Investing your money can be a tricky business. There are so many options available and each one of them comes with its own set of pros and cons. So, how do you know which one is right for you? If you’re looking to invest ethically, there are plenty of great ways to do it.
Whether it’s through a more local approach like direct investing or something more broad like impact investing, there are plenty of ways to channel your morals into your portfolio. Voting with your dollar and putting your money where your mouth is isn’t just good advice—it’s a good investment strategy.
After all, the social and environmental impact of the companies we support has been proven time after time as a profitable move for investors willing to think long term rather than focus on quarterly earnings reports.
Read on for an introduction to some solid advice on how to make ethical investments.
Know Your Values
Knowing your values is the foundation of an ethical investment strategy. If you don’t know what you stand for—what you care about—you can’t possibly invest in a way that supports those things.
It’s not enough, for example, to say that you want to invest with ethicality in mind—you need to know what you mean by that. What are the ethical issues that are important to you? Are you concerned about climate change? About fair labour practices? About social inequity? About animal cruelty?
Knowing what your values are is the first step towards an ethical investment strategy.
Do Your Research
A good investment is only as good as the research that goes into it. If you’re going to invest ethically, you need to know exactly what that means in terms of the types of companies you invest in.
Ethical investing is not a catch-all term for investing your money in whatever seems like a good deal at the time. Ethical investors carefully consider the impact of their investment choices on employees, the environment, and the communities surrounding businesses.
Once you understand how each type of investment works—and how each is connected to ethical investing—you can narrow down your choices and make a selection that gives you what you’re looking for.
Set an Investment Budget
Investing ethically is a great way to support causes you believe in while earning a profit—but it can also be risky. Ethical investing is, by nature, a bit less predictable than other types of investing. You could make a profit or you could lose money.
The upside, however, is that ethical investing can also be a more socially responsible way to earn a profit. Keep in mind that, as with any type of investing, there are no guarantees. Yesm ethical investing may be riskier than traditional types of investing, but it’s also a proven way to create positive social and environmental change.
Talk to an Investment Broker
Ethical investing is a very broad term for a lot of different approaches. If you’re looking to invest ethically, you’re not limited to a single strategy. You might decide to focus on socially responsible investing or environmental impact investing or something else entirely.
A good investment broker will be able to help you navigate all the different types of ethical investing and find the one that’s right for you. An investment broker can also help you set up a retirement account and make sure everything you choose to invest ethically is properly accounted for and reported to the IRS.
Summing It Up
Investing can be a great way to boost your savings, but it’s not always easy to find ethical investment opportunities. Many conventional investments are linked to things like sweatshop production, the fossil fuels industry or other practices that most ethical investors would avoid.
But as you can see, there are lots of ways to invest ethically and responsibly – you just need to know where to look.