#TBT: 6 Cheap Ways to Get Into Sustainable Investing
By now, you should know that I have quite the passion for socially responsible investing (SRI), namely by communicating how important it is to invest the way you live (or want to live) and also emphasizing how easy it is to get started. Impact investing - a by-product of SRI practices - is resonating more with women and young investors these days, and more importantly, those with some discretionary income (not just the super rich) all have the ability to change the world through simple investing practices. I was inspired by an article on CNN Money, that talked about how ordinary people who possess a smartphone can put their money into SRI investments...even with just $20!
There are 6 primary groups that CNN Money advocates, some you may have even read about on GradMoney before. Without further adieu, here are some fun apps that will not only help you get into SRI practices, but are super cheap as well...
1. Community Investment Note - Created by the Calvert Foundation, Community Investment Note lets users start investing with a minimum of $20 online to support a wide array of social enterprises. Namely, you can target specific causes that are important to you, such as health, micro-finance, women leadership, affordable housing, community development, renewable energy or sustainable farming. Investors can generally expect an annual return around 1.0% (while small, you can feel good knowing you're making a difference, and this return is WAY higher than a savings account). However, Calvert is noted as not invested in publicly traded companies, rather investors will only be able to invest in enterprises that are engaged in the issues noted above.
2. Swell - This is another app you may have heard of through online ads. Swell allows users to fund companies chosen for their environmental, social and governance credentials that align with the UN's Sustainable Development Targets - such goals include the aim to end hunger and global poverty by 2030. There are six portfolios that focus on addressing social and environmental challenges and issues: green tech, renewable energy, zero waste, clean water, healthy living, and eradication of disease. Combined, the portfolios returned roughly 19% since their inception in the fall of 2016. To start, you need only $50!
3. Wunder Capital - While it costs a minimum of $1,000 to invest on the front end, Wunder Capital has had quite the impressive return of approximately 6%-8.5% annually. The company's focus is on further development of solar energy projects and there are two investment options available to customers: 1) The Term Fund, which provides loans to US businesses that are looking to make the switch to solar power, and 2) The Income Fund, which allows users to invest in operational solar power projects that are already being used by American businesses.
4. Social Investment Fund - RSF created a sub group called the Social Investment Fund, and for a $1,000 investment minimum, investors can help lend money to social enterprises in a variety of sectors. Such entrepreneurs and organizations include exposure to food and agriculture, environmental solutions, education and the arts - any and all have a social mission at the core of their business. The company says that investors can expect a 0.75% return for a 90-day term, and the deposit can be renewed each quarter or redeemed.
5. OpenInvest - For $3,000 you can open an account with OpenInvest, which is an online adviser that makes personalized investment portfolios to ensure that your investment choices align properly with your values -- and they can be VERY specific. For example, you can choose to invest in companies that support LGBTQ employees or refugees, divest from fossil fuel producers or corporations driving deforestation, invest in ethical supply chains or even divest in companies supporting President Trump. Over the past year, these portfolios have returned a whopping 17%!
6. Motif - Last, but not least, is a company that we have discussed quite a bit here on GradMoney! Motif is a fully-automated investing tool that allows users to create their own portfolios for just $1,000. We have discussed plenty of their portfolios here, but through Motif's Impact Portfolios you have the ability to invest in companies that practice sustainability to reduce their carbon footprint, promote fair labor or have a track record of strong corporate governance. Returns generally range from about 5.2% to 7.5%, annually.
This article was originally published on GradMoney on October 25, 2017.