You’ve probably heard the term “Mutual Fund” before. Maybe it was in passing at work or around the dinner table with your in-laws, but there was never any real clarity around what they actually are, so you never looked into them. You’re not alone. A little over a year ago less than half of U.S households owned some kind of mutual fund. Understanding what a mutual fund is, paints a clearer picture of why it can be an asset for your financial goals and opens the door to new investment opportunities like ESG Funds! We’ve done our best to present you with the mutual fund basics so you can decide whether or not you’d like to join our bandwagon.
What is a mutual fund?
Mutual funds have a complex name, but they aren’t as overwhelming as they sound. Essentially, a mutual fund is a collective investment that pools money from multiple investors. That money is then used to purchase a variety of securities like stocks or bonds. By joining a mutual fund you’re purchasing a share of those collective investments.
Why are mutual funds used for?
People join mutual funds for a variety of reasons, and sometimes new investors don’t even have a good understanding of what they are before joining! Here are some of our favorite reasons from TD Ameritrade for joining a mutual fund.
- They allow you to create a diversified investment.
- They are managed by a financial professional.
- They allow investors to participate in a wide variety of investments.
How do I get started?
The simplest way to start investing in a mutual fund is to find a financial advisor or investment management company that you trust. Knowing who you should choose to manage your mutual fund shares depends on your personal values and goals. Here are a few things to consider.
- Do you value human relationships? Some management companies are completely online and primarily interact with their clients using artificial intelligence (ai) software. However, these Robo Advisor companies don’t allow you much control over what kinds of funds are available to you. The other option is to opt for a company that handles their business face-to-face and is interested in getting to know you and your goals.
- Do you want to know your investment is contributing to positive change? You can join any mutual fund available to you, but there are some that are more ethically sound than others. Knowing that your money is going towards a noble cause like environmental protections, human rights & diversity, or global peace efforts is an added bonus to your investment. Besides, no one wants to admit their booming investment is actually at the hands of companies with poor morals.
- How much do you want to contribute to the start of your investment? If you’re about to invest in your first mutual fund you’ll need to determine how much money you want to contribute to open your account. Some management companies have investment minimums, and won’t take clients who can’t afford to meet that amount. Other companies, like us, opt to have no investment minimum in order to get as manypeople on the right financial path as possible.
Connect with us if…
If you want a management company that operates face to face, ensures your investments align with your values, and has no investment minimum, we think we’d be a great match for you!
We’re eager to get to know you and learn what goals you’re working towards and apply our services accordingly. To learn more about what we do, where we come from, and how we can help, visit our website and connect with us today!
With 2021 only a few weeks away, our New Year’s Resolutions are right around the corner. Managing a budget, meeting our financial goals, and improving our financial health is an important ambition for many of us.
So, how can we prep for financial success in 2021?
As we’ve heard a lot over the last year, 2020 has been full of many unprecedented events. We’re all facing new challenges. Many people have faced unforeseen financial struggles this year; there are still more than 20 million Americans without any or enough work.
There is no magic budgeting trick to mitigate the losses we’ve encountered this year. So, however you choose to manage your personal finances, our number one tip for success in 2020 is to be kind to yourself and your neighbors.
Here are some of our best budget approaches for 2021:
1. Essentials-Only Budget
If you’re under financial strain this year, you’re not alone. If you’ve lost your job, had a medical emergency, or been dealt with other unforeseen expenses, you might be looking to cut your spending as much as possible. An essentials-only budget can help you reduce your expense for a short time while you get back on your feet.
2. Intentional Spending
Intentional Spending is the practice of money mindfulness. This can help you cut costs and align your finances and your values. To start spending intentionally, create a list of your personal values and financial goals. Then, go through your finances to see where your spending doesn’t match your intentions.
An intentional budget is not a joyless one. Including expenses that motivate you and uphold your values can keep your budget realistic. If a cup of coffee from your favorite local cafe brightens your morning, add it to your budget.
This budgeting rule allocates 50% of your finances to your needs, 30% to your wants, and 20% to future you. First, your needs are things like bills, groceries, housing, or transportation. Next, wants are things like going out with your friends or your favorite streaming services. Finally, future you includes debt payments, savings, and investing.
This budget can help you build a healthy relationship with money without spreadsheets calculating every penny you spend. You can budge the rule a little to help meet your needs. For instance, maybe your needs move up to 60%, making your budget more of a 60/25/15. That’s ok! Or, for you, maybe Spotify is a need to get work done.
Overall, this budget is meant to help you build your personal finances for future you. Money can seem scary, but it doesn’t have to with easy budgeting tricks and tips.
