we are in greater control of our time, we’ll have more of it to give to ourselves, our families and our communities.  Knowing that we can do that without sacrificing the wealth we’ve built over a lifetime is incredibly appealing to us.

Secondly, our hope is that responsible investing will attract new investors who are currently on the sidelines.  We have tons of friends who are so disgusted with capitalism and the bloody murder that many companies and industries get away with that they opt out of all involvement even if it means they sacrifice their ability to multiply their money.  We don’t judge them for decisions because ultimately, it’s their life and their money.  For us though, we’ve not taken such a hard stance.  Rather, our approach is to cooperate in the system wisely and to direct our returns how we see fit.

What about you?  On a scale of 1(low) – 10 (high), how willing would you be to invest in socially responsible funds? Has the thought ever entered your mind?

To learn more about the film and Nuveen, click here.

Photo by Kaniz Sheikh from Pexels

One comment

  1. Wow! Thanks for sharing this. What a great opportunity to help get the word out there. If there was evidence that the returns would be there (which it sounds like it would be), I would be definitely love to invest this way!

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