The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: hybrid on October 04, 2013, 05:55:53 PM
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This is a follow-up poll stemming from the ongoing Walmart discussion below. You may only choose one option. You may not change your vote
https://forum.mrmoneymustache.com/welcome-to-the-forum/do-you-shop-at-walmart/
Please do not participate in this poll if you do not have access to a Walmart. (Feel free to comment below whether you take the poll or not)
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So my brother called while I was vacationing in Palm Desert, CA. He informed me that he was on his way from AZ to Palm Desert for a golf tournament. In his haste to get out of town after work, he'd grabbed his clubs and shoes, but not regulation attire. His tee time was 6:00am the next morning. He wanted me to track down some approriate course wear for him. As it was nearly 9:00pm, I called a local friend. She directed me to the 24-hour Super Walmart (Who knew??). I found a couple of options, and he selected an outfit when he got into town. I then returned the rest to Wal-Mart. That's two trips in one year. Does that count?
The laugh of this story is that my brother has worked for Costco for 25 years and I seldom shop at Wally World. I get what I need at Costco. I deplore WM's treatment of their employees and a number of their supply tactics. But they were there in a pinch, and it wasn't my money.
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The only time I've shopped at Wal-Mart in the last 12 months was when I went on a mountain biking/camping trip to rural Georgia, got a flat, and the only place that sold inner tubes within 30 miles was a Wal-Mart.
I avoid Wal-Mart not only because it's evil, but also because the service (especially the line at the register) sucks.
On a side note, Wal-Mart is trying to build a store in the next neighborhood over from mine, and the community is fighting it (it's an area planned for mixed-use transit-oriented development, but Wal-Mart's developer wants to put in a huge suburban-type parking lot instead).
The perhaps worst part is that there's already a Wal-Mart about 3 miles down the interstate (10 minutes away in a car due to freeway exit configuration; maybe 30 minutes by bike). If they were to succeed in building this one it seems likely they'd close the other one now that they've sucked all the subsidies out of it. Not only would that be detrimental to the surrounding area (which is lower-income and needs the Wal-Mart more than the area around the proposed store does), but it would leave yet another empty shell of a building, adding to the blight.
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What if an individual is pro-Wal Mart? The "personal beliefs influence" seems to conflate the negative and positives (I.e. people who are anti, and shop there in spite of it vote the same as the people who are pro and shop there?).
Am I reading something wrong?
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What if an individual is pro-Wal Mart? The "personal beliefs influence" seems to conflate the negative and positives (I.e. people who are anti, and shop there in spite of it vote the same as the people who are pro and shop there?).
Am I reading something wrong?
No, not at all. This poll will find out exactly two things. One, how much people shop at Walmart. Two, if their personal beliefs influence their decision one way or the other.
We all know that places like McDonalds, Target, etc. all pay about the same as Walmart but Walmart is the lightning rod while other large companies that pay close to minimum wage are not. This poll simply gets to whether personal beliefs come into the decision to shop there. You are right, some people may feel strongly pro-Walmart for various reasons (they provide employment to a class of worker that has trouble finding work elsewhere, their low prices are a boon to the low income community, etc.). But this poll will only determine if the politics of Walmart influences the decision, not which way. I have never heard a soul utter "I won't shop at Target", even though their cashiers are probably making the same money as a Walmart cashier.
I could have teased that out even further, but 15 questions seemed a bit much.
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Target could do much better on wages and benefits. But they do contribute more to the community than Wal-Mart does:
"Target does more proportionately for the community in the form of community grants and charity than Wal-Mart does, and spends considerably less boating about it. According to the company website, which says Target donates more than $2 million a week to local and national non-profit organizations. The company gives grants of $1,000 to $3,000 to community organizations, and shoppers can donate 1 percent of Target REDcard charges to a local school. The website says more than $154 million has been donated to schools since 1997. The company also runs Target House, a luxury residential facility in Memphis where families can stay while their seriously ill children are treated at a nearby medical center.
In comparison, Wal-Mart, with revenue of $288 billion in 2005, donated $200 million (or 7/100ths of a percent) to charities and organizations in 2005, according to its web site."
(Source: http://www.alternet.org/story/35610/target_as_bad_as_wal-mart_you_decide )
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Good info footenote, thanks for posting that.
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I go to Walmart maybe 2 -3 times per year. There isn't one very close to me.
The last time i went was about a week ago because I saw winter coats in their flyer. I didn't like the look of the coats once I got there so I left without buying anything.
Target has just come to Canada a few months ago and one is opening up fairly close to me and I am curious to see how the clothing looks. Usually I just go to Value Village (a thrift store) first if I am looking for clothes and then go to a few inexpensive stores I know. I have looked at clothes a few times at Walmart and I don't think I will bother to go there again in search of any.
Walmart did come in handy when I was selling my apartment about a year ago and had to stage it a little.
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I assume many on this board hope to grow their wealth over time and become FI at some point in their lives. Many (including me) do this through buying stocks. I personally implement this strategy through buying indexed mutual funds and ETFs. Since Walmart is one of the biggest companies in the stock market, it makes up a non-insignificant component of my investments (maybe a percent or so).
My hope for all the companies I invest in is that they turn as much profit as possible to further enrich me. That's just the way capitalism works. I expect most companies are smart enough to realize that maintaining a good social image is key to success (particularly if their sales are primarily to individuals and not faceless organizations).
