Author Topic: Soul vs. Economics  (Read 5938 times)

Chewysmum

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Soul vs. Economics
« on: May 30, 2013, 11:16:41 PM »
Hello all,

I'm wondering if perhaps you can give some guidance.

My fiance and I are quite the aspiring moustachians, though we live in NYC for the next year, which makes it quite difficult. We rarely, if ever, go out to eat, go out for coffee, our big indulgence is CrossFit, we bike and walk most of the time, etc.  We are very interested in true environmental causes, such as spending our money supporting local farmers, (even though...bloody hell, grass-fed local meat is dear!) and would like to soon start our own small farm to grow our own food and raise our own meat.

In a twist of fate, a relative died 10 years ago and left me a small fortune, particularly by moustachian standards.  It's been beautifully invested, and has, in spite of paying for college education and numerous other medical and educational expenses, gone up by 20%.

Only recently have I begun to be very curious how the money is invested.  Most of it is invested in Blackrock, but it is also invested in Japan Tobacco, Philip Morris, and several energy companies.  Now, I know Moustachians are highly engaged with Vanguard, which I imagine also would invest in non SRI stocks.  What do you do to make sure your money isn't going to support further reliance on oil and tobacco?  Is there a middle ground? It seems so hypocritical to not buy new clothes because of the environmental impact, and yet invest money in companies that pump out oil by the millions of gallons.

Any guidance would be most appreciated.

nuclear85

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Re: Soul vs. Economics
« Reply #1 on: May 31, 2013, 02:48:34 AM »
There are definitely mutual funds out there that invest only in 'green' companies. Just google a bit for some of them (for example, http://www.the-eco-market.com/green-mutual-funds.html). I haven't looked into it in too much detail myself -- I would imagine you do pay a little more in fees and expense ratios for the privilege. It might be an option if you just can't sleep at night knowing that you're invested in 'evil' companies.

Ozstache

  • Pencil Stache
  • ****
  • Posts: 836
  • Age: 51
  • Location: Oztralia
Re: Soul vs. Economics
« Reply #2 on: May 31, 2013, 03:34:31 AM »
Is there a middle ground?

In my view, no. Soul trumps economics any day.

Chewysmum

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Re: Soul vs. Economics
« Reply #3 on: May 31, 2013, 03:42:33 AM »
Here, here.

marty998

  • Walrus Stache
  • *******
  • Posts: 6377
  • Location: Sydney, Oz
Re: Soul vs. Economics
« Reply #4 on: May 31, 2013, 03:56:01 AM »
There'll always be aspects of any company that you will disagree with. If you took the moral high ground on every investment then you wouldn't invest in anything.

I agree with nuclear85 - you may pay a bit more for green/ethical funds but my gut feel is that they will always tend to outperform due to the nature of the businesses and the reduced risk of bad PR on a range of issues such as employment, environmental etc.

As always DYOR.

limeandpepper

  • Magnum Stache
  • ******
  • Posts: 4482
  • Location: Australasia
Re: Soul vs. Economics
« Reply #5 on: May 31, 2013, 04:02:08 AM »
I chose the "sustainable" option for my superannuation (Australian retirement fund), which invests only in companies that are performing well by financial as well as environmental, social and corporate governance standards.

pom

  • Bristles
  • ***
  • Posts: 288
  • Location: Paris, France
Re: Soul vs. Economics
« Reply #6 on: May 31, 2013, 04:28:30 AM »
There are many ethical funds. Just be aware that not everyone agrees on what is ethical. For exemple an ethic fund may decide not to invest in companies that produces condoms as it encourage pre-marital sex while another one may think that the lack of condoms increases aids in Africa so they invest heavily in those same companies.

My point is that you need to find a fund that is in line with your ethics.

Another way, if you are confortable with investing is to pick and choose the companies yourself.

brewer12345

  • Handlebar Stache
  • *****
  • Posts: 1386
Re: Soul vs. Economics
« Reply #7 on: May 31, 2013, 08:22:44 AM »
I think you have to decide what you find morally objectionable and write it down as part of your investment policy statement.  There are a lot of gray areas and you may have to do a lot of digging to determine whether a particular investment meets your ethical standards.  You may (if you are quite lucky) find one or more funds which match your principles.  Or you may not and then you will have to decide if you wish to hold your nose and invest anyway or learn enough to do your own stock picking.

