Cooperative Economics | "Impact-First" Investing | Transformative Leadership

My Investing Turmoil in 5 Feelings: Trapped, Angry, Entangled, Disconnected…and Hopeful

When I think about what’s happening in our world, I see wealth consolidation, growing inequality, I see more homeless folks.

Do my investments in corporate America and all the publicly traded companies that are part of the S&P 500 have anything to do with that?

1. I feel trapped.

I’m stuck in the mainstream retirement investing paradigm.

And I want out.

Screen Shot 2018-07-12 at 1.11.19 PMI did all the things I was told. I made smart choices and took advantage of employer’s matching contribution. I put extra money into Vanguard S&P 500 Index Funds. I even put money into the best Socially Responsible Investment (SRI) funds I could find: Calvert, Pax, Domini, TIAA-CREFF.

Every time I review my investments though, I  get frustrated with how entangled I am in the same exploitative economic system I believe is at the root of so many of our problems.

I feel the intense dissonance from what I say I believe in and where my money actually is. It’s a similar dissonance to those times when I eat a burger, even though I know if I skipped it, I would save enough energy to charge my iPhone for 4.5 years.

It’s cognitive dissonance.

The challenge with investing is: where are all the good “happy” meat options?

2. Angry at “Those” People

“Today will be the last day for Stow, Melanie… [and a list of names were read]”

“Please clean out your offices by 5pm.”

I was 22 and it was my first Friday of my first full-time job. I was thrilled because I had basically landed a dream job as an energy researcher at one of the top firms in the world. As the meeting came to an end, I realized that dozens of colleagues were being laid off. Stow  was the renewable energy expert I was most excited to work with. He had co-authored the definitive paper on emerging energy technologies.  Melanie, a single mother with a son in Iraq, who worked with me on getting settled in on the job, selecting benefits, and everything else.

Screen Shot 2018-07-12 at 1.05.56 PMAs I searched for answers, I found many colleagues distraught, but they calmly explained that while we had been a private company, we were recently acquired by a larger publicly traded firm, and the lay-offs were likely an effort to please investors by positioning for company for better quarterly returns.

This was a key moment in my awakening.  The 401(k) options my employer offered got me started on this path. It was a path I wasn’t sure I wanted to be part of, but everybody in my life told me it was the right, smart thing to do.

I think this is how most of us start.

The injustice of how Stow  and my other colleagues were treated jolted me to realize the world was really run by those shareholders – those big banks and folks on Wall Street.

As I’ve continued to reflect on, ask questions, and learn about investing, I realize my ownership of mutual funds and index funds means I’m also one of “those” people.

3. Entangled. We are all Those People

Merely by following the advice of the smartest people around us (as I did, when I was counseled by people I trust and that share my values), we go with the mutual and index fund options we’re offered.

I bet you’re just as entangled as I am. The reality is everyone who owns a mutual fund – even the socially responsible investment (SRI) funds — we own shares of these publicly traded companies that are beholden to our desire to grow shareholder value and deliver a return – ideally on par with the rest of the market.

Because that’s what you and I want when we review our investments, right?

We want the hard earned $250 that we eek out of our monthly budget to turn into $750,000.Screen Shot 2018-07-12 at 1.18.58 PM

With the power of compound interest, we know that if we start when we’re 30 and retire at age 70 and earn an 8% annual return along the way, we’ll get to $750,000.

If we earn an average of 9% return, we’d have more than $1,000,000.

If the average annual return is 5%, then it’s only $362,000.

That’s the power of compound interest (all with the same $250/month for 40 years). It’s also why there’s a whole industry around retirement planning, savings, and so much information about investing.

4. Disconnected. What do we want from our investments?

Well, clearly we want to retire. That’s something that in the past was part of the deal we got when we signed up with an employer — a pension. Today, it’s something we have to build on our own and that’s why 401k and 403b and Roth IRAs and financial advice and investing has become so much more focused on the mass market. We’re getting messages all the time about what we should and shouldn’t do. My hope is that you might take a step away from all of that and join me in asking some bigger questions.

What do we want to be part of?Screen Shot 2018-07-12 at 1.08.02 PM

I still have yet to receive a Google Ad or sponsored social media content that actually takes me to an investment option that really aligns with my values and conscience.

When I think about what’s happening in our world and our country, I see wealth consolidation, growing inequality, I see more homeless folks.

Do my investments in corporate America and all the publicly traded companies that are part of the S&P 500 have anything to do with that?

As a student of economics, a person of faith, and a co-op entrepreneur, I wish I was encouraged to wrestle with these questions more seriously in light of my faith. In the absence of hearing it from the pulpit, I invite you to think with me about these questions as a matter of conscience.

5. Hopeful. Alternatives are Becoming More Accessible

Though I’ve been wrestling with these questions for nearly 10 years — about our mainstream investment paradigm, socially responsible investing (SRI), and alternatives that make sense for me – I’m feeling more hopeful than ever about the options that are emerging.

One of the most inspiring recent things I’ve seen is the movement towards “Community Capital” spurred by recent changes in securities law (JOBS Act), allowing more people to participate in crowd-funding platforms that allow you to make equity investments in small businesses.

Resources that I’ve recently come across include:

  • Locavesting, a website (and book) pointing to many local, alternative and community capital options
  • Investibule, a platform for small firms looking to raise money
  • NC3 – a network & collaborative bringing together champions of community capital to more local, social entrepreneurs
  • New Economy Coalition’s – CommonBound conference & Community Capital track
  • ReValue, a financial advisor trying to integrate community and local capital

Screen Shot 2018-07-12 at 11.58.39 AMScreen Shot 2018-07-12 at 11.59.15 AMScreen Shot 2018-07-12 at 11.59.35 AM

Resources that I’ve integrated into my investing portfolio and urge you to consider in your investing as well:

I admit, some of this takes work. I also believe it’s a tremendous opportunity.

I see it as an opportunity for:

  •  new relationships, (i.e. slow money networking)
  •  to re-weave the fabric of our local communities,
  •  community-wealth building,
  •  building more equitable, prosperous, and just future for our kids and grandchildren,
  •  economic democracy, cooperatives, ESOPs, and other employee-owned firms,
  •  you and I to have a much more meaningful and authentic impact with our investments.

What possibilities could you imagine if half the people you knew took half of their investments and channeled them in ways that really resonated with their values and vision?   What would that world look like?

What path are you looking for?

Drop me a line and let’s discuss. My hope in writing this is that it starts a discussion and leads to new things.

“Do not go where the path may lead, go instead where there is no path and leave a trail.”  — Ralph Waldo Emerson

Will you join me?

I’m eager to build and contribute to communities of people that want to ask, wrestle with, and live into these tensions with more integrity.


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