Judging from the poll responses, I assume about half the respondents shun walmart. Do those same people manage to avoid investing in Walmart and enjoying what I assume these same respondents would consider to be ill gotten gains? I'm genuinely curious how far the socially responsible consumer leitmotif runs in individuals.
Maybe this is too off topic and should be a separate thread?
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Judging from the poll responses, I assume about half the respondents shun walmart. Do those same people manage to avoid investing in Walmart and enjoying what I assume these same respondents would consider to be ill gotten gains? I'm genuinely curious how far the socially responsible consumer leitmotif runs in individuals.
I own Total US Market Index Funds. I don't shop at Wal-mart because I think they're a bit nasty in the way they treat their employees and think that in some cases their presence harms local entrepreneurship.
That said, I also don't smoke cigarettes, but Altria is in the total market index. I do my best to avoid processed foods, but Kraft is in the total market index. I try to eat fresh and organic fruits and vegetables, but Monsanto is in the total market index.
I don't see objecting to a given business' practices and owning them indirectly through an index fund as mutually exclusive, personally. First, I think owning a wide cross section of the entire market insulates me somewhat from individual business practices and I see it more as hitching my hopes to the health of the economy rather than individual components of it. Even so, if I profit from the success of a business I wouldn't own as an individual stock, and turn the gains from that to a mustachian end (living frugally, funneling that money into local businesses, etc.) then in some sense I'm voting with my wallet and turning some potentially ill-gotten gains to a positive purpose.
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I would say my personal beliefs influence my shopping at Wal-Mart. But moreso I'm influenced by the fact that I find going into the stores a soul-sucking and depressing experience, similar to going to the mall. It's too loud, there are too many people and HEB has better options at a similar price. However I'm hardly a purist. Because there is no Costco in my area, I regularly shop at Sam's Club. I'm inconsistent and a bit of a hypocrite that way.
My personal beliefs also influence whether I go to Home Depot or Lowe's first when I'm looking for something, and where I donate my clothes and other household items, but I suppose I do not feel strongly enough to refuse all contact with those businesses when they best serve my needs and I can't find the service elsewhere.
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I don't see objecting to a given business' practices and owning them indirectly through an index fund as mutually exclusive, personally. First, I think owning a wide cross section of the entire market insulates me somewhat from individual business practices and I see it more as hitching my hopes to the health of the economy rather than individual components of it. Even so, if I profit from the success of a business I wouldn't own as an individual stock, and turn the gains from that to a mustachian end (living frugally, funneling that money into local businesses, etc.) then in some sense I'm voting with my wallet and turning some potentially ill-gotten gains to a positive purpose.
That's about where I come down on the issue as well. I'm sure I own coal miners (through Total Market Index or similar) that chop off the top of mountains, dump sludge in streams, and use bald eagle nests for kindling for their campfires to roast marshmallows.
I don't necessarily approve of the conduct, but theoretically that's why we have environmental laws and regulators - to limit the externalities that entities can impose upon public goods. I blame crappy laws or ineffective enforcement if these type of companies are doing bad stuff.
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Judging from the poll responses, I assume about half the respondents shun walmart. Do those same people manage to avoid investing in Walmart and enjoying what I assume these same respondents would consider to be ill gotten gains? I'm genuinely curious how far the socially responsible consumer leitmotif runs in individuals.
*slow clap*
Well said, and I hope it causes some of the people who don't shop there for ideological reasons to either reconsider shopping there or reconsider how they invest.
Also, thanks for the new word. (http://en.wikipedia.org/wiki/Leitmotif)
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Judging from the poll responses, I assume about half the respondents shun walmart. Do those same people manage to avoid investing in Walmart and enjoying what I assume these same respondents would consider to be ill gotten gains? I'm genuinely curious how far the socially responsible consumer leitmotif runs in individuals.
*slow clap*
Well said, and I hope it causes some of the people who don't shop there for ideological reasons to either reconsider shopping there or reconsider how they invest.
Also, thanks for the new word. (http://en.wikipedia.org/wiki/Leitmotif)
I can't agree that choosing to *Not Shop* at Walmart necessitates a moral dilemma when investing. I hold VTI (VTSAX), which holds Walmart, and 3,551 other companies. Walmart represents .65% of the VTI index. I really can't care what VTI holds from a moral perspective. If I want diversification across the US that's my go to shopping stop.
I DO NOT shop at Walmart. I'm not even a big fan of box stores in general. This is because I have seen what these types of business models do to the local economies (especially noticeable in small towns). Box stores are the epitome of a throw away consumerist society. They displace that local in-sourcing society where trust and old-school skills were laudable.
I despise McDonalds, and have boycotted eating there entirely since 31 Dec 1999. It, its ilk, and their 'hook line and sinker formula' (the fat/sugar/salt trifecta) are one of the mainstream obesity epidemic catalysts in America! It is also held in VTI.
Electing to Not Shop somewhere for personal reasons does not necessitate a verboten stance on investing in the company. In fact I almost see investing in these types of companies as a double "fuck you". I choose not to support you (consumerist focused companies) and I take your dividends (from cash that sukkas have given you) - ha ha!
Buying shares in a company (other than the IPO) doesn't have much to do with giving them upstart funding (unless they need to raise capital by offering more shares). Share price is more a barometer of how a company is performing (based on public data). It is consumerist demand that drives the expansion of companies into a town near you. Not whether or not I buy shares in the company.
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That business model is what your capital is doing to America, though. The shareholders are the company.
