How do you even know what you are holding?
When you do this, you are buying a stake in 3500 companies at once(!), which is both impressive and overwhelming. You just get an account at any brokerage like Vanguard, Etrade, Schwab or whatever, and dump all your money into one exchange-traded fund: VTI. On its own, index fund investing is ridiculously simple. The answer is, “You are trying to make your investing (especially index fund investing) have a better impact on the world.” So anyway, the first thing to understand with SRI is, “what problem am I trying to solve?” This is true in all of the main areas we care about – personal wealth, fitness and health, even relationships and happiness. And while your money and investments are certainly not the most important thing in life, they are still worthy of a bit of easy and effective optimization. And slightly better results, stacked up consistently over time, can lead to a much better life, or even a much better world. But by understanding the big picture, you can make slightly better decisions on average, which lead to slightly better results. What can I do with my money to help fix the world? And even better, is there a way I can make money in the process of fixing it?Īs long as you don’t get too hung up on getting every last detail perfect, because just like real life, investing is a haphazard and approximate and unpredictable thing. And since capitalism is just an expression of human behavior, the nature of capitalism itself may be starting to change. So it seems that this is not just a passing trend – people just might be starting to care a bit more. Public pension funds have started to “divest” from oil company stocks, and various social issues like human rights, child labor, climate change or corporate corruption have bubbled to the surface at different times.Īll of this has led to the exploding new field of Socially Responsible Investing (SRI), and a growing array of new ways to do it. How can I get the benefits of investing for early retirement without contributing to the decline of humanity?”Īnd in these nine years since then, the movement towards socially responsible investing has only grown. But when you buy the index, you’re getting oil companies, factory farm slaughterhouses and a million other dirty stories. I see your point that index fund investing is the best option.