Deciding how to invest your money isn’t something you should take lightly. After all, different investments come with varying implications and risks. On the other hand, it is possible to invest your money in something you can feel good about. That’s where socially responsible investing comes into play.

Also known as socially conscious investing, socially responsible investing, or SRI, is a strategy that promotes social good in conjunction with profit.Investors who identify as socially responsible typically aim to put their money into companies that better society, or, at the very least, operate in a manner that does no harm.

What Makes a Company Socially Responsible?

There are certain factors that most socially responsible investors look for when deciding where to put their money. These include, but aren’t limited to:

•         Environmental impact. Some socially responsible investors favor companies that actively work to improve the environment. Others simply look for companies that don’t contribute to additional pollution.
•         Public health. Some socially responsible investors make it their business to avoid companies that sell products such as tobacco and alcohol that are known to have negative health-related impacts.
•         Morality. Many socially responsible investors will go out of their way to avoid companies that fall into a morally gray area. These might include proponents of gambling or makers of contraception, which some consider morally wrong.
•         Peace. Some socially responsible investors will make certain to avoid companies that manufacture and distribute weapons.

How to Invest

If the idea of socially responsible investing appeals to you, you have several options. You can either seek out a company whose products or values align with your philosophy, or you can look for mutual funds with socially responsible strategies. You might also consider community investing, a subset of socially responsible investing that focuses on putting your money into low-income neighborhoods.

Vetting Your Investment

Those who adopt a socially responsible strategy tend to take one of two approaches. Some apply a negative screening strategy, where they reject companies or investment opportunities that don’t meet their personal standards. Others employ a positive screening strategy, where they choose companies whose products or philosophies they actively approve of.

If you’re an environmentally conscious person, you might use the negative screening approach to exclude a power company that releases waste and pollutes air quality. On the other hand, if you employ a positive screening strategy, you might actively choose a company that retrofits homes and buildings to make them more eco-friendly.

Don’t Forget About the Finances

While it’s noble to want to invest in a company you believe in, remember that the goal of socially responsible investing is also to make money. To that end, you’ll need to double your due diligence to make sure that the company you’re looking to invest in not only meets your social criteria, but is financially sound enough to warrant your hard-earned money. In this regard, socially responsible investing can be far more time-consuming than choosing a random stock or bond to purchase for your portfolio, but on an emotional level, there’s something to be said about sticking to your principles.

 

Whether you have a low starting salary, or a large business worth millions, investing is the proper way to begin building or maintaining wealth. In layman’s terms investing is placing money into a company, stock, or other fund with the expectation of a return on the money. Investing involves a broad range of products, and figuring out the correct investment depends on the kind of risk you are willing to take, and how much you expect to get back on your original investment.

Stocks are what first comes to mind for many people when thinking of the word investments. Stocks can be a good investment for all portfolios, because consumers can choose the stock of their choice, and purchase or sell their stock at any point in time. The stock market is open to those looking to purchase stock options for millions of dollars to pennies. Stocks will fluctuate in worth depending on the stock market and how the company is fairing overall, making stocks a a risky investment, but researching companies to invest with, and following stock market trends to understand how the stock market works can help to mitigate risk.

Treasury bonds are issued by the federal government, and are generally a safer investment than investments that depend on the stock market. Treasury bonds are issued as certificates and are a great addition to any investment portfolio. Treasury bonds increase in worth with age, meaning that the bonds should be held over a number of years before cashing in for the increased value. Treasury bonds are slower to appreciate in value or trade in than stock, however, treasury bonds are much more stable than other investment products on the market.

On investment strategy that is often ignored is investing money in a start up business. Company investors can help new, small businesses get off the ground and begin building their company. Becoming an investor in a business can be a risk, as some businesses fail, or never get off the ground. Investing in a business will offer a return on investment over the years, as many new business take over a year to turn a profit. Business investing is attractive, as consumers can help a small business, and also become involved in helping to build a company from the ground up. Some companies that investors can become involved in are financial companies, such as payday loans online companies. Payday loans online companies may turn an investment faster than other companies, as consumers are charged a mark up for the payday loan, along with paying back the money that was loaned originally. You can use them for cash loans too. Payday loans online are also available to consumer across th country, offer a larger customer base than other businesses.

Investing is something that everyone should get involved in no matter their net worth. Investing will help consumer understand the market and learn proper strategies to build wealth.