Your argument about buying shares not funding the company is pretty much entirely false, too - equity capital determines how easily they can get loans, whether or not they buy back stock or reissue treasury stock, how willing employees are to work for stock options and RSUs, whether or not potential acquirees accept stock swaps instead of cash, and whether or not they have a seasoned equity issuance. In short, share price is very nearly everything. It takes a naive view of corporate finance to write all that off and say "well, WMT may be ruining America but at least it's really profitable for me if I don't think about it".
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Judging from the poll responses, I assume about half the respondents shun walmart. Do those same people manage to avoid investing in Walmart and enjoying what I assume these same respondents would consider to be ill gotten gains? I'm genuinely curious how far the socially responsible consumer leitmotif runs in individuals.
*slow clap*
Well said, and I hope it causes some of the people who don't shop there for ideological reasons to either reconsider shopping there or reconsider how they invest.
Also, thanks for the new word. (http://en.wikipedia.org/wiki/Leitmotif)
You're welcome. I was trying to defy the stereotype that people who shop at Walmart have small vocabularies. ;)
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That business model is what your capital is doing to America, though. The shareholders are the company.
Your argument about buying shares not funding the company is pretty much entirely false, too - equity capital determines how easily they can get loans, whether or not they buy back stock or reissue treasury stock, how willing employees are to work for stock options and RSUs, whether or not potential acquirees accept stock swaps instead of cash, and whether or not they have a seasoned equity issuance. In short, share price is very nearly everything. It takes a naive view of corporate finance to write all that off and say "well, WMT may be ruining America but at least it's really profitable for me if I don't think about it".
I am naive wrt to corporate finance! Quite frankly, I don't plan to become any more versed in it either as it would be a waste of time. That is why I invest passively in ETF funds that follow indexes. Whatever the funds hold. Call my perspective that of a lay person (the 99%). I have no moral dilemma with it at all.
It's not just what the box stores do to local environments...it is that a lot of what they sell is utter crap. I don't buy non-consumables with a view to frequent replacement. So why shop there?
Also, if everyone stopped shopping at Walmart...I'd be thrilled! And, VTI wouldn't give a damn...WMT gets dropped, something else moves in...ahhh Darwin :-)
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It's not just what the box stores do to local environments...it is that a lot of what they sell is utter crap. I don't buy non-consumables with a view to frequent replacement. So why shop there?
But investing in them is all good, right?
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I am naive wrt to corporate finance!
That's fine, it wasn't meant as an insult. But there are a lot of nonintuitive ways in which stock price really does matter.
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But investing in them is all good, right?
Ahh...but your statement suggests to me that you are seeing purchase decisions and investment decisions as paired (single option) if then statements.
i.e. "If you don't shop at WMT (for reason X) then you can't invest in it (for reason X)." This is simply not so.
The way I see this argument going is quite simple...one can deconstruct ANY COMPANY and find ethical violations (against someone, somewhere) for one reason or another. One must therefore acknowledge that in the area of investment nobody can take a moral high ground. There are necessarily only areas of grey.
Accordingly:
1) I choose to not directly buy product for my household from certain companies for the reasons stated in my previous posts.
2) I would be happy to toast the day a company that I don't support (for the reasons stated) folds...because it means that the masses are making more thoughtful decisions on planetary resources.... as I said...the index is efficient...Darwinian. I don't care if Blackberry, Nortel or Walmart fold. Something else (hopefully solar power start ups and the like) will replace them :-)
3) Because a company may not align with my values...it does not stop me from investing in an index. Would I buy WMT stock? NO...because it is an easy choice. I am a lazy investor...therefore, the a la carte style of investing (necessary for avoiding companies that are morally offensive to the individual) is not an option. Necessarily, I must basket invest...and I get what the drift net captures...WMT and all.
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The way I see this argument going is quite simple...one can deconstruct ANY COMPANY and find ethical violations (against someone, somewhere) for one reason or another. One must therefore acknowledge that in the area of investment nobody can take a moral high ground. There are necessarily only areas of grey.
It's not really about what one could find to take offense about. It's about what you do take offense to, and you've said you do take offense to Walmart's business practices. "Some people could be offended by some things that some companies do so everything any company does is morally acceptable" isn't really a compelling argument.
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I am naive wrt to corporate finance!
That's fine, it wasn't meant as an insult. But there are a lot of nonintuitive ways in which stock price really does matter.
No offense taken! I know that it is quite complicated...obviously!
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The way I see this argument going is quite simple...one can deconstruct ANY COMPANY and find ethical violations (against someone, somewhere) for one reason or another. One must therefore acknowledge that in the area of investment nobody can take a moral high ground. There are necessarily only areas of grey.
It's not really about what one could find to take offense about. It's about what you do take offense to, and you've said you do take offense to Walmart's business practices. "Some people could be offended by some things that some companies do so everything any company does is morally acceptable" isn't really a compelling argument.
Except..."Some people could be offended by some things that some companies do so everything any company does is morally acceptable"
is not my quote! Nor is it what I'm trying to say. Here is what I'm trying to say: There is no such thing as a moral high ground investment. However, a single investor can do their best to avoid or limit their exposure to companies that they have major issues with. In this global age you cannot eliminate exposure. So, I don't support in the easiest way I know how. For McDonalds...I don't eat there...I tell other people why I don't eat there and some have stopped. In my books that is a win for me. And, as I pointed out...It's actually a double win (as counter intuitive as it may seem...even back stabbing!)...McDonalds pays me cash somewhere deep in my basket of holdings to tell people why they should quit eating there.
