With all the change taking place in the world, 2024 is shaping up to be an interesting year on the investment front. When making choices with your money, you’ll want to find opportunities that offer high returns, as well as ones that align with your personal values. Luckily, there are plenty that check both boxes, if you know where to look.
The world is not a perfect place. Individuals like you have the power to make it better, and there are few more effective ways to do this than ethical investing.
If you’re ready to put your wallet where your mouth is and spend your money where it makes a difference, keep reading: here are a few ethical investment ideas anyone can explore in 2024.
Explore Micro Financing
Micro financing is a lending service offered to individuals and small business owners that don’t have enough credit to borrow money using other means such as banks that may charge a large interest rate. Often, borrowers come from developing countries and use the money as capital to start an enterprise.
There are various online platforms that allow you to participate securely and globally. For example, micro finance in Australia could end up helping a company starting out in Vietnam. By lending to lower-income individuals, you’ll also be changing lives and making a genuine difference in the world. It’s a relatively safe mode of investment, and once the company is up-and-running, you’ll get your loan back too.
Many of those borrowing money through microfinancing are involved in social entrepreneurship, or at least own businesses that benefit their community in some way. Often, microfinancing platforms show you the sorts of causes you’ll be investing in, so you can pick the one you feel most passionate about.
Find Companies That Align With Your Values
There are many factors to consider when choosing individual stocks to invest in. While the potential for growth and risk are crucial, it’s also important to think about whether you agree with the company’s values. One way to determine this is by reading their mission statement. Another is to read up on the company from third party sources, like news agencies and NGOs.
Investing in ethical companies isn’t just a morally good idea either. Given the increasing importance of corporate social responsibility to both individuals and regulators, businesses that act on principles that are shared by a majority of the community have a competitive advantage and, all else being equal, will probably perform better than their competitors.
This goes the other way too: ethical investing involves avoiding companies that blatantly go against your values. Depending on your priorities, sectors you might want to avoid include weapons manufacturers, and addictive product and service suppliers like tobacco and gambling companies.
Invest In Ethical Mutual Funds And ETFs
If you don’t want to go through the trouble of picking out individual companies to invest in, or want a lower risk option, mutual funds and Exchange Traded Funds are the way to go. Mutual funds are actively managed baskets of securities and other investment vehicles, meaning that their contents often change over time. ETFs, on the other hand, are passively managed, and are more stable.
There are mutual funds and ETFs that were specifically made to cater to ethical investors. These include VFTSX, DSI and SPYX. Their creators used ethics-driven guidelines when choosing the financial instruments comprising them, making it easier for investors to purchase baskets of stocks that align with their values.
Mutual funds and ETFs are particularly good options for those who are newer to investing or who don’t have time to follow the stock market 24/7.
Bank Locally
When looking for a bank, it can be tempting to explore options overseas for a better deal. However, there are several key benefits to banking where you live. For one, local banks can offer you a much more personal experience. You’d have a physical building you can visit when you want, and over time, you’ll be building relationships with real people.
Banking at home is also good for your community. Local banks will invest your money into businesses and causes in your community. Putting your money in a local bank account also gives aspiring entrepreneurs seeking capital in your area a larger pool of money to borrow from.
2024 is shaping up to be an exciting year on the investment front. Those looking to make their money work for them now have more options than ever. While this can feel overwhelming, it also means that it’s easier to find investment opportunities that will make you money and align with your morals.
In this article, we went through some ways to diversify your portfolio with investments that are both profitable and ethical. We hope it will spur you on to do further research, and that you’ll find financial success this year investing in causes you care about.
