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Speaker 1: Welcome to Kind of Money. I'm Joel and I and

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Speaker 1: Matt's and today we're discussing socially responsible investing, bad credit

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Speaker 1: cards and finding diamonds. Yeah, Jel, this is our Friday

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Speaker 1: Flight episode, and I feel like we need to lead

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Speaker 1: with that finding diamonds story because it's kind of random,

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Speaker 1: but it's also pretty amazing. Man. Evidently there is a

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Speaker 1: state park called the Crater of Diamonds State Park. Have

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Speaker 1: you ever heard of it? No, I've never heard of it.

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Speaker 1: So evidently it is the only place in the United

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Speaker 1: States where you can like find diamonds, you know, like

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Speaker 1: you do in other countries. I think, I don't know,

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Speaker 1: South African do in other countries. What do you mean

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Speaker 1: by that, Well, like there's a diamond production, isn't a

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Speaker 1: huge thing in the US. That's not my impression at least,

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Speaker 1: and so and I think I read it so, but

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Speaker 1: I'm pretty sure this is the only place in the

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Speaker 1: U s where you can find diamonds, and it's I'm

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Speaker 1: pretty sure the only place in the entire world where

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Speaker 1: it's open to the public to just show up and

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Speaker 1: you can find your own diamonds, sort of like when

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Speaker 1: you go apple picking. Up at the orchard. You know,

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Speaker 1: it's like whatever you pick, you keep you diving for diamonds.

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Speaker 1: So it's finders keepers, man, you're you're telling about that.

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Speaker 1: Just in the day. I was like, I'm fascinated one

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Speaker 1: that this exists, and too that people mind in there

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Speaker 1: and like just start mining for their own diamonds. No, like,

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Speaker 1: what do you bring your own pick? Acts? I mean,

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Speaker 1: how does this work? So No, it's just like in

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Speaker 1: a field and they till it up and you basically

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Speaker 1: just kind of kicked the dirt around and look for diamonds.

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Speaker 1: And so the reason I mentioned it to use because

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Speaker 1: I came across this article about this guy over Labor

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Speaker 1: Day and he found a nine carrot diamond while he

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Speaker 1: was there with some friends. Kind of you know, it's

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Speaker 1: just like, I guess the way to kind of spend

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Speaker 1: the day because oh, let's go to the diamonds State

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Speaker 1: Park kind of thing. And I thought that was so cool, man,

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Speaker 1: because evidently this is it's a legit thing. People often

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Speaker 1: find diamonds there. They're not they're not always record setting

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Speaker 1: sized diamonds, you know, like nine carrots is huge. Oftentimes

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Speaker 1: they're a lot smaller, but it is not abnormal for

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Speaker 1: a person once a day from that park to find

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Speaker 1: a diamond. And one of the big reasons I wanted

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Speaker 1: to mention that to use because I've told you before

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Speaker 1: how I pay the girls to find these quote unquote

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Speaker 1: trash treasures in our yard, basically small like little bits

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Speaker 1: of old glass, you know from years of people just

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Speaker 1: kind of throwing their trash out of the house, I

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Speaker 1: guess instead of putting it in the trash can, which

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Speaker 1: never made any sense to me. But there is a

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Speaker 1: decent amount of glass and I don't want the kids

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Speaker 1: cutting their feet on it. So anytime they find a

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Speaker 1: tiny little piece of glass, they get paid a nickel.

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Speaker 1: Little did I know that I was training them to

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Speaker 1: find diamonds. This is your your new like you stop

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Speaker 1: investing in in your tax advantage retirement to spend all

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Speaker 1: of our days now at the diamonds State Diamonds Crater

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Speaker 1: State Park. And it's in Arkansas, and so I actually

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Speaker 1: haven't looked up exactly where it is, but dude, we're going,

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Speaker 1: Like there's no doubt my mind, at some point in

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Speaker 1: my life, I'm gonna go there, and you know, I'm

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Speaker 1: gonna be really disappointed if I don't leave there with

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Speaker 1: at least like a two to three carrot sized diamond,

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Speaker 1: you know, with your four kids in to you guys all,

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Speaker 1: you know, searching as hard as you can, it's gonna happen.

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Speaker 1: I feel like that's we're gonna sweep the fields where

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Speaker 1: we're gonna comb it, you know, like spaceballs, where they're

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Speaker 1: like combing the desert exactly exs try and come. I

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Speaker 1: feel I feel like that's like one alternate, uh, you know,

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Speaker 1: way to pay for retirement idea is like go to

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Speaker 1: this diamond state park every day for like a year

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Speaker 1: and just trying to find your retirement through finding free

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Speaker 1: diamonds there. And then you know, one other way is

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Speaker 1: to hope your kid becomes a professional athlete today. I

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Speaker 1: think you have a better chance of actually finding a diamond,

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Speaker 1: you really do, your kid becoming a professional athlete with

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Speaker 1: a with a massive sponsorship, because that's how they make

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Speaker 1: the big bucks. Let's be honest, that's true, that's true.

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Speaker 1: Let's get to some more stories that we found interesting,

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Speaker 1: maybe more relevant story. I just thought that was really interesting.

