We all mean the best with our New Year's resolutions, but I can pretty much guarantee that in 2011 I’ll still be sporting the 10-pound chunk and sleeping across from a bookshelf full of failed resolutions. But I can also guarantee you that I’ll make a difference in the world this year – and that you can too. To top that off: We’ll likely make money while we're at it.
How are we going to do it? By investing in a socially responsible way. Socially-conscious investing is an investment strategy that seeks to maximize both financial gain and social good (you choose your cause, whether it's saving the environment, furthering human rights, or whatever else you feel like saving/helping/putting money towards).
And, here’s why you’re likely to keep this resolution: It’s easy to invest in socially-conscious mutual funds. In fact, you can do it right now, with a few clicks and a phone call or two. Here’s how:
Work the Web
Visit SocialFunds.com, which is a personal finance site dedicated to socially-responsible investing. Browse through their list of mutual funds and learn what these funds invest in. Often, these companies are notable because they have positive records on issues like community investment, the environment, or human rights. For some, this may include companies that avoid animal testing or gambling, and more. You can select funds that meet the social criteria you care about. Because SocialFunds.com lets you compare mutual funds, it’s easy to see how different funds stack up against each other. While you’re feeling all warm and fuzzy about the good you are about to do, take a look at the fund’s performance. Then, you may start feeling all warm and fuzzy about the good you could do for your pocketbook, as well.
Want a financial planner to do your socially-conscious investing for you? Check out SocialInvest.org, which offers a list of financial planners who specialize in socially-responsible financial services. The site also includes a list of banks, credit unions and funds it considers to be socially responsible.
Do It the Old-Fashioned Way
If you prefer reading a book to scanning the web, there are a number to help you get started, including The Complete Idiot’s Guide to Socially Responsible Investing by Ken Little (Alpha, March 2008), Compelling Returns: A Practical Guide to Socially Responsible Investing by Scott Budde (Wiley, September 2008), and Socially Responsible Investing for Dummies by Ann C. Logue (For Dummies, December 2008).
Just remember to treat your investment in a socially-responsible mutual fund the same way you would treat your investment in any other mutual fund: Look for low expense ratios, no loads, and other fund criteria that make sense for your portfolio. For more information on the basics of investing, check out our blog entry on the topic.
Socially-responsible investing, when done right, is good for the world – and for your bottom line.
Catey Hill is the money editor for the New York Daily News online and author of "Shoo, Jimmy Choo! The Modern Girl’s Guide to Spending Less & Saving More" (Sterling, January 2010).