Justin Harris on socially responsible investing
Financial advisor Justin Harris is hosting a Biznik event on October 7, called Financial Health 101. If you’re thinking about attending, and would like to know a little more about his style in advance, you’re in luck! Not only is he interviewed in the current episode of the Biznik Podcast, but I also interviewed him to learn more about his socially responsible approach to investing. (See? We know how to take care of our event hosts!)
Q: I’m really interested in learning more about what you call “socially responsible investing.” What do you mean by that?
Socially Responsible Investing (known as ‘SRI’) means that we don’t divorce our values from our investments. Rather than look away from how a corporation is making its profit, the mutual fund or portfolio manager will screen each company to be sure that the company is truly committed to improving the quality of life on this planet. In addition to this screening (which is the ‘feel-good’ portion of SRI) shareholder activism is the real power of SRI. Corporations rarely decide to stop pollution or using Third World child labor out of an act of conscience — it’s almost always a result of pressure from SRI mutual funds and other advocates at shareholder meetings. The third component of SRI is community investing — an alternative to keeping our money at commercial banks is choosing community development banks. They’re just as safe, have competitive interest rates, and actually use your money to help underprivileged and underserved populations.
Q: How did you become interested in socially responsible investing as opposed to that other kind?
Even before I started my practice as a Financial Advisor, I had noticed a gap between my talk (progressive, leftist politics) and how I invested my money. As I grew older I became more uncomfortable with this divergence — I think the catalyst was when I saw a quote by Vince Lombardi: “Character is what we do when no one else is watching.” So I investigated SRI which was then in its infancy. Now as an Advisor, I educate clients and students that we do have a choice of actually making a difference in this world without sacrificing long-term returns. And to be candid, I’m still as egocentric as ever — I experience myself as Special, love strokes, and run from suffering. But even as near-sighted and self-obsessed (i.e. human) as I am, my choices about where to invest still result in changes that are power, positive and sustainable.
Q: People have a lot of issues with money. Insecurities, fears, obsessions. What are some of the most common issues you see, and how do you work with your clients to resolve them?
We all have stories about our relationship to money, most of which are imprinted from our parents — or perspectives on money that ‘prove’ to us that we’re not like our parents! In any case, these stories, this romanticization of money isn’t inherently bad or good, but results in different consequences. Consequences that may not manifest until later in life when we can least afford them. The ‘stories’ are varied. Some people place themselves above money, or below and unworthy of money. Some experience themselves as ‘magical’ where they feel entitled to be financially irresponsible. And all our stories are dramatic or charming. But their appeal tends to wear off the older we get. In a nutshell, I help folks find a balance between obsessing about money and being in denial about their finances. And that ‘balance point’ will be different for each of us.
Q: Tell me about your book, The wealth of an Ordinary Life. When did you write it, why, and who is it for?
I wrote the book — it’s really a financial handbook — last year for my clients and students. I wanted to write a concise primer on all financial matters, including risk management, savings, retirement planning, SRI, and the emotional elements that either support or inhibit financial health. I chose the title in response to seeing all the suffering and financial dilemmas caused by folks trying to be ‘extraordinary’ when it came to their finances. There’s even an E-Trade ad on TV: BE BOLD! BE DARING! BE EXTRAORDINARY! while someone in their pajamas is day trading and making millions. Right… There’s a place to be extraordinary — in our vocations, with our lovers and families. But ‘ordinary’ can work just fine when it comes to our finances. The point — at least my emphasis — isn’t on generating material wealth at any cost. Rather it’s confronting our financial issues, visiting our financial tasks periodically, and then getting on with our lives!
Justin’s website is www.sociallyresponsibleinvesting.org
October 13th, 2006 at 10:01 am
Thanks for this posting. I think Justin Harris’ observation about the relationship people have with money (fears, insecurities, etc.) is an important - and often neglected - part of socially responsible investing.
May 22nd, 2007 at 3:12 pm
I love what you said about being ordinary in investing, and looking for extraordinary in other aspects of your life.
Aren’t most successful investors holding, not “day trading”? I read that book “Dumb Money: Adventures of a Day Trader” and his consensus was that day traders almost always lose money. Then I read, “A Random Walk Down Wall Street” and he concludes that investing in an index fund is the best investment one can make. Now that’s boring (although not socially conscious investing). And not spending the money one is “holding” in investments is really boring, ha, ha.