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Speaker 1: But it's super interesting. It's totally worth mentioning because it's fascinating.

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Speaker 1: One what you the guy the diamond he found was

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Speaker 1: worth something close to two dollars, like two dollars. That's crazy,

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Speaker 1: you know, after it gets cut. Uh And yeah, it's yeah,

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Speaker 1: mind blowing dude, that is. That is all right. So well,

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Speaker 1: let's get to some updates on some previous stories that

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Speaker 1: we've mentioned. Um, there's kind of some new stuff happening

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Speaker 1: in the stimulus deal sphere. And there was some optimism

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Speaker 1: earlier this week. I think on Monday, there was some

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Speaker 1: optimism Monday, Tuesday, I think folks were in pretty good

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Speaker 1: spirits about where things were headed now. But then Wednesday

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Speaker 1: hit not so much, right, So, yeah, the the optimism

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Speaker 1: about a stimulus deal is on hold. There's a chance,

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Speaker 1: um that you know, we might still see one in

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Speaker 1: the coming weeks or months. So yeah, the political game

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Speaker 1: of football continues with the stimulus bill and and much

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Speaker 1: to the shagrin of many many people in our country,

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Speaker 1: small business owners, individuals who who are hurting right now,

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Speaker 1: um and can't afford for you know, the our politicians

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Speaker 1: are are the people who have been elected to represent

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Speaker 1: us going back and forth politically, um, and really it

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Speaker 1: seems like it's on both sides, both sides of the

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Speaker 1: aisle are just not taking this seriously enough um, And

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Speaker 1: that's just kind of hard to sit back and watch,

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Speaker 1: especially considering the effect that it had in March, those

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Speaker 1: direct stimulus checks in particular to people, the PPP money

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Speaker 1: that was made available for small businesses had a real impact,

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Speaker 1: a real positive impact on the economy and a time

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Speaker 1: when it needed it. And we're getting to that point again,

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Speaker 1: and I don't know, I just hate seeing our politicians

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Speaker 1: essentially standing by holding up their hands and making it

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Speaker 1: seem like it's somebody else's fault. Yeah, it's dude. It's

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Speaker 1: so political, and with it being so close to the election,

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Speaker 1: I think there's I personally think there's little chance of

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Speaker 1: anything actually passing before the election. But it's like stimulus

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Speaker 1: bill whiplash, because I mean, it's we're going back and

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Speaker 1: forth as far as like, oh, it seems like it

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Speaker 1: seems like it's gonna happen. Oh, it's not actually gonna happen.

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Speaker 1: So hopefully we can kind of smooth the right out

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Speaker 1: a little bit for our listeners, and we will certainly

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Speaker 1: keep our listeners posted once there is real news and

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Speaker 1: we know how that's going to affect our money. In

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Speaker 1: another note, right about the election in your money. Earlier

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Speaker 1: this week, we talked about this in response to a

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Speaker 1: question on Monday, but new Vanguard annalysis found that market

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Speaker 1: returns are typically higher in an election year, combined with

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Speaker 1: the fact that there is less volatility both one hundred

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Speaker 1: days prior and hundred days post presidential elections. Obviously, every

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Speaker 1: election is meaningful and has consequences, but it doesn't have

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Speaker 1: much impact on our actual investments. So we wanted to

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Speaker 1: take another opportunity to point to folks to essentially not

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Speaker 1: worry about their money as it pertains to the election. Yeah,

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Speaker 1: elections have consequences, I mean we see that play out

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Speaker 1: every day and in particular when when a crisis hits,

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Speaker 1: but they don't necessarily have an impact on our investments.

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Speaker 1: And that Vanguard analysis was just helpful. Again, it's just

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Speaker 1: another reassurance that what happens on November three just isn't

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Speaker 1: going to have a major impact on the markets, and

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Speaker 1: historically there's there's actually less volatility than then there typically

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Speaker 1: is in a normal year. So bottom line, what what

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Speaker 1: we get from that is to keep investing as usual,

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Speaker 1: don't let the headlines sway you into making any real

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Speaker 1: changes with what you're doing in regards to investing. Yeah,

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Speaker 1: this is a call to to not invest more or

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Speaker 1: less right, but just to keep doing what you've been doing,

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Speaker 1: I mean more fine, and like if you want to

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Speaker 1: keep it, if you want to put a higher percentage

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Speaker 1: of your pay, but make sure you just you keep

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Speaker 1: it there, Like, don't try to invest more because you're

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Speaker 1: trying to take advantage of maybe the market going up

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Speaker 1: right because of the election. Another update as well, Man

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Speaker 1: on a related note, you know you now have until

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Speaker 1: November twenty one to claim your first stimulus check. You know,

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Speaker 1: the the October fifteenth deadline for non filers. It was extended.

