In the spirit of the old saying “think global, act local”, here are some ideas for people starting out on the journey of individual financial divestment. The goal of this post is not to distract from the amazing systems level work our members are doing, but to give new members some tangible personal experience that they can bring with them as they start to collaborate with others at a higher level.
Hopefully this topic can also act as a collaboration space for people who are taking steps on the journey of individual financial divestment to ask questions, share ideas, and give productive feedback.
Some things I’ve been thinking about (apologies in advance that this is US focused, I don’t have much experience outside of the country):
Where does your money sleep at night?
A lot of people don’t think twice about their primary checking or savings account. But banks do a lot more than just hold your money. How they reinvest with your deposit can have a huge impact on how accessible financial instruments are to different stakeholders of our economies. If you’re thinking about switching to a new institution, mutual or community banks are a great place to start. Some things to consider (beyond interest rates and fees) as you start your search:
- What community programs does the bank have in place?
- Take a look at their lending page, what type of organizations / individuals is the site geared towards?
- Does the bank have a sustainability or values page? Have they made substantive claims about how they leverage capital?
Alternatives to Index and Target Funds
Here in my home country of the US, many retirement account providers push novice users towards index funds or target year retirement funds. Some occasionally will offer an ‘ESG fund’ or similar approach, but as you drill down into the companies in the portfolio, they still don’t look great. Assuming you an employee choose to opt in (more below), how can you make sure you are investing responsibly? I like tools like fossil free funds, but would love to hear strategies others have used
Alternative Investment Opportunities
There are often opportunities to invest more directly into local organizations that offer a return and ensure dollars are staying in your local economy. In my metropolitan area of Boston, two organizations come to mind. Walden Local Meat at one point offered fixed rate 6 year bonds to help finance sustainable agriculture investments in New England. The Ujima project ran an offering for an investment round in 2018 to fund economic democracy efforts for BIPOC owned businesses in the area. What opportunities exist in your neck of the woods?