ScottEric

  • 5 O'Clock Shadow
  • *
  • Posts: 62
Re: Soul vs. Economics
« Reply #8 on: May 31, 2013, 11:22:11 AM »
I tend to be pretty hands off with my investments, I've had some money in a few different funds managed by PAX for a few years.  I don't know how they're performing relative to the market at large, but they're doing WAY better than if I'd stuffed that money into a CD or savings account.  So to me it's a pretty good place to put money I don' t need access to. The fee's are pretty low for SRI style investments which was one of the main reasons I choose them.  They also have a very low minimum starting investment, which was essential to me. 

tooqk4u22

  • Handlebar Stache
  • *****
  • Posts: 2196
Re: Soul vs. Economics
« Reply #9 on: May 31, 2013, 11:37:58 AM »
Is there a middle ground?

In my view, no. Soul trumps economics any day.

I agree with this.  If I am completely against something then I wouldn't be involved in it in any way, fortunately for me I live in and believe in a predominately gray world - very few things are black and white and when you add just one more person to the conversation there are even fewer things for all to agree on.

Only recently have I begun to be very curious how the money is invested.  Most of it is invested in Blackrock, but it is also invested in Japan Tobacco, Philip Morris, and several energy companies.  Now, I know Moustachians are highly engaged with Vanguard, which I imagine also would invest in non SRI stocks.  What do you do to make sure your money isn't going to support further reliance on oil and tobacco?  Is there a middle ground? It seems so hypocritical to not buy new clothes because of the environmental impact, and yet invest money in companies that pump out oil by the millions of gallons.

Any guidance would be most appreciated.

Per above - I find tobacco disgusting and it causes endless amounts of cancer of various kinds, but it is voluntary action by the individual - nobody is forcing them to smoke (peer pressure, advertising may influence it but they don't force it).  Not to mention what doesn't cause cancer these days.

Oil companies - oil runs the world and is great enrgy source, the issue isn't the oil or the companies - the issue is the end uses who don't demand 100/200/1000 MPG vehicles or super effiecient heaters or whatever.  Not to mention oil companies are constantly investing in new technologies to improve thier business to make it safer and cleaner as well as into green technology.  Don't hate the oil companies - hate the car companies.

Its a gray world.

Stachsquatch

  • 5 O'Clock Shadow
  • *
  • Posts: 65
  • Age: 29
  • Location: Pacific Northwest
Re: Soul vs. Economics
« Reply #10 on: May 31, 2013, 01:41:16 PM »
Quote
Oil companies - oil runs the world and is great enrgy source, the issue isn't the oil or the companies - the issue is the end uses who don't demand 100/200/1000 MPG vehicles or super effiecient heaters or whatever.  Not to mention oil companies are constantly investing in new technologies to improve thier business to make it safer and cleaner as well as into green technology.  Don't hate the oil companies - hate the car companies.

Chewysmum

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Re: Soul vs. Economics
« Reply #11 on: May 31, 2013, 03:55:35 PM »
Hi all,

Thank you so much for your thoughtful responses.  I am really looking forward to looking more into socially responsible funds such as PAX, and to more deeply consider what I consider ethical and important.  It is a gray world, but there are some things I can certainly do to try to improve it, or at least, not make it worse.


CrochetStache

  • 5 O'Clock Shadow
  • *
  • Posts: 61
Re: Soul vs. Economics
« Reply #12 on: May 31, 2013, 04:23:34 PM »
I do like that you are interested in living your personal ethics by purchasing the farm and raising the grass fed beef. I know that will be a lot of hard work but so very worthwhile.

Is it possible you can expand upon this by creating a business larger than one farm? Creating a larger national/int'l coop of farmers? Maybe provide loans to other startup organic farmers, etc?

Create something that is more person to person vs the big corporate investing you are doing at this time?

Good luck on your search for the best place for your money.


Oil companies - oil runs the world and is great enrgy source, the issue isn't the oil or the companies - the issue is the end uses who don't demand 100/200/1000 MPG vehicles or super effiecient heaters or whatever.  Not to mention oil companies are constantly investing in new technologies to improve thier business to make it safer and cleaner as well as into green technology.  Don't hate the oil companies - hate the car companies.