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Speaker 1: So for example, if you're a college student who didn't

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Speaker 1: need to file taxes this year because last year you

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Speaker 1: made less than twelve dollars, we're talking to you and

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Speaker 1: you can use the non filer portal, which you can

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Speaker 1: find on the I R S website. Will make sure

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Speaker 1: to link to that page in our show notes. Yeah,

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Speaker 1: speaking of deadlines, by the way, Matt tax filing deadline

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Speaker 1: is October fifteenth, if anybody filed an extension. A bunch

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Speaker 1: of deadlines coming to a lot of deadlines, A lot

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Speaker 1: of deadlines, um and so Yeah, a couple couple more

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Speaker 1: stories that we found interesting this week. Let's talk about

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Speaker 1: online banks. Some of our favorite ones, but we've mentioned

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Speaker 1: many times we like Ally, C, I, T and Discover.

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Speaker 1: They're all great and there are other great ones too.

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Speaker 1: There's a brand new Credit Karma checking the account. It's

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Speaker 1: worth checking out if you already have a savings account

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Speaker 1: with Credit Karma. And the best thing about this new

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Speaker 1: wave of neo banks online banks is that there are

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Speaker 1: virtually no fees. And so this Credit Karma offering, this

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Speaker 1: new combo of savings and checkings that they have available,

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Speaker 1: it's just another one worth considering because the benefits are

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Speaker 1: pretty great. Yeah, and we love no fees man. Also,

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Speaker 1: it's been quite a while since we we mentioned this,

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Speaker 1: but Fitness Bank that was recently recommended by a listener Benjamin,

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Speaker 1: and I'm pretty sure we've talked about it before. But

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Speaker 1: you can learn higher rates by taking more steps every day.

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Speaker 1: It's kind of a nice incentive to stay healthy, right,

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Speaker 1: And we realize this might be, you know, kind of

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Speaker 1: more of a niche account, but if you are already

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Speaker 1: measuring your steps, why not get paid? Why not earn

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Speaker 1: more money? By kind of linking those accounts. I think

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Speaker 1: that's pretty cool. Yeah, if you if that interests you, you

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Speaker 1: you can got a fitness bank dot fit and I

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Speaker 1: think they're the best right there, paying right now. And

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Speaker 1: I hesitate to say it, Matt, because those racially changed

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Speaker 1: in two days. Every day, yeah right now, at least

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Speaker 1: as of the time of this recording. Point nine. If

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Speaker 1: you walk twelve thousand steps every day, that's pretty good. Yeah.

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Speaker 1: So yeah, if you can commit to that, then you

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Speaker 1: can get paid. The thing is, I don't measure my

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Speaker 1: steps that also, I have no idea like how far

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Speaker 1: that is? Yeah, is that a lot of steps? It

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Speaker 1: must be. I think it is good if it's their

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Speaker 1: top tier. But yeah, if you're a serious walker or runner,

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Speaker 1: go for it. Yeah for sure. Speaking of new accounts,

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Speaker 1: venmo launched its first credit card, and I think this

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Speaker 1: makes a ton of sense, as as so many people

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Speaker 1: use the platform already to send money to friends instead

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Speaker 1: of using physical cash. Obviously, Venmo has just like massively

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Speaker 1: grown in popularity, and one of its cool features is

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Speaker 1: that instead of a predetermined category of spending that gets

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Speaker 1: a higher bonus, Venmo looks specifically in areas where you

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Speaker 1: spend the most month. That's super cool. Yeah, and then

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Speaker 1: it automatically applies that higher cash back percentage, which is

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Speaker 1: three percent, where if you spent let's says, at home

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Speaker 1: improvement stores that month, you're gonna get three cash back

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Speaker 1: on specifically those purchases. Um, so it is, and the

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Speaker 1: money just shows up in your Venmo account like automatically,

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Speaker 1: which is pretty cool. It's cool like you don't have

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Speaker 1: to like actively go in there and redeem it, which

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Speaker 1: you can sometimes forget to do. Yeah, yeah, for sure.

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Speaker 1: So I mean, I don't know, I still like kind

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Speaker 1: of the straight up two percent cash back or some

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Speaker 1: of the other credit cards that maybe have even higher

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Speaker 1: words on areas where you know you're going to spend

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Speaker 1: a whole lot type of groceries six percent baby exactly,

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Speaker 1: blue cash Preferred. I mean, it's great, it's great, it

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Speaker 1: works and and so yeah, but it is interesting, especially

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Speaker 1: if you use Venmo and you're looking for a new

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Speaker 1: credit card option. I think it's definitely one worth considering, totally. Yeah.

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Speaker 1: And so while the Venmo credit card is a great option,

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Speaker 1: store or retail cards are still pretty terrible, man, specifically

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Speaker 1: because of the interest rate that they're charging. Um. You know,

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Speaker 1: hopefully this shouldn't affect most of our listeners since they

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Speaker 1: pay off their balances every month, right right, right, listeners.

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Speaker 1: But if maybe you forget or maybe you are furloughed

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Speaker 1: and you can't make a payment that month, there's a

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Speaker 1: chance you are going to be stuck paying a sky

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Speaker 1: high interest rate of thirty and so in these cases,

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Speaker 1: it's just best to avoid these store cards, you know,

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Speaker 1: avoid it, like the ROHNA. You want to make sure

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Speaker 1: to skip those all together. Like the ROHNA, listen to

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Speaker 1: you like GONN, like the COVID. I'm calling it coronavirus.

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Speaker 1: I'm calling that ROHNA way more than calling it COVID.

