Green Investing
The way of the Financial Monk is the way of Minimalism. Minimalism is a lifestyle where one reduces the number of responsibilities one has to maximize control over their lives. By learning to live with less, those who practice Minimalism can live fuller and more peaceful lives.
One of the central tenants of Minimalism is having a minimum impact on the planet itself. Whether you’re choosing to help with population control and not have children, changing your diet to support locally sourced food, or riding a bike to help minimize your carbon footprint, you’re actively trying to live a more sustainable lifestyle.
As a Financial Monk, one of the best ways to practice Minimalism is through your investment strategy via Green Investing. Green Investing is the act of concisely choosing to invest in companies and organizations dedicated to environmental protection & sustainability.
According to DiversityFund.com, Green investing amounted to $13.3 trillion in assets in 2012. By 2018, that number had jumped to $30.7 trillion. Market analysts predict that the Green Investing market will reach $150 trillion in total assets over the next decade and a half.
Companies such as Tesla, Sunpower, and Whole Foods are all doing what they can to improve the state of our Earth. As a Monk, you will want to support these types of organizations financially as they strive to make the world a better and cleaner place to live.
A Green Fund
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One of the best ways to invest in companies like this is through a Green Fund. A fund is a group of organizations whose shares are packaged together. A fund will purchase these stocks and bundle them together and allow you to buy a share of a fund rather than individual stocks. This bundling allows an individual to own a small piece of each company in the fund.
For example, one share of Tesla costs $325, a share of Whole Foods Costs $40, and First Solar costs $80. In total, you would need to spend 450 dollars just to own one share of each stock. Investing in a fund allows you to invest smaller amounts of money while giving you access to many different Green Companies that you might not otherwise be able to afford to invest in.
The only downside to investing with Green Funds is that they might not have the same return on investment as a fund that contains non environmentally friendly companies. For example, It’s effortless for Tabacco based funds to be highly profitable when they can produce a pack of cigarettes for pennies and then sell them for upwards of $10 a pack.
In comparison, it’s much more costly to build solar panels that won’t have the same profit margins as cigarettes once sold. Not to mention, most green funds are viewed as long-term investments, taking upwards of 10-20 years to produce a return on your investment. This lower return on investment is important to note as you plan your investment strategy.
But those on the path of the Monk are not seeking huge gains. They are seeking sustainable living with a minimum impact on the planet. The strategy of Green Investing won’t make sense to you if you are seeking to retire with a giant McMansion, as you would need to invest in environmentally unfriendly companies to ensure your making enough profit to sustain that mansion once you retire.
For this exercise, review the list of environmental issues below. Pick one concern, then find one fund that you think addresses those concerns very well.
Here are some examples
Once you have researched a few funds, pick one fund that appealed the most to you. Write down their mission statements, minimum investments, costs, and how they plan to payout. Once you have your fund selected, I would recommend buying a few shares.
Here is a list that I created as a sample:
Concern: Water Sustainability
Fund: Invesco Water Resources ETF
Mission Statement: A Collection of USA-listed companies that create products designed to conserve and purify water for homes, businesses, and industries.
Price per share: $50
Green Investing is an excellent way to use your money to help make the Earth a more sustainable place to live. And Green Funds are one of the best ways to do it. You’ll be able to gain exposure to many different companies and help fund many different types of sustainable developments. You’ll not only be investing in your future but in the future of countless generations to come.
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