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Here is what I'm trying to say: There is no such thing as a moral high ground investment.
There is exactly the same high ground (if you consider there is any) in choosing where to shop.
One would think that a person refusing to shop at a particular store would also refuse to invest their money into that company.
Hell, I'd actually put that as more important: if I were against a company's practices, I'd be sure not to invest in them, and be more likely to occasionally patronize them than invest in them.
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There is exactly the same high ground (if you consider there is any) in choosing where to shop.
One would think that a person refusing to shop at a particular store would also refuse to invest their money into that company.
Hell, I'd actually put that as more important: if I were against a company's practices, I'd be sure not to invest in them, and be more likely to occasionally patronize them than invest in them.
I don't believe there is any absolute correctness in anything we do. So, why pretend there is? Unless you have an example :-)
Let me know how you would index invest without using VTI (US) and VXUS (Everything except US)....to execute the moral code you would propose...rather than the way I suggest?
I don't disagree with you hypothetical take ... except that it is just that...hypothetical.
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Hell, I'd actually put that as more important: if I were against a company's practices, I'd be sure not to invest in them, and be more likely to occasionally patronize them than invest in them.
Do you own any index/total market funds? If yes, do the practices of all constituents of that fund meet with your approval?
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I don't believe there is any absolute correctness in anything we do. So, why pretend there is? Unless you have an example :-)
Then why try to claim a moral high ground on not shopping at a business while simultaneously investing in them?
Hell, I'd actually put that as more important: if I were against a company's practices, I'd be sure not to invest in them, and be more likely to occasionally patronize them than invest in them.
Do you own any index/total market funds? If yes, do the practices of all constituents of that fund meet with your approval?
Yes. Yes, to my level of satisfaction (in other words, not every practice, no, but enough that I'm comfortable investing in them, yes).
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I have never heard a soul utter "I won't shop at Target", even though their cashiers are probably making the same money as a Walmart cashier.
I have said those words, and I do my best to live by them - although I admit there are times where they are the best option (socks, underwear, shower curtains) within biking distance. If my option is drive in a car to the mall or bike to Target, I will bike to Target and hate every second of it. In general I try to avoid big box stores - and cheaply made products altogether. I dislike the environmental destruction, cheap consumerism, political lobbying, and the atmosphere. As a consequence I don't buy much :-)
To be honest, outside of random items and/or groceries I have a hard time understanding why any Mustachian would go into big box stores.
Re investing: I do own index funds but I try to think of it as someone on here once put it - I am investing in the overall economy, not in the actual companies themselves. Further down the line I would like to be as money-independent as possible so as to minimize my exposure but I do not currently have the luxury to follow every personal moral 100% of the time. I would suspect few of us have that ability without adverse concessions.
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I have never heard a soul utter "I won't shop at Target", even though their cashiers are probably making the same money as a Walmart cashier.
I have said those words, and I do my best to live by them - although I admit there are times where they are the best option (socks, underwear, shower curtains) within biking distance. If my option is drive in a car to the mall or bike to Target, I will bike to Target and hate every second of it. In general I try to avoid big box stores - and cheaply made products altogether. I dislike the environmental destruction, cheap consumerism, political lobbying, and the atmosphere. As a consequence I don't buy much :-)
(Emphasis mine.)
You have said you won't shop there, but sometimes shop there?
In other words, the former statement (that you won't shop there) is meaningless?
Re investing: I do own index funds but I try to think of it as someone on here once put it - I am investing in the overall economy, not in the actual companies themselves. Further down the line I would like to be as money-independent as possible so as to minimize my exposure but I do not currently have the luxury to follow every personal moral 100% of the time. I would suspect few of us have that ability without adverse concessions.
(Emphasis mine.)
You can think of it or put it however you want, but it's flat out wrong.
I like to think of investing in index funds as investing in magic fairies that will spread joy and kindness, because why not?
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I like to think of investing in index funds as investing in magic fairies that will spread joy and kindness, because why not?
2 Q's:
1. What's the ticker symbol, and
2. What's the dividend yield
I want some! I bet they hold a diversified basket of butterflies and rainbows, soft furry bellies of kittens and new spring gosling down.
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I don't believe there is any absolute correctness in anything we do. So, why pretend there is? Unless you have an example :-)
Then why try to claim a moral high ground on not shopping at a business while simultaneously investing in them?
(My emphasis above)...Nowhere did I say that I was taking the moral high ground above all others nor did I make a stance of ethical superiority. I was merely (albeit emphatically - I used CAPS after all) demonstrating the logic behind why I seemingly contradict myself. I don't believe that I denigrated anyone's position or personal choice!
moral high ground (plural moral high grounds)
(idiomatic) A position or point of view which is ethically superior or more reputable, in comparison to others which are under consideration.
Again...you are seeing things in black and white! And...you cherry picked my statement! Please find a solution to resolve the hypothetical ethical dilemma you created :-)
an example ... of how you would index invest without using VTI and VXUS ....to execute the moral code you would propose...rather than the way I suggest?
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Please find a solution to resolve the hypothetical ethical dilemma you created :-)
I didn't create it, but here's a solution: don't invest in index funds that hold companies that you morally disagree with.
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I like to think of investing in index funds as investing in magic fairies that will spread joy and kindness, because why not?
