DON’T PANIC: INVESTORS ARE CHANGING THE WORLD FOR THE GOOD

#investors #stockmarket #socialproblems #purposeoriented
It’s tough to love the stock market with the volatility we’ve seen in recent weeks.
Certainly, both the market and the government have tarnished reputations, as New York Times columnist David Brooks recently pointed out.
But there are a few big-money types who have tried to use the market to solve social problems. Brooks writes that these investors have opposable minds. They are part profit-oriented – nothing is done in the markets without someone making money – and part purpose-oriented.
These investors have created organizations that look a little like businesses, a little like a social-service providers and a little like charities – or some mixture of the three, Brooks writes. His column was published in July 2015 in The Atlanta Journal-Constitution.
Ben & Jerry’s ice cream led the first wave in this sector, Brooks says, but now you’ve got a burgeoning array of social-capitalist tools to address problems. They range from B Corporations like Warby Parker, which gives free glasses to the poor, to social impact bonds, Brooks writes.
Brooks cites a phenomenon is called impact investing, which seeks out companies that are intentionally designed to both make a profit and provide a measurable and accountable social good.
We all would like to put our hard-earned savings into companies that do good. But as a small saver, or one who is diligently saving a small portion of what he or she earns toward retirement, one has to focus on getting the most growth and income from his contributions.
For these folks, gyrations in the market, like the ones we’ve seen recently, cause great consternation. But most experts in the field would advise them not to panic. Usually, what goes down goes back up, as we have seen. You see, those with some cushion in their accounts, and with good advisers, will have raised cash by selling some of the underperforming investments, so they can use that cash to buy some great stocks cheaply when the overall market tumbles.
Remember that when the market reacts this way, an individual stock is just following the market. It does not mean the companies, or their products, are no good. Those good companies will come back because investors see discount shopping opportunities in tumbling markets.
So, if you are small, careful investor, who has put his or her money into good companies or good funds, relax. When the market drops, it’s usually a temporary glitch. Stick to your original plan, and follow the advice of the person you trust. If it helps, don’t watch the news – at least the parts about how the market is doing. If you know that your savings and investment plans are well-thought-out, cringe if you must at what’s going on, but breathe easily.
Someday, you may have enough money to make a real impact on a global problem. For now, though, secure your own nest egg little by little, and don’t let the market gyrations get you down.
Of course, there are many other worthwhile things you can do to enhance your wealth. For one of the best, visit www.bign.com/pbilodeau. If you are thinking of getting a second, part-time job to throw a little bit more toward your retirement, think a little outside the box. You just might find a way to better utilize any free time you would devote to a second job, and have a lot more fun than a second job would be.
It’s a marvelous thing that some smart, rich folks are looking for ways to solve the globe’s problems with their own money. We all may wish to be in that situation, but, for those who are not rich, it’s best to work on enhancing your own wealth FIRST, and help others do the same.
When, and only when, you’ve done that, by all means feel free to make an impact on the world. Work hard, play hard, save and invest hard. Help others, and you will be enriched. Once enriched, keep helping others. It will bring you great joy.
Peter

PUBLIC VS. PRIVATE: BE AN IMPACT INVESTOR

#investors #publicprivate #impactinvesting
Who will solve the great problems of the nation and the world?
Will it be governments or private citizens?
Or, will it be a little of both?
It was thought that private citizens would never solve anything unless they can make money – gobs of money.
Governments, on the other hand, don’t have any money, but spend it anyway, sometimes futilely.
New York Times columnist David Brooks discussed the new concept of “impact investing.” That is private money going into investments that attack some of the world’s problems. The Atlanta Journal-Constitution published his column Feb. 3, 2015.
Brooks says that the private market, prone to devastating crashes and producing widening inequality, combined with gridlocked, ineffective government aren’t getting the job done.
So a group of smart people with opposable minds – part profit-oriented and part purpose-oriented – have created organizations that look a little like businesses, a little like social-service providers and a little like charities – or some mixture of the three, Brooks writes.
They are creating new impact funds, social stock exchanges and include players like Goldman Sachs and Credit Suisse. The first wave of this sector was led by Ben & Jerry’s ice cream. Now you have an array of capitalist tools ranging from B Corporations like Warby Parker, which gives free glasses to the poor, to social impact bonds. Brooks writes. He quotes at 2010 report by the Rockefeller Foundation and JPMorgan that says impact investing capital could amount to $1 trillion by 2020.
So what’s happening here? Did government failures in helping its people make wealthy people feel guilty – guilty enough to accept a potentially lower profit to help lots of people?
Capitalism is a marvelous institution that has gotten a bad rap. People are beginning to realize that it’s not how rich you become that matters, but how you become rich. Did you do well by doing good? Were you helping others succeed as you were succeeding? Once you’ve achieved success, did you hoard all your gains, or did you use them to help those worthy of your help?
It’s clear not everyone is going to get rich. But there are many vehicles out there that allow ANYONE to get rich. For one of the best, visit www.bign.com/pbilodeau. Check out a model in which success only comes by helping others succeed.
Think back to the days when you were young, and just starting out in the workforce. You probably had an entry-level job for, say, a small business. When the time came for you to move on to other things to better your life, how did your boss treat you when you left? Was he wishing you well, telling you he was proud to have you work for him and offer any lifelong assistance (not necessarily financial) that you might need? Or, was he the type that was upset that you were quitting and leaving him short-staffed? The former likely was a pleasure to work for, because he looked out for you, and you, in turn, made sure you did your best for him. The latter likely had employees who were indifferent toward the boss, didn’t care whether his business succeeded and probably worked under a good deal of stress.
If you become a boss, which kind would you like to be? If you become an investor, which kind would you like to be? People who work hard on being better people tend to have success follow them. Those who don’t, and still achieve success, probably have lots of current and former employees, who got relatively little in return, to thank.
Peter