- Quote from Ozstache

OzStache - In the US, it was the big oil companies that purchased the railways companies and their lines specifically to dismantle those rail lines which were competition to the cars which used oil.

Joet

  • Guest
Re: Soul vs. Economics
« Reply #13 on: May 31, 2013, 04:24:59 PM »
Call me nuts, my favorite charity is me. Second to that I donate to the foodbanks and finally things like WWF/conservation international.

I completely disassociate my investing life with my personal value system. I love me some exxon and phillip morris, and every other economic powerhouse that is in the broad indexes.

It's probably worth a solid point or 3 of annual return. Not investing in the largest companies just seems silly. What are you thinking you'll depress their stock prices somehow slightly if others join in? Or are voting with your values and dont care either way. Or you think owning indirectly shares in a company that say... I dunno is a GMO/monsanto/related place somehow implicitly makes you guilty of whatever atrocity they commit? I guess that makes sense.

Well, no judgement from me. Just seems silly/short sighted to me. Just buy an index and donate to charity. Or whatever helps you sleep at night I guess.

marty998

  • Walrus Stache
  • *******
  • Posts: 6377
  • Location: Sydney, Oz
Re: Soul vs. Economics
« Reply #14 on: May 31, 2013, 05:50:25 PM »
Call me nuts, my favorite charity is me. Second to that I donate to the foodbanks and finally things like WWF/conservation international.

I completely disassociate my investing life with my personal value system. I love me some exxon and phillip morris, and every other economic powerhouse that is in the broad indexes.

It's probably worth a solid point or 3 of annual return. Not investing in the largest companies just seems silly. What are you thinking you'll depress their stock prices somehow slightly if others join in? Or are voting with your values and dont care either way. Or you think owning indirectly shares in a company that say... I dunno is a GMO/monsanto/related place somehow implicitly makes you guilty of whatever atrocity they commit? I guess that makes sense.

Well, no judgement from me. Just seems silly/short sighted to me. Just buy an index and donate to charity. Or whatever helps you sleep at night I guess.

See but here's the thing....if you and 100 million others choose not to buy their products then they won't be the economic powerhouses that they are. I firmly believe that day will come, it might take some time but it will come, and then where will you be when you are the last person holding their shares?

I fully accept the argument of making hay while the sun shines, but I would be very uncomfortable investing in a tobacco companies like philip morris and BAT which market to children in 3rd world countries. I liken it to a transfer of wealth from poor to rich, rather than the capitalist ideal of growing the pie for everyone.

Monsanto driving farmers to suicide by royally fucking them year after year is another one in my bad books.
« Last Edit: May 31, 2013, 05:52:07 PM by marty998 »

Joet

  • Guest
Re: Soul vs. Economics
« Reply #15 on: May 31, 2013, 07:33:59 PM »
I think using micro-capital such as retail investor $$ being directed away from broad indexes vs some sort of socially engineered index instead is looking at the wrong side of the horse TBH.

if 'everyone' did this institutional investors would be able to realize a 'robber baron' or similar premium if retail investors avoided the sector

It's sorta like trying to stop drug abuse by penalizing the users

TheNessaEmpire

  • 5 O'Clock Shadow
  • *
  • Posts: 10
  • Location: Florida
Re: Soul vs. Economics
« Reply #16 on: May 31, 2013, 08:14:37 PM »
Luckily there are always investment products that will fit within your own personal criteria of what is acceptable for your money and your comfort level. You may not be okay with oil and tobacco making your capital grow. Some people feel the banking or big pharma industries are evil. I personally think Coke and Pepsi have a  racket selling fizzy sugar water as though it should flow from natural springs.

Since we're big on low expense ratios here, I'll suggest the Vanguard FTSE Social Index Fund Investor Shares as an option for socially responsible low cost index investing.

Being diversified is one of the reasons why I like index investing since that I'm not tied to any single company where that company has to match my personal values. I'm a little bit everywhere in a sector or asset class and I don't take it personally when one of the dozens of companies in the index is doing something I wouldn't agree with and that single company represents .02% of my investments.