Our Resilient Investing Map (RIM) invites you to invest in your life in a way that recognizes and grows all of your assets. Indeed, the goal of resilient investing is to consciously and methodically spread your time and your money around the full Map, in order to nourish all the elements of your complete “net-worth.” This will include prudence with your money (Financial Assets), appreciation of your possessions and the built and natural world (Tangible Assets), and nourishing your relationships and inner growth (Personal Assets).
It may feel a little strange to think of, say, the ways you prioritize activities that enhance your child’s wellbeing, and the strategies you’re using to manage a brokerage account, as being parts of a unified investment system. We’re trained to think of these as very different kinds of decisions. But they are indeed related, as both are investments you’re making to bring about a desired result in the future.
Hope Credit Union mortgage client and first-time homeowner Melbatine Hunter. Photo courtesy Hope Credit Union.
As institutions that give profits back to their members rather than to shareholders, credit unions are usually a better banking option than megabanks. However, choosing a credit union is no guarantee that our money is being used most effectively in your communities. There are low-impact credit unions, just like there are low-impact banks.
Diversification is, at its root, a response to the ancient admonition you might have learned from grandma: don’t put all of your eggs in one basket. If that basket drops they could all break, ruining your and grandma’s breakfast! This proverb can be traced back to the 17th century, and was popularized by Cervantes in Don Quixote[1]. (Later, Mark Twain, ever the contrarian, proposed the exact opposite: “pull all your eggs in the one basket and—watch that basket!”[2]
The wisdom of Cervantes goes nearly unquestioned today. Virtually every reputable financial firm teaches people about diversification, extolling the importance of spreading out risk. But—and this is an important but—we contend that however well intentioned, Wall Street’s version suffers from two major omissions: first, they focus solely on one’s financial instruments, and second, they can’t model the possibilities of Breakdown/Breakthrough, so they presume that we’ll be Muddling Through for the foreseeable future.
We hope by now some of our new readers are feeling eager to explore the soaring vision of resilient investing that most of our clients share. Be aware, though: if you want to be a resilient investor, you need a pioneering spirit. In these volatile, uncertain times, the old road maps that guided 20th century investors are no longer sufficient. The landscape has changed, and you’ll be traveling on new pathways that have yet to see much traffic. This can be disconcerting, as it lacks the appearance of stability. That Rock of Gibraltar was once an image of the financial industry, but turned out to be a mirage.
The uncertainty that plagues today’s investors became clear to us over the past several years, as clients and friends shared their notion that the world has come unmoored, and that “business as usual” is no longer a reliable anchor for making decisions about their investments, or their lives. While these wide-ranging conversations are often rich with insight and full of passion, our role as investment advisors asks us to act from an objective view of the world, free of personal and emotional bias. As you can imagine, this is no easy task!
As frontrunners of the socially responsible investing movement, we at Natural Investments are “resilient investors” who are working off a radical new map of the investing universe. We invite you to navigate your own path across this vast terrain. But before we start exploring the nooks and crannies, let’s take a moment to ask the fundamental question: why invest?
Some would say this is obvious—we invest to build wealth. And what’s the point of building wealth? To be secure? To then build even more security and more wealth? Isn’t that what we all want? Well, no, at least not in the way it’s usually presented. While we take it as a given that most people want to increase their financial assets (at least up to a point) and have some nice things, traditional measurements of personal wealth are inadequate, often ignoring that which gives us the most satisfaction. Economists measure our “standard of living,” but what we’re really after is a higher “quality of life”—and while there is overlap, those two are not the same thing! The point of investing, we’d like to suggest, isn’t just about having more, but about being happy in a full, classical sense.
Let’s look back—back as far as 2500 years—for help in answering these questions. Aristotle, writing in the Nicomachean Ethics, described the point of a well-lived life, the goal we should be aiming for, as “blessedness.” For Aristotle, blessedness meant enjoying family and friends, with a deep feeling of well-being and contentment. In our day, this ideal might suggest a mature experience of knowing one’s mission, succeeding at pursuing that mission, having a solid primary relationship and close friends and family, having sufficient financial resources to live well according to your own standards, to be making a contribution and leaving a legacy one can be proud of, and staying in right relationship to the natural world that sustains life. It’s not about more—it’s about better!
We don’t think of investing as simply a professional, numbers-crunching discipline; for us it’s something much more fundamental. We believe investing should support financial goals (buy a house, start a business) and it should support the bigger and deeper and more profound purpose of a life: Aristotle’s blessedness. Investing can help each of us live a better life, and it can help improve communities and build a better world for all.
To do this, we must first break out of the confines that limit our ideas about wealth. Financial choices are just one part of a continual process of giving and receiving, balancing risk and reward, and exchanging time, energy, and money with those around you. So let’s make room for values and communities, for society and the Earth. And let’s expand our vision to include the interior realms of emotional and spiritual well-being as well, which are enduring elements of healthy human development. By doing so, we are bound to get more relevant, and more life-nourishing results.
Many people are motivated by the desire to be as prepared as possible for an uncertain future, but they recognize that this is no easy task. We encourage you to take a big picture view of the world and consider the many ways that the future could unfold. You’ll want to envision where you would like to be going in both the near-term and in years to come, and to keep abreast of the wide and growing range of investment choices available to you. By thinking in this broad, creative way, resilient investinggives you the tools to design a personalized plan. This will show you where you’re currently investing your time and money, highlight areas that you might be over or under emphasizing, and provide the guidance you’ll need to move forward in your chosen directions.
