Hey now, it’s still January, which means you still have time to set a resolution for the new year. Our suggestion? Make 2021 the year that you start investing! Although it sounds daunting, making the decision to invest can have you reaping in benefits for years to come. Unfortunately, there are five common excuses or investing misconceptions, that often scare smart individuals like yourself away from their investment journeys. We’ve gone ahead and debunked the five investing misconceptions that are likely to be holding you back.
I need a lot of money to get started.
Wrong. If everyone who ever decided to invest their money already had heaping piles of it to start with, there would be very little motivation to invest in anything at all. The point of investing your money is taking a sum from your savings, that you’re comfortable with and that isn’t doing you any good by sitting dormant, and placing it somewhere where it can grow into a mountain you’re able to stand on. As a company, we understand that it’s hard to see such a large chunk of money leave the safety of your saving account, so we’re not opposed to starting off with lower sums! We operate with a no-minimum investment policy and are committed to helping turn your financial molehills into mountains.
I don’t have enough time.
This one will stop you every time. In today’s face-paced world it is so easy to look at your color-blocked calendar and never-ending to-do list and say “I’m booked”. This mentality won’t just stop you from investing, but it can put you in a rut of only doing what you are obligated to do, and never scheduling in time for what you want to do. Your goals matter and they deserve to occupy some of your time. At Invested Interests, we try to make this process a bit easier by breaking down the process into smaller increments of time. For example, to get things started with us, all we need is a 5-minute phone call.
I can just start later.
Eh okay, technically this isn’t untrue, but it’s not our favorite mentality. You can start investing today, tomorrow, or five years from now, but depending on what stage of life you’re in – waiting around for tomorrow to come might not do you any good. The more time you have to let your investments mature, the better. So, by putting off your start day you could be seriously impacting the quality of your returns.
I won’t get a say in where my money goes…
We are so honored to be the first to tell you that this is not the case anymore, especially not when you work with us. Impact investing not only allows you to decide where you put your money, but it also clarifies the impact that your money can have on specific causes that matter to you. Whether you’re interested in the environment, human rights & diversity, or peacekeeping efforts we have a portfolio ready and waiting for you.
I don’t know enough to get started.
That’s why we’re here. We understand that financial knowledge is something you adapt and evolve over time, so not everyone has the same stuff stored in their brain when it comes time for them to start out. Our team has zero predetermined expectations for you when we meet. You tell us what your goals are, and we lay out a few ways to help make them happen. So don’t fret! This is a judgment-free zone.
Aside from helping our clients get great results and make bigger impacts, we are also passionate about educating our online audience about different investing strategies, trends, and terminology. If you’re looking to increase your financial or investment knowledge, check out our other blog posts and follow us on social media!
So there you have it, these 5 investing misconceptions no longer stand in your way! Give us a call today if you’ve decided that you’re ready to invest, Our team is looking forward to getting to know your values and financial goals.
Well folks we’ve got a long-awaited topic to tackle today. Out of all of the questions that come across our desks there is one to rule them all, “Does impact investing lead to lower returns?”. It’s a really good question, so believe me we aren’t knocking you for asking, honestly, it’s something we’d be asking too if we weren’t so immersed in what we do for forty hours a week. The short answer is no, absolutely not. Now at this point you could just take our word for it and carry on with the rest of your beautiful Sunday plans, but if you’d like us to put our money where our mouth is we’ve done that too.
What is impact investing?
Impact Investing as a term has taken on a variety of definitions, but essentially it is a type of investment strategy that includes intentional investments that generate positive, measurable social and environmental impact alongside a financial return. That’s right, read that again, alongside, not instead of, meaning that by definition you can expect to see returns.
“It turns out that investing in solutions to social problems can be profitable.” – Alex Lamb, partner with New Summit Investments in Manchester, Massachusetts, a fund-of-funds manager of private market impact funds.
You can become an impact investor by opening one of many investment accounts available to you from an IRA for retirement to joint investment accounts or individual investment accounts. Now the reasons why people chose to become an impact investor varies from person to person. Sometimes people are tired of not knowing where their money is going, they want more control over the impact they make, or they are just curious to see what we’re all about.
Where did it come from?
The term impact investing was coined back in 2008 by the Rockefeller foundation when the conversation started to emerge about how to use capital differently. Around the same time, we began to see new terms around the same concept come to life from socially responsible investing, to ESG Funds, and ethical investing. Although these terms are distinct from each other, they all work to serve the same purpose – aligning your financial growth with the impact you want to make on the world around you.
How is Impact Investing doing today?
Research shows that socially responsible investing funds have done better in the last 20 years than traditional investing funds. So why don’t more people talk about it? Well, most financial advisors have been taught or have worked with the understanding that investing should only be about making money, which at a fundamental level isn’t a bad way of thinking. However, times are changing and in the world, we currently live in you no longer have to settle for making money or doing good things for the world. As an impact investor, you can have it all (if you have the right coaches helping you along the way).
If you’re more of a numbers person, here are some stats that we hope soothe your worries.
- The MSCI KLD 400 Social Index is composed of companies with high ESG ratings and avoids companies incompatible with specific values-based criteria. This index, which is the oldest ESG index in the US, has shown that ESG can create added value – by outperforming the S&P 500 for the last 25 years.
- A review by the German investment fund DWS and the University of Hamburg of more than 2,000 studies, for example, found that 63% showed a strong correlation between ESG performance and positive returns, while 10% showed a negative effect.
- In its August 2019 report Sustainable Reality, Morgan Stanley concludes: “We found that sustainable funds provided returns in line with comparable traditional funds while reducing downside risk. What’s more, during a period of extreme volatility, we saw strong statistical evidence that sustainable funds are more stable. Incorporating environmental, social, and governance (ESG) criteria into investment portfolios may help to limit market risk.
- Socially responsible investing is the fastest-growing segment of the investment management world.
You absolutely can make an impact without sacrificing returns. If any of this has piqued your interest, we’d love to sit down with you and discuss how this investment strategy can fit into your life. Whether you’re passionate about impacting the environment, global peace efforts, or human rights & diversity efforts we’ve got a portfolio for you. Our team can help you get started on your impact investment journey in just five minutes, so reach out to us! We’re excited to coach you through the next great step in your financial future.