4. One-Number Approach
For budget beginners, this easy approach can help you understand your finances. Start with your monthly take-home pay. Then, subtract all your fixed expenses including housing, subscriptions, savings/investments, and more. Finally, take that number and divide it by 4.3 (the average number of weeks in a month. This is your one number — all you have to do to stay on budget is keep your weekly expenses under that number.
5. Blogs, Podcasts, Books, and More
Maybe you already have a budget in place but are still looking for money-saving or investment advice. Where do you go?
For a variety of budgeting ideas, check out a blog like Mr. Money Moustache. Mr. Money Moustache helps you get your finances in order with inspiration, tips, and tricks for anyone getting their finances together. If you’re in search of a more focused discussion on personal finance, opt for a book like The Index Card: Why Personal Finance Doesn’t Have to Be Complicated.
Social media is another great place for resources on budgets, investments, and finance. Check out Invested Interests on Instagram. Our #FinanceFriday posts will provide your feed with weekly financial updates.
Whatever combination of budgeting tips you use, make sure your finances work for both present you and future you. By building up your savings account and investing now, you can help alleviate future financial strains.
In addition, opting for socially responsible investments can help ensure your dollars support you and your values. If your ready to start your ethical investing journey, call us or send us an email! We’re here to help answer your investing questions and get you started with an investment portfolio that works for you.
This topic hits a little different for us. Investing in Peace is so closely related to the story of Invested Interests. Whether you’re talking about investing in companies who make efforts to support non-violent negotiations or divesting from companies who turn a blind eye, supporting peace efforts with your portfolio is something everyone should pursue.
We don’t often talk about our story, because well we like to shine the spotlight on those who need it most but today, our story and our topic of discussion go hand in hand.
The passion behind invested interests began in 2003 with news of the Darfur Genocide. During this crisis, the Janjaweed began slaughtering, raping, and torturing Darfuri men, women, and children in Western Sudan. To take a stand against these atrocities, the Sudan Divestment Task Force led universities, endowments, and other institutional investors to divest from companies supporting the regime.
Invested Interests worked with the Sudan Divestment Task Force to make their divestment list available through online tools and portfolios that helped individuals investors avoid the targeted corporations. Divesting in specific companies, like Schlumberger and PetroChina, has had a significant impact in the region. And while human rights in Sudan remains a pressing issue, progress has been made since 2008.
Support Peace with your Portfolio
At invested interests, we take two approaches when it comes to supporting peace. We focus on good companies to invest in and bad companies to divest from.
We believe that companies can play a positive role in promoting peace and limiting conflict around the world. Our peace portfolio follows the following guidelines to ensure your hard-earned money makes the biggest possible impact.
We invest in: Companies promoting conflict resolution, companies promoting international relief efforts, and companies with no regime affiliations.
We divest from: Guns and weapons dealers and manufacturers, companies working with regimes in armed conflict, and companies with military contracts and war profiteering.
Why you need to invest in Peace
According to the world population review, there are currently 232 countries currently at war. Some of the biggest conflicts within that list are those that are occurring in Afghanistan, Yemen, and Syria.
In 2019 alone, this seemingly never-ending war claimed over 41,700 fatalities. Although this war has been on and off since 1978, this current phase has been ongoing since 2001.
The war in Yemen began five years ago and is estimated to claim over 233,000 lives by the end of 2020. The United Nations has called this conflict one of the “greatest preventable disasters facing humanity”.
The on-going conflict in Syria has been declared the second-deadliest war of the 21st century. This civil war began in 2011 and today has approximately 500 U.S. troops deployed in the country. According to the Council of Foreign Relations, this conflict has internally displaced 6.2 million people.
You can make impactful choices
Oftentimes it’s really easy for us to turn a blind eye to what is happening in foreign countries. We simply get lost in the internal issues we see in our daily lives. However, just because we don’t feel the ramifications of these conflicts, it doesn’t mean we can’t have a positive impact. If you’re unsure what companies are included in your investment portfolio, it’s hard to determine whether or not your financial assets are contributing to peacebuilding efforts.
Through impact investing, you not only have peace of mind that you aren’t indirectly supporting armed conflict, but you’ll have confidence in knowing your investments are doing the most to make a positive impact. If you’re unsure how to start impact investing or are curious about other ethical investment strategies, we’d love to get in touch. Connect with us today to start making an impact with your investments.
Earth to readers! As a global pandemic is in full effect, it is essential not to forget about another worldwide crisis that has been unfolding way before the pandemic: climate change.
Global warming is not something new, human activity started influencing climate change in the 1830s. While the industrial revolution may have had its advantages like creating more job opportunities or inspiring innovation, as we began to industrialize, we also started to change our atmosphere’s chemistry by emitting large amounts of CO2 and other pollutants to our air. It is important to note that industrialization was not the only contributing factor to global warming. The coal industry, for example, on its own, generates 1.7 billion tons of carbon emissions every year. We know for sure (backed up by science) that humans have contributed to climate change.