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Speaker 1: These Yeah, it sounds more fun. Yeah, there's not much

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Speaker 1: fun about these days though, right now. But you gotta

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Speaker 1: try to find any sort of silver lining you care,

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Speaker 1: are some silver linings, speaking of which, Matt, speaking of

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Speaker 1: silver linings, like, I think it's okay. I think for

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Speaker 1: us to find things that are good in our lives

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Speaker 1: about this time, I think we almost have to. Yeah, yeah,

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Speaker 1: you you have to like these these bright spots, right

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Speaker 1: of course, of course. And on that note, there's this

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Speaker 1: interesting article in the Financial Times, where one of the

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Speaker 1: writers asked a specific question, once you learn that you

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Speaker 1: can do something cheaper, faster and better at home, will

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Speaker 1: you ever go back to paying someone else more to

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Speaker 1: do it for you? I thought that was a great

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Speaker 1: question and made me do some thinking. And there are

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Speaker 1: things that we've all changed during the pandemic, right. She discusses,

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Speaker 1: in particular dyeing her hair at home, that she's unlikely

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Speaker 1: to go back to her old way of paying like

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Speaker 1: ten times surprice to go get it done in a salon.

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Speaker 1: And while you and I were all about taking the

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Speaker 1: frugal path, I guess the question is do you think

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Speaker 1: it will last? What are your thoughts, Like, are there

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Speaker 1: any changes that you've made in your life that you're like,

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Speaker 1: There's no way I'm going back to spending big box

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Speaker 1: like I used to on something. I'm d I y

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Speaker 1: in it at home from here on out. Well, yeah,

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Speaker 1: I mean, obviously that's the path that we're all about, right,

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Speaker 1: I mean, and I'm I'm a pretty cheap guy. There's

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Speaker 1: very few things that you know that were paid top

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Speaker 1: dollar for. I'm thinking about how like I bolliage Kate's hair,

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Speaker 1: you know, like that's that that's the fancy technique when

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Speaker 1: it comes to to dye in hair. Speaking of money,

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Speaker 1: you can save you know, at a salon. But you know,

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Speaker 1: I think whether or not folks stick with their frugal ways,

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Speaker 1: I think a lot of it depends on the social factor.

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Speaker 1: You know. We are recruitures who crave community. And though

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Speaker 1: we've been able to figure things out on our own

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Speaker 1: a little bit to a certain extent, right, Like we

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Speaker 1: can look up tutorials on YouTube, we can have virtual

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Speaker 1: hangs via zoom. I don't think that this is gonna

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Speaker 1: be a viable long term substitute if the real thing

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Speaker 1: is better, uh, and if the real thing is now

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Speaker 1: safe to resume, you know, if if we're able to

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Speaker 1: resume that activity. I don't necessarily feel that those frugal counterparts,

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Speaker 1: those substitutes are gonna stick around if it involves social interactions, right,

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Speaker 1: and so I'm specifically thinking of like Atlanta United, We're

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Speaker 1: terrible this year. So actually this is a great year

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Speaker 1: for us to not attend matches in person. But kay,

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Speaker 1: now we've gotten decent enjoyment out of watching matches on

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Speaker 1: TV at home. It's saving us money. However, it doesn't

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Speaker 1: replace going to an actual match, and and and cheering

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Speaker 1: might you know, cheering your team on with fifty other people.

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Speaker 1: And so that's an example where as soon as it's

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Speaker 1: safe to do so, that's something that we're totally going

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Speaker 1: to resume and we are willing to pay the money

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Speaker 1: in order to do that. This is an area because

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Speaker 1: of the value that we're gaining from that, the cost

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Speaker 1: is going to totally be worth it. Yeah, I completely agree,

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Speaker 1: and and that I'm like extrovert, so I agree. I

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Speaker 1: think anything that I think the things that that I

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Speaker 1: crave the most are interactions with my friends and people

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Speaker 1: that I'm close to, just like hugs. I mean that

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Speaker 1: you can't hug people is obviously I think it's one

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Speaker 1: of the hardest things about coronaviruses. It well, certainly what

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Speaker 1: we are the rona as you say, Yeah, it's certainly

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Speaker 1: what we have felt the most, right Like, obviously individuals

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Speaker 1: have felt their their incomes affected by this, but I

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Speaker 1: think everybody has certainly realized and you know, been affected

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Speaker 1: by the fact that we you know, the social limitations

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Speaker 1: and restrictions that have been placed upon us. And I

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Speaker 1: feel like that's the number one thing. And even like strangers,

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Speaker 1: like waving and stuff with masks. I don't know, it's

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Speaker 1: there's like a there's like this strange feeling even just

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Speaker 1: when you see somebody walking around the neighborhood that normally

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Speaker 1: you would introduce yourself to and and now you feel

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Speaker 1: way less enthusiastic about about doing so. But yeah, I

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Speaker 1: think there there are certain changes that will keep around

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Speaker 1: after a vaccine is found and things start to look

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Speaker 1: a little bit more like they did in the beginning

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Speaker 1: of this year. But the things I'll be looking to reimplement,

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Speaker 1: in particular, are fun things that I love to do

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Speaker 1: with other people. I think if it's an experience with