2 Q's:
1. What's the ticker symbol, and
2. What's the dividend yield
I want some! I bet they hold a diversified basket of butterflies and rainbows, soft furry bellies of kittens and new spring gosling down.
Totally unethical!!
- Are the butterflies free if they are held in a basket?
- Rainbows can't be captured in a basket...unless it has water and a bit of oil in it :-)
- Are those kitten bellies scalped? Some people would surely object to this!
- Were the spring goslings alive or dead when they were stripped of their down?
This would be the worst, most outrageous stock to ever IPO.
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You have said you won't shop there, but sometimes shop there?
In other words, the former statement (that you won't shop there) is meaningless?
The former statement is an intent to not shop there if at all possible. It is however the lesser of two evils so I have to forgo my morals occasionally, which was the point of the other half of my statement. I am not currently in a position to pay for homemade socks off Etsy or look into the origin of my underwear and every other purchase I make. I wish I was, and I strive to look into everything and everywhere I buy from but at the end of the day that is impractical. Perhaps that makes my former statement (which was said emotionally after Target's campaign contribution, but still said) meaningless, but does it also wipe out my end goal? Must everything be black and white?
Re investing: I do own index funds but I try to think of it as someone on here once put it - I am investing in the overall economy, not in the actual companies themselves. Further down the line I would like to be as money-independent as possible so as to minimize my exposure but I do not currently have the luxury to follow every personal moral 100% of the time. I would suspect few of us have that ability without adverse concessions.
(Emphasis mine.)
You can think of it or put it however you want, but it's flat out wrong.
I'm actually pretty sure you were the one making that argument, although not with those words and possibly not with that interpretation given your reaction. It was in one of the first threads regarding ethical investing and whether that was actually possible. I recognize that it is "flat out wrong" as you say (yes, I am investing in those companies), but it is how I choose to look at things so that I can become financially independent enough to spend my time and money fighting for what I believe in. I choose to view index funds as overall indicators of the stock market - which they are. I fully recognize that is an emotional lens, but my alternatives are to be chained to a desk and only have minimal hours with which to leave a legacy, or reach the point where I have enough time and energy to make a larger difference before I'm too old to do anything about it. Personally, I find the latter to be more ethical and personally motivating - even if I contradict myself at times.
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Please find a solution to resolve the hypothetical ethical dilemma you created :-)
I didn't create it, but here's a solution: don't invest in index funds that hold companies that you morally disagree with.
Still black and white. No solution here. See my solution.
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To be honest, outside of random items and/or groceries I have a hard time understanding why any Mustachian would go into big box stores.
Really? Low prices, good enough quality stuff, potentially the closest store within walking or biking distance?
You can get all kinds of DIY stuff like car and bike items, hardware, and gardening supplies. Is it more mustachian to spend a day riding all over town searching out local stores that probably don't have as much variety and will charge more for most items than a big box store? I'd rather get the suckiness of shopping done and get back to living life in the real world that doesn't involve buying crap. Unfortunately sometimes you need crap.
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I have no dog in this fight; do what lets you sleep at night.
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To be honest, outside of random items and/or groceries I have a hard time understanding why any Mustachian would go into big box stores.
Really? Low prices, good enough quality stuff, potentially the closest store within walking or biking distance?
You can get all kinds of DIY stuff like car and bike items, hardware, and gardening supplies. Is it more mustachian to spend a day riding all over town searching out local stores that probably don't have as much variety and will charge more for most items than a big box store?
For me, the local stores are the same distance away as the big box stores. Local bike shop on my way home from work. Localish hardware store 1.3 miles away (Target = 1.5 miles). I do grant that not everyone will be in the same situation, but it's not as hard as people like to think.
I also don't see how those purchases are in any way frequent enough to use the bundled errand argument. Gardening supplies - once or twice a year. Car and bike is dependent on how much you use both and their relative health, but lets say once every two months. Hardware supplies fall in the same category as gardening unless you are renovating. If you buy a lot of items on a regular basis your argument holds, but those are not the types of items that require regular purchases.
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I have no dog in this fight; do what lets you sleep at night.
Thanks...and exactly! That is what I said way back
That is why I invest passively in ETF funds that follow indexes. Whatever the funds hold. Call my perspective that of a lay person (the 99%). I have no moral dilemma with it at all.
This is how I choose to deal with the dilemma of moral code vs financial independence. I didn't present it to be talked out of or chastised for it. Naturally I also mean no disrespect for your views as well!
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My reply was the second option, my personal beliefs do influence my decision, I shop there a few times a year. My reasons are pretty simple. Not only is Costco a lot cheaper than Walmart, they take much, much better care of their employees. I will always choose them first if I have the option. And I love their business model. No frills, no gimmicks, great prices on quality stuff (often in bulk). It's just win-win-win. But there are still some occasional things I need that I cannot get at Costco, and even though I am no fan of Walmart, the reality is I will ultimately buy my supplies there or from a competitor that isn't paying their employees a significantly different wage than Walmart. So if I have to choose between CVS and Walgreens and Walmart for toiletries, then yeah, I'm choosing the cheaper option. The cashier is making $8 an hour in all three cases. For groceries I cannot procure at Costco I can and will bike to the local store. They have been good to the community and I don't mind spending a very few extra bucks there for a better experience overall.