As you put your plan into action, you’ll notice a newfound sense of calm, one that rests on the knowledge that you’ve taken measured steps to future-proof your life and are ready to ride out the inevitable storms and surprises that come your way. You can’t eliminate risk, but you can dial down your stress levels and have more peace of mind by knowing that you’re prepared. Having a comprehensive and diverse set of investments will provide genuine benefits when one or another market you’ve invested in has a downturn (whether it be a sudden drop in the Dow, a dry spell that decreases yields in your garden or regional food network, or an unexpected health challenge). While it is always painful to suffer a hit in one area, investments in other Zones will likely be doing better and help carry you through.
Natural Investments is involved in a variety of efforts with our industry colleagues that facilitate positive economic, social, and environmental change, including shareholder engagement with companies and public policy advocacy. Some of our efforts in 2017 include:
We signed a letter to the dozen major banks, including Wells Fargo and Citibank, that are financing the Dakota Access Pipeline, urging them to avoid legal liabilities and financial and reputational risks associated with financing the controversial project—and to advocate publicly for the rerouting of the pipeline away from tribal land.
We signed a global investor statement to leading consumer and agriculture companies asking them to adopt zero—deforestation policies for sourcing key agricultural commodities such as palm oil, soy, beef, paper, and lumber. Deforestation in Latin America, which is largely caused by commercial agriculture, is a leading contributor to climate change, and the recent Soy Moratorium in Brazil proves that the rainforest can be protected while expanding agricultural production.
We signed a letter to sixty of the world’s largest banks calling for more robust and relevant climate-related disclosure to be supplied to investors on four key areas: climate-relevant strategy and implementation, climate-related risk assessments and management, low-carbon banking products and services, and banks’ public policy engagements and collaboration with other actors on climate change. Banks have an essential role to play in ensuring that we meet the Paris Climate Agreement goal of “making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.”
We supported shareholder engagements with three top carpet manufacturers—Mohawk, Shaw, and Interface—to encourage them to develop plans for sustainable carpeting redesign to make it more recyclable, to use higher levels of appropriate recycled materials, to develop national recycling goals, to help develop end markets for discarded carpet, and to take at least shared financial responsibility to implement these actions.
We signed a letter to major motion picture studios urging them to eliminate tobacco depictions in youth-rated movies. We believe this is warranted to protect the company’s reputation and consumer base, to avoid legal liabilities, and to eliminate the reputational and potential financial risks caused by the company being associated with this public health issue.
In our combined decades of work as investment advisors, we’ve had the privilege of sitting down and talking deeply with hundreds of clients about what matters most to them. One thing that kept coming up in these conversations is that, although they liked our “invest with your values” approach, they didn’t like thinking about investing very much. We, on the other hand, think that investing is really cool, a focal activity where people make decisions that change their lives and the world. Are we just geeks, or do we see something that others don’t?
Eventually, we realized that most people have a rather narrow image in their minds about what “investing” really means. Do an image search on the word, and you’ll see lots of coins and dollar bills, graphs and charts, bullion bars and Wall Street suits. What generally comes to mind is that investing is done by those who have extra money, in order to turn this into even more money, using the methods promoted by Wall Street. While most of us are interested in becoming more prosperous, this concept of investing leaves many people out of the game, and even for those who do invest this way, it is a cold and abstract prescription that fails to touch on what gives deeper meaning to our lives.
We say that it’s time for a new approach. Rather than wrinkling up one’s nose and doing “investing” the way we’ve been taught, we’re asking people to take a step back and really think about what a powerful and creative role this activity can play in our lives. This begins with expanding our notion about what investing truly is. Try this on for size: investing is something that we all do by directing our time, attention, energy, or money, in ways that move us toward our future dreams, using a diverse range of strategies.
Let’s start with dismissing the popular notion that investing is an activity that is only available to those with discretionary capital to play with. The fact is, neither the investment, nor the return, must necessarily be in the form of money. Financial investments are just one side of the coin; on the flip side is time, our most precious resource. We can and should bring this to the investing table by being thoughtful in the ways we focus our attention or channel our energy. Throughout this book, we’ll look at ways that the choices you make with your time, attention, and energy are as central to your long-term investments as the ways you work with your money.
Next, we rethink the purpose of investing. As the Beatles so joyously pointed out, money can’t buy us love. Still, the single-minded pursuit of most investors is to increase our financial “net worth,” though our real goals in life are much broader than this. Resilient investing recognizes that we are actually interested in cultivating several types of assets: personal (relationships, community, learning, health, spiritual growth), tangible (home, efficient energy systems, local food supplies, a healthy ecosystem around you), and financial (stocks, bonds, savings). By including all of these valued objectives in our resilient investment plan, we have the opportunity to shape virtually all aspects of our lives.
Finally, it’s important to rethink how we pursue those goals. Are the recommendations proffered by traditional investment books, magazines, and financial services firms the one and only valid methodology? Are there other strategies that you can use to diversify and seek out new opportunities that are largely ignored by Wall Street? And in this volatile, uncertain, complex, and ambiguous world, might it be wise to consider the possibility that strict adherence to traditional, buy-and-hold-on-to-your-hats dogma may leave us vulnerable to systemic risks that threaten to send our economy reeling?
We refer to this notion of spreading our wings into more spacious skies “weaning off Wall Street.” It opens our minds to exploring strategies beyond the one that rules today’s herd, with its all too familiar mantra of “show me the money” and creates space to think about what’s important close to home, how to support a sustainable global economy, and thinking in a visionary way about evolutionary investing.
Our Resilient Investing Map (RIM) invites you to invest in your life in a way that recognizes and grows all of your assets. Indeed, the goal of resilient investing is to consciously and methodically spread your time and your money around the full Map, in order to nourish all the elements of your complete “net-worth.” This will include prudence with your money (Financial Assets), appreciation of your possessions and the built and natural world (Tangible Assets), and nourishing your relationships and inner growth (Personal Assets).
