October 19, 2011

Ethical Alternatives: Inflation Fighters

Are your investments helping build a better world?

Prior to 2008, global financial events caused me to look closely at what was happening with my retirement savings. I did a complete investigation into what exactly was being done with my money. What I found out was troubling - damage was being done on my behalf so I could make money without doing any actual work or producing anything.

I learned that I had mutual funds invested in unsavory things like the Alberta Tar Sands. Further research unveiled weapons manufacturing, tobacco, and pharmaceutical companies (the same ones that are now targeting the under 5 crowd with their dodgy, profitable drugs). Most portfolios contain some or all of these unethical investments.

As a result of my inquiries, I liquidated everything. Since then I no longer watch the stock market in cycles of panic and elation, but rather, as a curiosity to see how the world I am extricating myself from is doing. But what about inflation?

We are told that unless we invest our money, it will slowly erode in purchasing power, and slip through our fingertips. Therefore, I have been brainstorming alternative strategies for overcoming inflation that are less harmful than traditional investments.

Ultimately, we need to work toward changing our monetary system and ending the manipulations by the financial industry and the governments that represent them. It is critical that we replace it with a system that benefits us all.

In the meantime, here are a few ideas that come to mind:
  • Green/ethical investing allows you to invest and make a positive difference at the same time. This form of investing has tripled (in the UK) in the last decade as people seek to reduce the damage done on their behalf. However, there are differing opinions of what, exactly, constitutes 'ethical', so results may vary. Note: This week is National Ethical Investment Week in the UK.
  • Deposit savings in a local credit union. Deposits are usually invested locally, so your investments are contributing toward improving conditions for you and your neighbours, not some CEO in a board room thousands of kilometers away. You still win even if you aren't making 10% annually.
  • Reduce your budget by the amount of inflation.
  • Grow a garden. Some of your best investments for the future may be things like seeds and gardening tools (and a good tent and camping gear).
  • Keep a stocked pantry including foods that continue to go up in price. Some that I keep on hand are : peanut butter, flour, rice, beans, powdered milk, nuts, and the like.
  • Cook your own food, bake your own bread.
  • Reduce your expectations.
  • Enjoy your money today without worrying what might happen in the future. For all we know, the entire financial system may collapse soon anyway.

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