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Speaker 1: friends with family, those are the things that I'm going

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Speaker 1: to bring back in spades and be willing to spend

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Speaker 1: money on. Some of the other changes, I don't know,

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Speaker 1: I might stick around, and I think some of them

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Speaker 1: are good changes, and they've been good for our family,

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Speaker 1: even though there there have been challenges, right sure, man, Yeah,

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Speaker 1: And I mean and all of this to say as well,

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Speaker 1: like we're not gonna tell folks that to not maintain

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Speaker 1: their frugal ways, like we are all about that, and

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Speaker 1: a lot of reports have shown how many individuals how

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Speaker 1: many families have been able to pay down debts during

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Speaker 1: this period of time, you know, as they're spending less

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Speaker 1: of their money. So I love that individuals are being

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Speaker 1: a little more frugal. But we'll, you know, we'll just

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Speaker 1: have to see how that's going to affect us down

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Speaker 1: the road once there is a vaccine on hands, see

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Speaker 1: if that fruit gality sticks exactly. All right, well, we

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Speaker 1: want to talk about socially responsible investing as e s

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Speaker 1: G investing. Yes, we'll get to that after the break.

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Speaker 1: We've actually partnered with Ali recently and they've got some

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Speaker 1: really smart people over there. Lindsay Bell in particular, is

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Speaker 1: somebody who has just like so much knowledge on the

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Speaker 1: socially responsible investing e s G space, and we wanted

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Speaker 1: to pick her brain, and so we'll chat with her

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Speaker 1: right after this break. All right, we're back from the break,

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Speaker 1: and now it's time to talk about sustainable investing. We

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Speaker 1: did a deep dive into socially responsible investing a while

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Speaker 1: back on the show, but happy to talk with Lindsay

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Speaker 1: Bell of Ally invest who has thought really deeply on

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Speaker 1: this subject. So Lindsay, thanks so much for joining us,

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Speaker 1: Thanks for having me so Lindsay E s G or

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Speaker 1: socially responsible investing. It's been quite a buzzword in the

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Speaker 1: investing world over the last few years. Uh and and

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Speaker 1: one in four investing dollars is now flowing into these funds,

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Speaker 1: and Mornings are actually found recently that sustainable funds have

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Speaker 1: outperformed conventional funds for the past few years, and that

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Speaker 1: they weathered the recent downturn so much better than other

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Speaker 1: fund counterparts with fewer losses. So, with all that being said,

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Speaker 1: how should young investors, in your opinion, approach these funds

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Speaker 1: considering those data points? Is there real merit to including

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Speaker 1: those funds in our portfolio? Yeah, I definitely think there's

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Speaker 1: real merit to including these funds in an investment portfolio

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Speaker 1: given the information that we know about investing in E

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Speaker 1: s G OR or sustainable investing at this point in time.

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Speaker 1: The numbers speak for themselves. You just listed off some

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Speaker 1: really great numbers there. Um, we've seen data from State

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Speaker 1: Street that shows that investing in the E s G

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Speaker 1: space has increased by more than a third to over

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Speaker 1: thirty trillion between ten and ten, which is a huge

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Speaker 1: increase in just a couple of years. Um. The reason

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Speaker 1: that that these types of companies or investments or funds

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Speaker 1: should be included in a portfolio. Now is the way

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Speaker 1: we think about it is, these are the issues that

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Speaker 1: are going to be very impactful to not only our

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Speaker 1: society and our countries, but also to the way that

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Speaker 1: businesses operate successfully in the future. What we know now

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Speaker 1: is that caring about the climate, caring about your employees,

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Speaker 1: caring about the communities that you operate make you a

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Speaker 1: better operator as a corporation, and it also helps you

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Speaker 1: think about your future from a longer term perspective. Um.

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Speaker 1: So we hear lot of times about one of the

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Speaker 1: gripes about the quarterly earnings cadence or or public companies

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Speaker 1: thought processes is that it's too short term. Well, thinking

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Speaker 1: along the lines of E s G. Are sustainable in

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Speaker 1: a sustainable way helps these sort of companies and their

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Speaker 1: leaderships teams think longer term. And as an investor, you

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Speaker 1: want to invest in a company that is is working

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Speaker 1: to make their profits and operations much better over the

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Speaker 1: longer term than just one quarter or two quarters. Right. Yeah,

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Speaker 1: it's not about just making a quick buck. Um. And

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Speaker 1: so let let's talk about to just the kind of

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Speaker 1: companies that make up these different funds, right, you know,

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Speaker 1: the lack of including say oil companies and inn e

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Speaker 1: s G fund for instance, like that makes sense, but

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Speaker 1: other companies like Facebook that they're typically included and they

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Speaker 1: kind of come with their own set of issues, you know,

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Speaker 1: often related to to privacy, to personal data. What are

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Speaker 1: the key metrics behind which companies will you know qualify

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Speaker 1: for e s G designation in a portfolio? There's still

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Speaker 1: lacks clarity around what are the key metrics that designate

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Speaker 1: a company or fund as as e s G in particular.

