There’s no smarter way to build wealth than investing your money. Take your cash and put it in assets that will grow in value over time. It’s not rocket science – and the right approach can easily help you turn a small fortune into a much larger one.
Unfortunately, there’s an aspect of investing that’s sometimes hard to ignore: its unethical nature. Some of the best-performing investments involve pumping money into oil or gas companies, weapons manufacturers, and so on. It can leave a sour taste in your mouth and almost taint your earnings, though there could be a solution on the horizon.
This is where we’re going to introduce the idea of ethical investing. It’s something of a trending word in the finance world, but what does it mean – and is it even possible to invest money ethically and still see returns? Let’s find out!
What is ethical investing?
Ethical investing is when you invest money in things that don’t have a negative impact on the planet, societies, individuals, etc. Your money goes into companies or concepts that have either a neutral or positive impact. An ethical investment firm can help you identify opportunities like this – and the good firms will let you explain your ethical standings and specifically avoid investments that go against what you believe in.
Is ethical investing actually possible?
Yes! You’ll be surprised how many things in the world are actually quite ethical and will generate good short or long-term returns. Renewable energy is the clearest example of this. It’s a fantastic alternative to putting money into oil and gas companies – and history shows that renewable energy investments will keep growing with time.
Will ethical investments be a better choice for my money?
The answer to this depends on you and your morals. Some people don’t have a problem investing in various companies or funds, as long as they generate money over time. That’s completely your prerogative, and nobody should shame you for that.
On the other hand, if you feel uneasy about some of the investment opportunities out there and would rather put money in things that help you do good, then ethical investments will be an obvious improvement for you specifically. You can spend money, but have peace of mind knowing that you’re not causing a negative impact.
As for whether or not it’s smarter from a strictly financial sense, the jury’s still out. Some ethical investments are extremely profitable while others are not. You also give yourself a smaller pool of investment opportunities to choose from, which can limit your diversity. It all comes down to your investment goals and how much you care about what you’re investing in.
In conclusion, ethical investing is an alternative way of spending your money and trying to develop wealth. It gives you chances to invest in funds or assets that don’t have a negative real-world impact and are more likely to have a positive one. You can absolutely make money this way, but it might take a bit longer and be slightly harder to identify the right investment opportunities.