Where are we now?
During the 2016 Obama administration, the United States joined the Paris Agreement. The Paris Agreement is an agreement in which at least 55 countries representing at least 55 percent of global emissions formally join and aim globally to respond to the threat of climate change. Joined parties are required to report their emissions and their implementation efforts regularly. Unfortunately, as of June 2017, the Trump administration decided that the United States will cease all implementation of the Paris Agreement. As a country, political decision-makers are currently not taking action towards climate change as our current president believes global warming is a hoax. However, the Mercator Research Institute on Global Commons and Climate Change report that around 42 Gt of CO2 is emitted globally every year (1332 tonnes per second), predicting that the CO2 budget will be depleted in just over seven years.
With the recent presidential election, the president elect, Joe Biden, said he would apply to rejoin the Paris Agreement on his first day in office. Following the reapplication, he “would lead an effort to get every major country to ramp up the ambition of their domestic climate targets.” This news brings a new sense of hope for climate change and the future of our earth. But what can YOU actively do to reduce your carbon footprint?
What can we do?
While climate change solutions are necessary globally, you can actively do things to reduce your carbon footprint. You can start by measuring your current carbon footprint through a carbon footprint calculator. Once you have figured out your carbon footprint, you can implement ways to reduce it, including thrifting clothing instead of buying fast-fashion, buying local produce, or even carpooling when possible.
Climate Change Investing
To ensure that our financial investments are not funding an unsustainable future. It is critical to divest from companies using fossil fuels, creating nuclear waste, and destroying natural resources. Invested Interests, helps you identify those environmental funds. Invested Interests environment portfolio invests in green companies, alternative and renewable energy companies, and companies promoting sustainability.
What is an investment portfolio?
An investment portfolio is a compilation of investment opportunities usually managed by an investment advisor and focused on a specific theme. Portfolios are sometimes likened to a basket that holds a variety of assets, including stocks, bonds, cash, and more.
You can manage your portfolio yourself or hire a company to do so. Hiring a financial advisor to build and manage your portfolio has many benefits. A good advisor is knowledgeable about your financial options and can help tailor your portfolio to your specific goals.
Why opt for a portfolio?
Investment portfolios help balance financial security and potential. By investing across a diverse range of assets, your finances will better weather the ups and downs of the market. And, by investing, you can increase the potential wealth growth significantly more than by simply placing your money in a bank account.
In addition, a portfolio managed by an investment firm can give you even more options and security. Having a financial advisor means more options and knowledge to build your portfolio specifically for you. A good investment firm understands the market and can help you build a strong portfolio focused on your individual goals.
How do I choose the right portfolio?
The most important part of choosing a portfolio is making sure it reflects your financial goals. As ethical investors, our financial goals generally include supporting our community and investing in our values.
Looking at investment portfolios can be overwhelming. We recommend looking for a portfolio that aligns with your areas of interest. If you’re passionate about inclusion and equity, check out a portfolio focused on human rights and diversity.
What portfolios does II have?
Invested Interests portfolios focused on the environment & sustainability, human rights & diversity, and peace. We realize that everyone’s financial goals and values are different. At Invested Interests, our financial advisor will help build your unique portfolio.
Not sure where to start, check out our overview of socially responsible investment portfolios. If you’re looking to start your investing journey or have questions about investing with us, give us a call or send us an email. We’re happy to help you out.
Why is it important to Invest in Diversity?
Investing in diversity means supporting companies that regularly showcase their focus on equity and inclusion. This could include companies focused on raising up the voices’ of women, LGTBQ+ people, and people of color.
We still have a long ways to go to dismantle prejudice in the United States; however, supporting diversity and inclusion in the workplace is a critical first step. Having diverse leadership within a company means that more voices and perspectives are included and listened to.
How does Invested Interests Invest in Diversity?
Invested Interests has an investment portfolio curated around Human Rights and Diversity. This portfolio helps our clients support companies that promote human rights and diversity, which are more open to new ideas and perspectives and usually place a greater emphasis on merit.
The portfolio focused on companies promoting fair and equal working conditions, companies supporting safe working conditions and just labor practices, companies with diverse boards and diverse senior leadership teams, and companies that promote women’s rights and equal rights (like the #MeToo movement or LGBTQ movement).
In addition, the portfolio avoids oppressive regimes, companies that do business with governments or regimes that suppress free speech, companies with little or no workplace diversity, and companies that have had diversity-related controversies, like sexual harassment or racism
Finally, choosing an investment portfolio that supports your values is key. Invested Interests can support your investment efforts in diversity, peace, and sustainability. Learn more about how you can begin investing in diversity.