Unparalleled Transparency

There’s a fas­ci­nat­ing change hap­pen­ing in the world. Twitter, Facebook, and oth­er social net­works have cre­at­ed an envi­ron­ment where we have unpar­al­leled trans­paren­cy to the world around us.

In the past, a com­pa­ny could “stay on mes­sage” and it would be dif­fi­cult to pen­e­trate through to real­i­ty. Same goes for politi­cians. Now how­ev­er, we can con­nect to each oth­er in such a way that we’re fact-check­ing across demo­graph­ics. It’s kin­da cool and hav­ing pret­ty wide­spread impact on how busi­ness is con­duct­ed.

It’s forc­ing a change.

In fact, some are pick­ing up on the change, and run­ning with it. These com­pa­nies are align­ing to a set of com­mu­ni­ty val­ues as a way to par­tic­i­pate “social­ly” with their cus­tomers.

• Patagonia declares war on dirty den­im.
• SeaWorld prof­it drops 84% as cus­tomers desert park.
• CVS stops sell­ing cig­a­rettes, offers cus­tomers ‘quit smok­ing’ pro­grams.

Values investing

I’m not a big fan of the “pun”. My wife reminds peo­ple that I don’t read between the lines, ever. Most puns sim­ply go right over my head.

That said, notice the ‘s’ in ‘val­ues’. (See, I’m even explain­ing the pun.)

Value invest­ing has been around a long time. It refers to the idea of buy­ing “under­val­ued” com­pa­nies based on some fun­da­men­tal met­rics.  Value invest­ing is what not what I’m talk­ing about.

Values invest­ing is some­thing dif­fer­ent. It’s about invest­ing in align­ment to your per­son­al val­ue sys­tem.

When you own a share of a com­pa­ny (through pur­chase on the stock mar­ket) you own some (very small) frac­tion of a com­pa­ny. It’s your com­pa­ny.

Would you lead a life, for exam­ple, care­ful­ly select­ing healthy food but then own a com­pa­ny like McDonalds or Coke who’s val­ues could­n’t be fur­ther from “healthy liv­ing”?

Would you get upset at the irre­spon­si­ble behav­ior of “big banks” but then be the co-own­er of one? Even Dilbert jokes about how bankers are crim­i­nals. The asso­ci­a­tion is def­i­nite­ly part of our cul­ture at this point. Do you want to be asso­ci­at­ed with bankers? (I know many who are quite nice… but that’s not the point.)

Or, would you pre­fer to own CVS, proud of their anti-smok­ing stance? Or Whole Foods, hop­ing that they suc­cess­ful­ly bring health­i­er eat­ing to more com­mu­ni­ties?

In truth, it’s nev­er as black-and-white as any of us would like. Good peo­ple do bad things, as do good orga­ni­za­tions. We can think of it as a spec­trum. A spec­trum of val­ues, and a spec­trum of align­ment to those val­ues.

Maybe you can appre­ci­ate that Coke is start­ing to bow to pres­sure and remove unhealthy ingre­di­ents, but have zero-tol­er­ance for the dam­age Exxon is doing to the envi­ron­ment?

Mutual funds are a black box

The thing is, when you invest in the most rec­om­mend­ed funds for begin­ners, pas­sive index funds, you’re invest­ing in these com­pa­nies.

If you’re OK with that, fine. We all make com­pro­mis­es. I know I often com­pro­mise to make things eas­i­er. It’s smart to invest in pas­sive index funds, but maybe you can take some of that invest­ment and put it in com­pa­nies you admire? Maybe you can start to learn more about invest­ing so that you can do less of the stuff that does­n’t align to your val­ues and more of the stuff that does?

It’s not just indi­vid­u­als who are think­ing this way. Canada’s Second-Largest Christian Church Is Divesting from Fossil Fuels on social grounds. Norway’s sov­er­eign wealth fund is remov­ing four com­pa­nies from it’s fund because they’re turn­ing rain­forests into palm oil plan­ta­tions.  You may be skep­ti­cal that moral deci­sions are the only ones at play here, and you may be right. Even if there are many fac­tors con­tribute (like good mar­ket­ing or the fact that clean ener­gy may be a good invest­ment) we’re still get­ting more invest­ment that’s good for the plan­et.

Investing is like dieting

The more I think about the Elephant’s Paycheck Blueprint, the more par­al­lels I see to diet­ing. Successful diet­ing does­n’t come about with instant dra­mat­ic change to your diet. It starts with small steps. First walk instead of tak­ing the stairs. Then, cut out some bread. And desserts. Before you know it, you have a healthy life style with­out feel­ing over­whelmed.

Being healthy does­n’t mean nev­er hav­ing a can­dy bar.

Investing in align­ment to your val­ues does­n’t mean nev­er buy­ing a mutu­al fund. In fact, “social­ly respon­si­ble invest­ing” is start­ing to become a thing of sorts. RBC has a Canadian fund that incor­po­rates social, gov­er­nance, and envi­ron­men­tal con­sid­er­a­tions into tra­di­tion­al finan­cial analy­sis.

It does mean set­ting out on a jour­ney to learn about oth­er options. Options that aren’t beyond you. Options that are as easy as mutu­al funds, as reward­ing, and even per­haps more fun. Most impor­tant­ly, options that enable you to live a lit­tle more con­sis­tent­ly to your own per­son­al val­ue sys­tem.

The book

The first release of my book The Elephant in the Room has a Paycheck shipped last Thursday. It’s PDF only and unedit­ed. As such, it’s being sold as a dis­count with the promise of free future “dig­i­tal upgrades” (specif­i­cal­ly, to the edit­ed ver­sion and to ver­sions for kin­dle & iBooks).

It’s an easy read. Some peo­ple have read it in a sin­gle evening. It’s approach­able, and hope­ful­ly even a lit­tle inspir­ing.

It presents a sim­ple step-by-step plan for begin­ners to learn about div­i­dend invest­ing. There’s a bit of my per­son­al sto­ry, which I hope will inspire you. There’s also some unique aspects to the blue­print that are designed to make it fun and keep you moti­vat­ed.

I encour­age you to check it out. If you do, let me know what you think direct­ly or through the com­ments below.