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If personal beliefs includes not wanting to deal with people if Walmart, then yes. Otherwise no.
http://www.peopleofwalmart.com/
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I personally don't think companies should do anything for the community. I think they should make a profit, pay a dividend to the owners, and let the owners do things for the community, however they want and however much they want.
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Please do not participate in this poll if you do not have access to a Walmart. (Feel free to comment below whether you take the poll or not)
Well crap, I should have read this first. I voted "My personal beliefs do not influence whether or how much I shop at Walmart and I shop at Walmart up to a few times a year." Yeah, there's no Walmarts in Australia, but I can still buy online and have it shipped to my mom, who then ships to me (or brings it in her checked luggage when she visits). When I'm back home in Tennessee and it takes 20-45 minutes to go to a Walmart, we'd go about once a week, maybe more.
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It's not just what the box stores do to local environments...it is that a lot of what they sell is utter crap.
Err... So how does that differ from virtually any store? Most consumer stuff is utter crap to most people.
As to what a big box store does to the local environment, consider how many fewer trips are needed if you put everything under one roof (and how much energy &c is saved on the distribution side, too), how much more energy-efficient a big box store can be than the number of small stores needed to supply the same amount of merchandise...
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I don't believe there is any absolute correctness in anything we do. So, why pretend there is? Unless you have an example :-)
Then why try to claim a moral high ground on not shopping at a business while simultaneously investing in them?
Because the situations are not analogous, no matter how much you keep trying to pretend that they are. Shopping at Wal-Mart is a conscious choice to pick it in preference to every other store every time you go in there. Owning WMT as part of an index fund, on the other hand, is not a choice to prefer Wal-Mart, but rather merely to accept it.
If there were some magic way to fractionally shop at all stores simultaneously, then the situations would be analogous and your criticism of avoiding Wal-Mart would have some validity.
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So the difference is convenience?
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I don't believe there is any absolute correctness in anything we do. So, why pretend there is? Unless you have an example :-)
Then why try to claim a moral high ground on not shopping at a business while simultaneously investing in them?
Because the situations are not analogous, no matter how much you keep trying to pretend that they are. Shopping at Wal-Mart is a conscious choice to pick it in preference to every other store every time you go in there. Owning WMT as part of an index fund, on the other hand, is not a choice to prefer Wal-Mart, but rather merely to accept it.
If there were some magic way to fractionally shop at all stores simultaneously, then the situations would be analogous and your criticism of avoiding Wal-Mart would have some validity.
It's just as easy to not buy an index fund (which contains shares of a company whose practices you don't approve of) as it is to not shop in a particular store.
Easier, for some, whose only close store is a Wal Mart.
You are choosing index funds because you think that's the best way to invest, and damn the fact that it means you are investing in companies you don't support philosophically. Index funds aren't the only way to invest (indeed, they aren't even the most popular, nor are they even the most popular on most personal finance sites - I'd give that title to dividend investing, such as Dogs of the Dow and similar strategies).
You have to buy food, you don't have to invest in a particular company. There are usually alternatives for the latter (other stores nearby). There are always alternatives for the former (invest in a different way).
You're just choosing the index funds because you think it will make you the most money, regardless of what companies are in that index.
That's fine, I'm good with it, it's just disingenuous to then claim moral high ground when you don't shop at that company while investing in it (and then go further and claim you have to way to invest in an index without that company, so your hands are tied.. Hah.)
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Not to mention we live in a world with low-fee actively managed funds. Even if you are a low-fee investor, you can do nearly as well on the expense ratio front with an active fund as the very best index funds.
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Not to mention we live in a world with low-fee actively managed funds. Even if you are a low-fee investor, you can do nearly as well on the expense ratio front with an active fund as the very best index funds.
Maybe in the USA (although I doubt it)...but you'd be downright wrong for investing in Canada. There are two objective measures for why your statement is wrong:
1) Passive investments outperform active consistently. There is no dispute here.
2) Passive investments are SIGNIFICANTLY lower wrt MER. There is no dispute here.
A little something for you on this: http://www.moneysense.ca/columns/putting-the-portfolio-odds-in-your-favour (http://www.moneysense.ca/columns/putting-the-portfolio-odds-in-your-favour)
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Not to mention we live in a world with low-fee actively managed funds. Even if you are a low-fee investor, you can do nearly as well on the expense ratio front with an active fund as the very best index funds.
Maybe in the USA (although I doubt it)...but you'd be downright wrong for investing in Canada. There are two objective measures for why your statement is wrong:
1) Passive investments outperform active consistently. There is no dispute here.
2) Passive investments are SIGNIFICANTLY lower wrt MER. There is no dispute here.
A little something for you on this: http://www.moneysense.ca/columns/putting-the-portfolio-odds-in-your-favour (http://www.moneysense.ca/columns/putting-the-portfolio-odds-in-your-favour)
I'm not going to argue passive versus active (I'm actually on your side on that), but the point is that you're putting that above your moral "I don't support Wal Mart's practices."
That's fine, but don't try to weasel out of it by saying you have no choice. You do have a choice, and you choose the higher profits that are available vis passive index funds over investing solely in companies you philosophically support.
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I don't believe there is any absolute correctness in anything we do. So, why pretend there is? Unless you have an example :-)
Then why try to claim a moral high ground on not shopping at a business while simultaneously investing in them?
Because the situations are not analogous, no matter how much you keep trying to pretend that they are. Shopping at Wal-Mart is a conscious choice to pick it in preference to every other store every time you go in there. Owning WMT as part of an index fund, on the other hand, is not a choice to prefer Wal-Mart, but rather merely to accept it.