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Speaker 1: And there's a lot of companies out there right now,

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Speaker 1: like morning Star for one, M s c I at

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Speaker 1: Thompson Reuters and others that give these companies e s

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Speaker 1: G ratings usually on a scale of zero to one

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Speaker 1: hundred that can help you determine how sustainable companies operations are.

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Speaker 1: But the reality is the e s G metrics they're

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Speaker 1: just not a common part of mandatory financial reporting, so

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Speaker 1: sometimes it's it's hard to figure out, and because they're

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Speaker 1: more qualitatively driven than quantitatively driven, it's hard to assess

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Speaker 1: just simply on your own how sustainable or e s

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Speaker 1: G friendly a company is. UH and the other thing

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Speaker 1: that kind of makes it difficult to determine how e

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Speaker 1: SG friendly a company is. Is it a lot of

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Speaker 1: those metrics. Those companies that offer those metrics you have

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Speaker 1: to pay for them, so they're not necessarily always readily

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Speaker 1: available to the retail investors. So your normal folks like

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Speaker 1: you and I, if we want to figure this out,

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Speaker 1: it can't be. It's not that easy. Now, companies in

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Speaker 1: general have done a much better job of making their

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Speaker 1: stance on e s G more transparent. For example, ally Financial,

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Speaker 1: the company that I work for is like several other

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Speaker 1: companies that annually releases our report. They're called CRS reports

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Speaker 1: um so, So what they do is they go into

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Speaker 1: their social responsibility and they talk about it from you know,

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Speaker 1: a community perspective and employee perspective um a climate change perspective,

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Speaker 1: a diversity a perspective. And you can look at those

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Speaker 1: and you can find them on their investor relation websites

429
00:20:50,119 --> 00:20:52,280
Speaker 1: usually and you can dig through them and it gives

430
00:20:52,280 --> 00:20:55,600
Speaker 1: you a better feel for what they're doing to serve

431
00:20:55,680 --> 00:20:59,080
Speaker 1: the causes that they care about and what what impacts

432
00:20:59,119 --> 00:21:02,120
Speaker 1: are most important to them. But you've got to rule

433
00:21:02,200 --> 00:21:04,600
Speaker 1: your sleeves up and do a little work to figure

434
00:21:04,640 --> 00:21:07,800
Speaker 1: out how e s G friendly some of these companies are.

435
00:21:08,400 --> 00:21:11,679
Speaker 1: I love that it is helping keep companies accountable, at

436
00:21:11,720 --> 00:21:13,439
Speaker 1: least to a certain extent, right that they that they

437
00:21:13,440 --> 00:21:16,840
Speaker 1: are having to release information to let people know like

438
00:21:16,880 --> 00:21:19,400
Speaker 1: how they're handling some of these issues that are important

439
00:21:19,400 --> 00:21:22,479
Speaker 1: to investors. At the same time, sometimes there's a question

440
00:21:22,560 --> 00:21:25,640
Speaker 1: of whether or not investing in a socially responsible way

441
00:21:25,800 --> 00:21:28,879
Speaker 1: has the impact that we're hoping for as investors. Right,

442
00:21:29,040 --> 00:21:31,639
Speaker 1: most people tend to agree that where we spend our

443
00:21:31,680 --> 00:21:34,760
Speaker 1: dollars is more important for driving change than where we

444
00:21:34,800 --> 00:21:38,840
Speaker 1: actually invest them. So so lindsay, does investing in diversified

445
00:21:38,880 --> 00:21:42,160
Speaker 1: E s G funds actually make a meaningful difference for

446
00:21:42,160 --> 00:21:45,160
Speaker 1: for those factors that we're talking about. Yeah, I mean,

447
00:21:45,240 --> 00:21:48,120
Speaker 1: that's that's another age old question to when it comes

448
00:21:48,160 --> 00:21:51,399
Speaker 1: to E s G investing. But I think investing in

449
00:21:51,520 --> 00:21:55,040
Speaker 1: companies that are concentrating on one or more of these criteria,

450
00:21:55,080 --> 00:21:59,120
Speaker 1: whether it's environmental, social governance, you know, by offering your

451
00:21:59,119 --> 00:22:02,720
Speaker 1: support and invest in these companies, it helps them to

452
00:22:02,800 --> 00:22:05,840
Speaker 1: realize that they're making more of an effort than just

453
00:22:05,920 --> 00:22:09,840
Speaker 1: focusing on profitability. They're seeking to drive positive impacts for

454
00:22:09,880 --> 00:22:14,280
Speaker 1: their communities, their countries, internally with employees and and and

455
00:22:14,400 --> 00:22:18,080
Speaker 1: to better position themselves for the future. Um So, like

456
00:22:18,119 --> 00:22:20,560
Speaker 1: I said, you've got to do your homework. But it's

457
00:22:20,600 --> 00:22:26,359
Speaker 1: no wonder that of investors in millennial investors are interested

458
00:22:26,400 --> 00:22:31,560
Speaker 1: in sustainable investing as of twenty nineteen. It's because you

459
00:22:31,640 --> 00:22:34,080
Speaker 1: also get that added benefit, not just the return on

460
00:22:34,119 --> 00:22:37,199
Speaker 1: your investment and on the particular stock or fund that

461
00:22:37,240 --> 00:22:40,199
Speaker 1: you invest in, but also it gives you that return

462
00:22:40,200 --> 00:22:43,000
Speaker 1: of feeling good about the investments that you do own.

