You may have heard an investing term floating around called impact investing, or values-based investing. It’s a growing trend, all about aligning your investments with your values.
Essentially, impact investing is when people choose investments that reflect and support their core values, missions, and principles.
More and more people are realizing that their investments directly support companies that may or may not align with their beliefs. So, if those companies or funds are endorsing practices or behaviors they’re adamantly against, then many consider it a problem.
What do we mean by this?
Well, think about the person who deeply cares about the environment. They likely would not want to invest in a company that negatively impacts the environment, right? Or the person who is deeply passionate about supporting the advancement of marginalized groups. They probably want mutual funds that invest in women-run companies or other minority businesses.
Since every individual is unique with different values and beliefs, how they invest will vary.
I’m a Christian. How Should I Invest?
For Christians, impact investing is called Biblically Responsible Investing (BRI). BRI is an approach that aligns investments with Biblical beliefs.
So, back to the question: as a Christian, how should I invest?
We’re not here to tell you how you should — or should not — invest. We’re simply here to help guide you as you choose which investments are right for you.
First, we suggest that you start by asking yourself, “what matters to me?”
Consider the day-to-day decisions you make. When choosing a church to attend, you likely do a little research and pick one that aligns with your beliefs. When looking for schools for your kids, you probably want to know what topics are being taught before you commit to sending them.
You’re avoiding places that don’t align with your beliefs and choosing to invest time in places that you agree with.
The same can be said for investments. Are you investing in companies that go against your Christian values?
Likely, you’ve never even considered this.
When we save for retirement, our goal is to put enough money away so that we can comfortably live without a paycheck. More than that, we like to see that our investments are doing well.
However, there’s a side to investing that many of us have never even considered: what am I supporting by investing in these funds?
Christian beliefs can and will vary. We’re not here to shame any party into action. We’re simply here to help you determine what’s important to you — then help you choose your investments based off that.
So where do you start?
We’d suggest that you begin by asking yourself some questions. The reality is, many of us choose investments based on their returns and nothing else.
However, if you consider your money as a financial resource that God has given you, you may start to look at investing from a different angle. Are your investments profiting from products and services that go against your beliefs? And if so, are you ok with that?
When choosing investments, begin by asking yourself these questions:
- What practices am I willing (or not willing) to support?
*see below for investments that you may consider supporting.
- What matters more: bigger return on investments or supporting investments that align with my beliefs?
- Am I willing to pay a higher internal fund cost for investments that support my beliefs?
- Am I willing to invest in both BRI and non-BRI funds?
Investments many Christians choose to support:
- Pro-life
- Workforce compensation equality
- Ethical labor practices
- Wholesome entertainment
- Principles that encourage sobriety
- Positive social impact
- Eco-friendly practices
How are BRI funds screened?
You may be saying, “Yes, I’d love to invest in companies that have a positive impact on the world, but how do I know where to start?”
Most people are not financial experts so finding faith-based investments can feel daunting. Thankfully, there are investment companies (like this one) that research publicly traded companies to understand what they’re supporting and how they are profiting. They screen and monitor funds — choosing ones that align with Biblical principles and removing ones that support agendas that go against those beliefs.
Are BRI funds more expensive?
In the past, BRI funds were more expensive. Now, they’re becoming much more affordable and costs are similar to many non-BRI funds. However, there are certainly funds that are less expensive than BRI funds. So, this takes us to one of the questions we visited above: “Am I willing to pay a higher investment fee for investments that support my beliefs?”
What next?
At TruthPoint, we offer BRI funds that are continually analyzed for practices that align with Biblical beliefs. If you’re interested in knowing more about the BRI options we offer, give us a call.
To continue to receive great value on retirement planning, connect with us on LinkedIn.