If there were some magic way to fractionally shop at all stores simultaneously, then the situations would be analogous and your criticism of avoiding Wal-Mart would have some validity.
It's just as easy to not buy an index fund (which contains shares of a company whose practices you don't approve of) as it is to not shop in a particular store.
Easier, for some, whose only close store is a Wal Mart.
You are choosing index funds because you think that's the best way to invest, and damn the fact that it means you are investing in companies you don't support philosophically. Index funds aren't the only way to invest (indeed, they aren't even the most popular, nor are they even the most popular on most personal finance sites - I'd give that title to dividend investing, such as Dogs of the Dow and similar strategies).
You have to buy food, you don't have to invest in a particular company. There are usually alternatives for the latter (other stores nearby). There are always alternatives for the former (invest in a different way).
You're just choosing the index funds because you think it will make you the most money, regardless of what companies are in that index.
That's fine, I'm good with it, it's just disingenuous to then claim moral high ground when you don't shop at that company while investing in it (and then go further and claim you have to way to invest in an index without that company, so your hands are tied.. Hah.)
Arebelspy - I'm glad you found your dog!
It's just as easy to not buy an index fund (which contains shares of a company whose practices you don't approve of) as it is to not shop in a particular store.
Bollocks! Not if you want to mitigate risk. After all, I'm here to enjoy (read low stress) the journey towards early FI. I will passively (index) invest. There are few options here that take little of my time. I've outlined my option somewhere above.
You are choosing index funds because you think that's the best way to invest, and damn the fact that it means you are investing in companies you don't support philosophically. Index funds aren't the only way to invest (indeed, they aren't even the most popular, nor are they even the most popular on most personal finance sites - I'd give that title to dividend investing, such as Dogs of the Dow and similar strategies
I agree! They are the easiest way to invest for the reasons I outlined in the post response to grantmeaname above! Of course there are other choices. There are always other choices. I understand what you are hammering on about here. However, the black and white I keep coming at you with is with respect to the way that I SEE THIS CHOICE from a philosophical standpoint. Firstly, I tend to do a lot of research when I make any significant choice (house, investments etc). When I come up with an objective set of reasons for choosing one investment strategy that fits my criteria...that's the one I choose. There are always pros and cons in the list of any choice we make. Usually, we choose something on the basis of the pros outweighing the cons. So, in this case, the philosophical issue I have with companies like WMT are outweighed by the pros. Furthermore, I can set up a mitigating subset of choices for Walmart itself. This, I outlined above. I offset the con of investing with the company in my index basket by NOT CHOOSING to shop there. This, in my view is making the best choice given my views. Bear in mind, I am not some sort of hard core follower of philosophies - there is such a thing as flexibility in exercising the choices we make. To be rigid in any view is stressful and counter productive to the anticipated outcome (happiness and FIRE).
You have to buy food, you don't have to invest in a particular company.
Not true: You can forage, grow your own and barter. True: You don't have to.
That's fine, I'm good with it, it's just disingenuous to then claim moral high ground when you don't shop at that company while investing in it (and then go further and claim you have to way to invest in an index without that company, so your hands are tied.. Hah.)
Not claiming moral high ground...nowhere is that suggested. Merely making the best personal choices that I can under the conditions I work within. Hands not tied.
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1) Passive investments outperform active consistently. There is no dispute here.
There's entirely a dispute there. The best predictor of investment returns is fees, not strategy. What you meant to say is that funds with low expense ratios outperform funds with high expense ratios consistently.
2) Passive investments are SIGNIFICANTLY lower wrt MER. There is no dispute here.
Read a little more attentively. I said 'some actively managed funds have low fees', not 'on the whole actively and passively managed funds have the same fees'.
I'm not going to argue passive versus active (I'm actually on your side on that)
Do you have any evidence that passive funds as a class outperform active funds as a class without fees taken into consideration? Or any other reason to suspect that a low-fee index fund would outperform an equally low-fee active fund?
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1) Passive investments outperform active consistently. There is no dispute here.
There's entirely a dispute there. The best predictor of investment returns is fees, not strategy. What you meant to say is that funds with low expense ratios outperform funds with high expense ratios consistently.
2) Passive investments are SIGNIFICANTLY lower wrt MER. There is no dispute here.
Read a little more attentively. I said 'some actively managed funds have low fees', not 'on the whole actively and passively managed funds have the same fees'.
I'm not going to argue passive versus active (I'm actually on your side on that)
Do you have any evidence that passive funds as a class outperform active funds as a class without fees taken into consideration? Or any other reason to suspect that a low-fee index fund would outperform an equally low-fee active fund?
Untrue. It is a combination of fees and strategy. I don't think you read the link I sent...and, more importantly the research papers linked within it! Also, why would you dismiss half the equation? The fee side? That makes no sense.
Here is a direct link to just one paper: http://www.rickferri.com/WhitePaper.pdf (http://www.rickferri.com/WhitePaper.pdf) Note there are about 17 references at the end of this paper if you feel like reading EVEN MORE about this debate...I'll let arebelspy provide more on this too...since we are in agreement on this aspect of things :-)
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The Rick Ferri whitepaper you linked, his blog on the whole (which I've been reading for over a year), and literally every other analysis of passive vs. active I've ever seen in about a hundred hours of reading on investments has compared low-fee index funds to the higher-fee general active mutual fund category. I explicitly addressed that already in my last post.