463
00:22:43,080 --> 00:22:45,960
Speaker 1: And of course this doesn't necessarily have to represent your

464
00:22:46,160 --> 00:22:49,879
Speaker 1: entire portfolio, of course, but like I said, more and

465
00:22:49,920 --> 00:22:52,600
Speaker 1: more researchers showing the companies that do focus on these

466
00:22:52,640 --> 00:22:56,160
Speaker 1: issues are able to become more profitable and they do

467
00:22:56,880 --> 00:23:01,360
Speaker 1: see better or at least competitive investment return. Right. Well, yeah,

468
00:23:01,480 --> 00:23:03,080
Speaker 1: so on that note, you know, you you mentioned r

469
00:23:03,080 --> 00:23:06,400
Speaker 1: o I UH and returns. Let's talk about the performance

470
00:23:06,440 --> 00:23:08,280
Speaker 1: to you know, what does the data tell us about

471
00:23:08,480 --> 00:23:11,560
Speaker 1: the returns that investors are getting by investing their money

472
00:23:11,720 --> 00:23:14,399
Speaker 1: in E s G funds versus they're they're non E

473
00:23:14,560 --> 00:23:17,840
Speaker 1: s G counterparts? Yeah, I mean, like you said, morning

474
00:23:17,840 --> 00:23:20,520
Speaker 1: Star put out a report, and these E s G

475
00:23:20,680 --> 00:23:23,399
Speaker 1: funds were able to to outperform the market, and they

476
00:23:23,400 --> 00:23:26,679
Speaker 1: were able to sustain the downturn in the market that

477
00:23:26,720 --> 00:23:30,399
Speaker 1: we just saw better than other companies have had. And

478
00:23:30,440 --> 00:23:35,080
Speaker 1: that's because what we have seen is that having an

479
00:23:35,080 --> 00:23:39,800
Speaker 1: E s G focus has resulted in mitigated risks on

480
00:23:39,840 --> 00:23:45,120
Speaker 1: the downside UH and reduced volatility in general for investments

481
00:23:45,160 --> 00:23:49,240
Speaker 1: like this, so that way you can achieve sustainable returns

482
00:23:49,240 --> 00:23:53,359
Speaker 1: over the longer term. It might say, perhaps prohibit the

483
00:23:53,440 --> 00:23:55,800
Speaker 1: upside to some extent. It's similar to the way I

484
00:23:55,880 --> 00:23:58,240
Speaker 1: think about it is. You know, if you invest in

485
00:23:58,280 --> 00:24:03,240
Speaker 1: a portfolio six equities fixed income, which is your standard

486
00:24:03,320 --> 00:24:07,639
Speaker 1: portfolio UH that a traditional financial advisor would tell you

487
00:24:07,640 --> 00:24:10,280
Speaker 1: to invest in UH, the reason you have the fixed

488
00:24:10,280 --> 00:24:13,440
Speaker 1: income component is to to shield you on the downside

489
00:24:13,800 --> 00:24:16,560
Speaker 1: UM though it may limit some of your upside risk.

490
00:24:16,760 --> 00:24:20,040
Speaker 1: It feels the same with E s G investments. Although

491
00:24:20,560 --> 00:24:23,440
Speaker 1: like we like, the morning Star reports shows zz s

492
00:24:23,480 --> 00:24:26,320
Speaker 1: G investments were able to outperform and the most recent

493
00:24:26,920 --> 00:24:30,040
Speaker 1: downturn and upswing, and I think part of that is

494
00:24:30,280 --> 00:24:33,280
Speaker 1: due to their exposure to the technology sector, which you

495
00:24:33,320 --> 00:24:36,560
Speaker 1: guys kind of alluded to previously. It's it's a little

496
00:24:36,560 --> 00:24:39,719
Speaker 1: bit of a questionable exposure that that a lot of

497
00:24:39,720 --> 00:24:44,280
Speaker 1: these funds have because technology. While they're not creating the

498
00:24:44,320 --> 00:24:47,639
Speaker 1: carbon emissions necessarily of some of the big energy or

499
00:24:47,720 --> 00:24:52,120
Speaker 1: utility companies that are leaving massive carbon footprints, they do

500
00:24:52,240 --> 00:24:56,800
Speaker 1: have their own privacy issues, diversity issues. Um, there's many

501
00:24:56,840 --> 00:24:59,480
Speaker 1: ethnic concerns. They come up, especially when you think of

502
00:24:59,600 --> 00:25:02,879
Speaker 1: names a Facebook for example. But like I said, E

503
00:25:03,000 --> 00:25:06,200
Speaker 1: s G investing can be subjective, but it has been

504
00:25:06,240 --> 00:25:10,479
Speaker 1: proven to reduce volatility and mitigate risk uh in periods

505
00:25:10,480 --> 00:25:14,560
Speaker 1: of uncertainty. Lindsay, what about the expenses when it comes

506
00:25:14,560 --> 00:25:16,719
Speaker 1: to E s G funds. It seems like they've been

