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Posted by on Oct 14, 2014 in Blog, Finance & Money | 0 comments

Being A Socially Responsible Investor: Your Money, Your World.

When you have strong feelings about something that you believe is important to our world–the preservation of natural environments for wildlife, the use of alternative energy, human rights, or anything else–you don’t want to invest your money in a company that violates your beliefs. Learn how being a socially responsible investor might be right for you.

It’s Not All About The Money

Yes, you want to make money. You wouldn’t be investing if you didn’t think that you could increase your future retirement fund. 

However, when you decided to invest in your future and the future of the world you live in, you have to accept the possibility that the financial returns on your investments might be lower than if you simply hand your money to an investment firm, shut your eyes and say, “Put it where it will make the most money.”

The reason the returns on your investments might be lower when you decide to invest in a socially responsible way is that the companies that support your beliefs may not be big enough (yet) to have the same revenues that larger firms do.

What Is A Socially Responsible Company?

Social responsibility is still a new concept in the corporate world, but it’s basically a belief that a corporation has a duty to contribute to the communities it’s in, the country as a whole, or even the entire world.

For some corporations, that means taking some of their profits and giving it to someplace most people would see as important. An example would be a company that takes 1% of all its sales and gives that amount to a charity that feeds the hungry.

Then, that company publicizes what it’s done, and the publicity makes people more inclined to buy more from that company later. The small amount that the company contributes toward the charity doesn’t make a big dent in its profits, and the money it earns by publicizing its charitable efforts actually helps profits in the end.

It’s a cycle that both benefits society and benefits the company, in the long run.

Other companies take the idea of corporate responsibility even further and put their social responsibilities first, their profits second. An example would be a company that only uses beef that hasn’t been treated with steroids in its food, even though that beef costs more.

The company can pass a little of that cost onto consumers by pricing its food higher but has to absorb some of the cost itself. That reduces its profits quite a bit, especially because those sorts of companies tend to be smaller than their competitors.

Where Do You Start?

Luckily, it’s easy to figure out where to invest your money in order to be socially responsible. You can do several things:

  • Check listings online through sites dedicated toward the socially responsible investor.
  • Check with any organizations you support for a list of its donors.
  • Look through a company’s website to see what it says about its investments
  • Talk to your investment company. If you use an investment firm, you want to make it clear what you are, and are not, willing to invest in. For example, you could tell the investment firm that you don’t want to invest in any tobacco companies because you believe smoking is bad, but you want to invest in natural hemp products where you can.

There are a lot of small ways you can do your part to change the would that you live in, but one of the most effective ways is giving your financial support to companies that believe in the same things that you believe. It’s your money, after all. Why shouldn’t you invest it where you think it’s going to benefit both you and your world?

For more information, contact Painter Smith and Amberg or a similar investment firm.

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