Edited to add:
Also, why would you dismiss half the equation? The fee side? That makes no sense.
Low fee active funds are available, and many of them don't own Walmart. What I'm arguing is that if you were offended by the actions of Walmart, you could go buy those funds for your equity holdings and be just as well off. It doesn't matter that some equity funds have a three percent expense ratio, because I'm not recommending you go buy one. I'm recommending you go buy a 20 basis point active fund that doesn't hold WMT instead of a 20 basis point passive fund that does if you have a pathological aversion to the company (or, equivalently, that a 30bp active fund can only be expected to underperform a 22bp index fund by 8 basis points annually and if you really think the company is evil that should be a cost you're happy to pay).
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The Rick Ferri whitepaper you linked, his blog on the whole (which I've been reading for over a year), and literally every other analysis of passive vs. active I've ever seen in about a hundred hours of reading on investments has compared low-fee index funds to the higher-fee general active mutual fund category. I explicitly addressed that already in my last post.
Well then, do you have a specific instrument in mind? In order to compare a passive fund you should probably have an active fund that follows a similar investment style. I.E. Yield weighted dividend payer. It wouldn't be hard to compare...just back test it including fees of course.
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Well then, do you have a specific instrument in mind? In order to compare a passive fund you should probably have an active fund that follows a similar investment style.
I own VTSMX and VGTSX because I think Walmart does more good than harm. Off the top of my head, though, American Funds Growth Fund of America and Vanguard PRIMECAP (which is temporarily closed to new investors) both have low expense ratios, hold mostly large-cap stocks, and (as it takes fifteen seconds to verify) hold no WMT.
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My personal beliefs influence my choice, few times a year. For me the key word is choice: usually I can avoid it, but if they are the only store open and I need something, and it is a legitimate need that cannot wait, then sure I go there. It isn't a moral high ground, it's a good enough moral middle ground. Same thing with investing: would not buy the individual stock, but would buy an index fund with Walmart holdings if it was a better choice for other reasons (like some of the reasons Ottawa mentioned). My personal beliefs about Walmart are not the only factor or the most important factor in the decision making process.
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Well then, do you have a specific instrument in mind? In order to compare a passive fund you should probably have an active fund that follows a similar investment style.
I own VTSMX and VGTSX because I think Walmart does more good than harm. Off the top of my head, though, CANADIAN NATURAL RESOURCES LTD and Vanguard PRIMECAP (which is temporarily closed to new investors) both have low expense ratios, hold mostly large-cap stocks, and (as it takes fifteen seconds to verify) hold no WMT.
Before we go any further down this rabbit hole...know that WMT is just one example of a company that has some aspect of business practice/model that I don't agree with. It doesn't matter what index fund you point out - there will be companies within it that every investor (with any level of moral ground) will dislike (at least some aspect of their business practice). For instance American Funds Growth Fund of America incorporates CANADIAN NATURAL RESOURCES LTD - which owns some juicy TAR SANDS in western Canada (it took me 10 seconds to find this). I don't think anyone would be proud to say they own this shit. an aside - a MER of 0.71% for is more than DOUBLE what my average MER is. That is not cheap.
My personal beliefs influence my choice, few times a year. For me the key word is choice: usually I can avoid it, but if they are the only store open and I need something, and it is a legitimate need that cannot wait, then sure I go there. It isn't a moral high ground, it's a good enough moral middle ground. Same thing with investing: would not buy the individual stock, but would buy an index fund with Walmart holdings if it was a better choice for other reasons (like some of the reasons Ottawa mentioned). My personal beliefs about Walmart are not the only factor or the most important factor in the decision making process.
You get it!
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Not claiming moral high ground...nowhere is that suggested.
It sure was. But notice that I wasn't replying to you.
You may not be claiming a moral high ground, because you know you don't have ground to stand on, and are okay with that.
I'm explicitly talking about someone like Jack, who has almost the same avatar as you when you just glance at it quickly, or others in this thread, who think investing in a company while boycotting buying from them is morally superior because they aren't supporting a company they don't approve of. They are. You just recognize that you are, and don't care, because diversification is more important than morals to you.
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Not claiming moral high ground...nowhere is that suggested.
It sure was. But notice that I wasn't replying to you.
You may not be claiming a moral high ground, because you know you don't have ground to stand on, and are okay with that.
I'm explicitly talking about someone like Jack, who has almost the same avatar as you when you just glance at it quickly, or others in this thread, who think investing in a company while boycotting buying from them is morally superior because they aren't supporting a company they don't approve of. They are. You just recognize that you are, and don't care, because diversification is more important than morals to you.
Whew! I was worried that my articulation was disarticulated! I can move on now :-)
Addendum: I saw Jack's avatar...it is also black and white...and now I know you see otherwise ;-)
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If personal beliefs includes not wanting to deal with people if Walmart, then yes. Otherwise no.
http://www.peopleofwalmart.com/
This. Seriously, I don't see these people anywhere else I shop. Walmart is their mothership.
Also, the long lines. And their customer service return line. And a lot of their merchandise is crap.
I answered once a month, because every other blue moon I use the convenience of Walmart since it is the closest super store to me. And I hate myself the whole time.
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Again the ex Walmart employee here. I do still shop there. Post in the other thread kind of covers it but honestly I don't think avoiding Walmart on some kind of principle accomplishes much. If Walmart vanished tomorrow something functionally identical would replace it.