Investing. If you’re like me, you think about it a lot. You’d like to do what every successful (read: wealthy) person says and “make your money work for you.” The problem is, it seems like you need a bunch of money to even get started.
And besides working for you, what is that money doing? It’s probably working to help some filthy rich guy expand his empire (hi, Elon Musk and Warren Buffett). Why can’t you put your money to work for companies that are helping end world hunger, providing housing for low-income neighborhoods or developing clean, renewable energy?
Karma is a good investment, right?
Believe it or not, you can invest your money in a way that will help do great things in the world and provide you a return on your investment. It’s called impact investing, and it’s not just for the filthy rich.
What Is Impact Investing?
Impact investing is just what it sounds like — it’s a way to invest your money and make an impact on the world around you.
You may have heard of socially responsible investing, which is investing in companies that do not promote harmful products or hurt the environment. Impact investing is a step beyond that. With impact investing, you’re not just choosing companies that avoid negative social and environmental effects — you’re selecting companies that are actively making a positive change in the world.
But impact investing is not philanthropy. You’re not looking to make a donation to a great cause with nothing but a tax write-off to show for it. With impact investing, you’re seeking a positive return, just as you would with any investment on Wall Street.
Guess What? Impact Investing Is Now Affordable
It’s been around for decades, but until recently, impact investing was considered to be for those with plenty of money to spare. Small-time investors didn’t have a good way to get in on the action. Thanks to the internet, that’s all changed. Here are a few of our favorite companies that are helping those with just a little to invest get in on the impact investing action.
Calvert Impact Capital
Calvert Impact Capital has been around for 22 years and was one of the first impact investment companies available through brokerage accounts. It focuses on helping smaller investors get started with impact investing.
“The majority of people who choose impact investing realize that their money is who they are,” said Justin Conway, vice president of investment partnerships at Calvert. “They’re thinking about how they deploy their resources more than how to make the fastest dollar.”
With Calvert Impact Capital, you can start out with just a $20 online investment and then choose to make periodic electronic deposits. It’s a great way to get started in the impact investment world without putting your entire nest egg at stake.
You also get to choose from a portfolio of businesses from nine impact sectors:
- Affordable housing.
- Community development.
- Environmental sustainability.
- Renewable energy.
- Small business.
- Sustainable agriculture.
You’ll know your expected rate of return upfront. You can sign on for an investment term of as short as one year or go longer. The longer you’re willing to invest, the better your expected rate of return.
Another option if you’re looking to dip a toe into the impact investment waters is Swell Investing*.
According to its website, Swell believes “today’s biggest challenges will result in tomorrow’s leading industries.” That means doing good things can also be profitable.
Swell’s platform features companies that derive revenue from products and services that align with the United Nations Sustainable Development Goals. They consider everything from gender equality to ending poverty to clean energy.
“For each company, we want to show how they’re making an impact,” said Swell’s CEO and founder, David Fanger. “When you select your portfolio, and go to check in, you will actually see information on why it’s up or down right now, as well as a news feed showing your companies, so you can see what’s going on.”
The minimum investment? It’s just $50 to get started, and you’re not locked in for a specific length of time. Recurring deposits can be as low as $20.
You not only choose what type of industry you like to work with, but you can actually tailor your investment to remove companies that don’t align with your values.
“We let an individual remove up to three companies from their portfolio,” Fanger said. “Investing can be very personal, and they may have strong feelings about certain companies.”
With Swell, fees are minimal and upfront, and investment portfolios bring in returns that rival those of traditional investment methods. Low fees, solid returns and warm fuzzies from helping out the world. What more do you need?
Other Options for Impact Investing
Wunder Capital — Are you a fan of solar energy? Wunder Capital could be a good fit for your investing. The firm focuses on solar energy companies and has a minimum investment of $1,000.
RSF Social Finance — If you cheer for the little guy, you might love RSF Social Finance. These guys put their money to work for entrepreneurs working with social enterprises like Veritable Vegetable and Alabama Waldorf School. With a $1,000 minimum and 90-day terms, you can put down a little more money without tying it up for a long time. It’s a great choice for those who champion female entrepreneurs.
Motif — Motif focuses on trends in the tech industry with an emphasis on sustainability, fair labor and corporate governance. It also has a $1,000 minimum.
Put Your Money to Work for You and for Good
It’s not easy to get your finances to the point where you’re comfortable making investments. But if you’ve paid down your debt and you’re starting to feel like it’s time to look ahead, think beyond the financial returns. You can still get great returns while helping to make the world a better place today and for your kids’ future.
Plus, it’s one hell of a conversation piece at family gatherings.
This article contains general information and explains options you may have, but it is not intended to be investment advice or a personal recommendation. We can’t personalize articles for our readers, so your situation may vary from the one discussed here. Please seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.
Tyler Omoth is a senior writer at Codetic who loves soaking up the sun and finding creative ways to help others. Catch him on Twitter at @Tyomoth.