507
00:25:16,760 --> 00:25:19,919
Speaker 1: coming down quite a bit, but they're they're still higher

508
00:25:19,920 --> 00:25:22,080
Speaker 1: than than a whole lot of the total stock market

509
00:25:22,119 --> 00:25:24,479
Speaker 1: index funds let's say that are out there. So, so,

510
00:25:24,520 --> 00:25:27,919
Speaker 1: how should investors think about the expense ratio in a

511
00:25:27,920 --> 00:25:30,720
Speaker 1: potential fund when they're trying to make that choice? Yeah,

512
00:25:30,760 --> 00:25:33,840
Speaker 1: I mean, the expension of ratio has to absolutely be

513
00:25:33,920 --> 00:25:36,800
Speaker 1: something that you take into consideration with any investment, not

514
00:25:36,920 --> 00:25:40,480
Speaker 1: just E SG. They have come down, but it's something

515
00:25:40,480 --> 00:25:42,560
Speaker 1: that we definitely have to keep an eye on. I know,

516
00:25:42,640 --> 00:25:46,879
Speaker 1: We have a robo advisor UH portfolio that is E

517
00:25:47,160 --> 00:25:51,560
Speaker 1: s G focused and it's something that we're constantly researching

518
00:25:52,080 --> 00:25:55,240
Speaker 1: potential new opportunities because some of the funds in there

519
00:25:55,320 --> 00:25:58,440
Speaker 1: might have a little bit of a higher fee than

520
00:25:58,600 --> 00:26:02,600
Speaker 1: some of the you know, SMP or large large cap

521
00:26:02,720 --> 00:26:07,200
Speaker 1: MidCap of normal indusicries that we're trying to to benchmark against.

522
00:26:07,240 --> 00:26:09,680
Speaker 1: When you when you're thinking about E s G, there

523
00:26:09,760 --> 00:26:11,600
Speaker 1: is a little bit of a premium that you're going

524
00:26:11,640 --> 00:26:14,240
Speaker 1: to have to pay, but again that could be worth

525
00:26:14,280 --> 00:26:17,359
Speaker 1: a given given the upside potential. The other thing that

526
00:26:17,520 --> 00:26:20,720
Speaker 1: I would suggest investors consider when they're looking at E

527
00:26:20,920 --> 00:26:23,359
Speaker 1: s G as well as any other investment b E

528
00:26:23,520 --> 00:26:28,000
Speaker 1: s G more in particular because it is a newer trend,

529
00:26:28,560 --> 00:26:31,800
Speaker 1: especially from an E t F perspective, you want to

530
00:26:31,880 --> 00:26:35,199
Speaker 1: look for E t F or mutual funds and have

531
00:26:35,280 --> 00:26:39,600
Speaker 1: a longer history behind their back, and also have a

532
00:26:39,680 --> 00:26:41,880
Speaker 1: decent amount of volume, because the last thing you want

533
00:26:41,920 --> 00:26:45,679
Speaker 1: to do is buy into one of these instruments and

534
00:26:45,800 --> 00:26:48,720
Speaker 1: not be able to sell out of it when you're

535
00:26:48,800 --> 00:26:52,080
Speaker 1: when you're ready to. So those are also a couple

536
00:26:52,160 --> 00:26:55,240
Speaker 1: other things that need to be taken into consideration when

537
00:26:55,480 --> 00:27:00,359
Speaker 1: when investing in E s G funds in particular. Well, Lindsay,

538
00:27:00,640 --> 00:27:02,440
Speaker 1: thank you so much for joining us on the show today.

539
00:27:02,480 --> 00:27:05,320
Speaker 1: We really appreciate it, no problem, thank you for having me.

540
00:27:05,680 --> 00:27:08,280
Speaker 1: All Right, Matt, tons of helpful information. I feel like

541
00:27:08,320 --> 00:27:11,760
Speaker 1: in that conversation with Lindsay and sustainable investing, it's just

542
00:27:11,800 --> 00:27:14,720
Speaker 1: like an interesting space in the investing world. So yeah,

543
00:27:14,760 --> 00:27:16,639
Speaker 1: fun to cover that today. All right, that's gonna be

544
00:27:16,640 --> 00:27:19,160
Speaker 1: it for this episode. For people who want show notes

545
00:27:19,440 --> 00:27:21,560
Speaker 1: for this episode, just go to our website at how

546
00:27:21,600 --> 00:27:24,000
Speaker 1: to money dot com, and if you have not yet

547
00:27:24,080 --> 00:27:26,040
Speaker 1: left us a review, we would love it if you did.

548
00:27:26,040 --> 00:27:28,840
Speaker 1: Head to Apple Podcasts and leave us a solid review

549
00:27:28,880 --> 00:27:31,520
Speaker 1: over there, and make sure that you're just subscribed wherever

550
00:27:31,600 --> 00:27:34,159
Speaker 1: it is that you listen to your podcast otherwise, man,

551
00:27:34,200 --> 00:27:36,360
Speaker 1: that's gonna be it. We hope everyone enjoys their weekend

552
00:27:36,400 --> 00:27:40,040
Speaker 1: and buddy until next time. Best Friends Out, Best Friends Out,