We don’t often talk about money. And if we do, it’s behind closed doors – with our partner or with family. Perhaps this is out of fear, we aren’t knowledgeable enough or we might be perceived as poor. Or even worse, a show-off. This is different in the U.S., people talk about their pay rise or stock investment as if they were talking about yesterday’s soccer match or who received the final rose on The Bachelor.
Today, we would like to give you 7 very good reasons why it is important to talk about investing. Especially impact investing!
1. Inflation and penalty interest: save your friends’ savings!
In a few years time, our friends, who don’t like to deal with financial topics, will be grateful they have more money in their pockets. Let’s not fool ourselves: the days of earning decent interest on the money in our savings accounts are unfortunately over. And most probably won’t come back anytime soon. More and more banks are even collecting negative interest on the money you keep in your savings account.
In addition, inflation continues to rise. More than 4% in Germany alone. This means that if your friends leave EUR 10,000 in their bank account for a year, they will be left with around EUR 400 less purchasing power the following year. A broadly diversified, long-term investment, on the other hand, has yielded an average return of around 6% per year in the past.
Of course, no one can accurately predict the performance of a portfolio. There will be years when the value of your investment will go up, and there will be years when it’ll go down. But if you trust long-term figures, you can decide: would you rather turn EUR 10,000 into EUR 9,600 – or EUR 10,600?
2. Our money always works: either for the bad – or the good!
Lots of our friends think that their money is safe in their bank account. But in a bank account, it is anything but idle. Even though you can’t see what the bank is doing, the bank is allowed to invest your money and pocket the returns for itself. For example, the bank can invest your money into companies that make weapons of war or environmentally harmful products.
If, on the other hand, we invest our money consciously and sustainably, the reins are back in our hands. With Inyova, you decide whether your money makes the world a little worse or a little better. Weapons or veggie food, coal mining or solar energy – let’s tell our friends: We do have a choice.
3. Finally, a new topic to talk about
It doesn’t always have to be the weather, sports, the latest Netflix series or the ever-changing Covid situation. Let’s talk about a new topic: our finances. After all, they determine how freely we can shape our lives today and in the future.
Of course, you can start with your closest friends and family. You’ll soon realise it’s not difficult. And at the same time, you’ll be surprised how different perspectives can be, and how prior knowledge can impact your discussions – or that you may even be investing in the same companies. Impact investing thrives on communication. And it can be a lot of fun too.
4. You can fight greenwashing
People are always surprised to hear that leading “sustainability” funds contain investments in companies in the mining and oil industries. How is this possible? There are a variety of reasons for this, and Newcrest Mining is just one example. Newcrest Mining is available in some “sustainable” portfolios. This is because it provides equipment to mining companies, but it doesn’t take part in any mining itself. Since the company’s manufacturing processes are very advanced, it has a small carbon footprint. However, what the equipment does and where it goes after it leaves the factory is not considered by most “sustainable” asset managers. Interested in knowing more about this and how Inyova considers these questions? Check out our whitepaper for more information.
Of course, being an impact investor isn’t just about investing in sustainable companies. It’s also about exercising your shareholder rights. This can be through voting on strategic decisions or communicating with company leadership. At Inyova you can give your money a voice at regular shareholder engagement events. You have the opportunity to talk to the leaders of the companies you invest in and question their sustainability strategies.
By talking to your friends about impact investing, you bring attention to greenwashing and can help people make more impactful choices with their money. We make this easy at Inyova.
5. You can help close the gender wealth gap
Statistically speaking, significantly more men invest their money in comparison to women. And since we know that long-term, broadly diversified investments mean more wealth in the long run, this trend further exacerbates financial inequalities. As an example, Mary leaves her EUR 10,000 in her savings account and Mark invests the same amount with Inyova. Historically, Mark’s strategy grew by 6% per year. After 10 years, he has EUR 18,000 in his account, whereas Mary’s assets have shrunk below the initial amount, due to fees and inflation.
You can do something about this: by talking about investing, especially with your female friends, and motivating them to become active in this field, you help close the “gender wealth gap”.
6. Together we can make impact investing mainstream
Sustainability is an issue that moves people. People talk about this important topic in their everyday lives. But what really counts is impact. We can achieve real impact through sustainable investing.
The first step in creating real impact and moving towards a more mainstream movement is to talk about impact and the importance of impact investing. Talking to your friends and family about money and the positive effects it can have in the world can trigger a domino effect. If we talk to our friends, they will talk to theirs – and so on. As a result, we can make a real difference within our community and convince more people to become impact investors. We can move money and mindsets in the right direction …
7. We can start investing with small amounts
Lots of people think you have to be Scrooge McDuck to invest, but this is not the case. If you start early, you can lay the foundations for a financially secure future. The most important thing is to start. The earlier, the better, thanks to compound interest.
At Inyova, you can start with EUR 2,000. Especially as a group or community, it can be a lot of fun to get started – even with small amounts.
The bottom line
We need to talk about money, especially about the good we can do with it. It’s good for our bank balance, our retirement provision and the world we live in. By investing our money with purpose and making impact investing possible for everyone, we can achieve a lot as a community. But it’s up to us. The first step is to start the conversation.
P.S. With Inyova you can invest your money with a positive impact in a very simple and transparent way. To thank you for being pioneers and multipliers of impact investing, you get six months zero fees for every friend who starts investing using your unique referral code. Your friends will also get six months of zero fees!
Advertising notice: The information and evaluations presented here are an advertising announcement which has not been prepared in accordance with legal provisions promoting the independence of financial analyses and is not subject to any prohibition of trading following the dissemination of financial analyses. The acquisition of this investment involves considerable risks and may lead to the complete loss of the invested assets. Inyova receives an all-inclusive fee of 0.9 - 1.2 & p.a. for its services, depending on the amount of assets under management. The exact calculation can be found at www.inyova.de/en/fees.
Risk notice: All information is only intended to support your independent investment decision and does not represent a recommendation by Inyova. The product information and calculation examples presented do not claim to be complete or correct. Only the specifications in the asset management contract incl. the further legal documents, which are made available to customers of Inyova via the complete customer documentation, are authoritative. Please read the asset management contract and the other client documents carefully before making an investment decision. The following applies to all shares and ETFs: Past performance is no guarantee of future performance. Information on past performance does not permit forecasts for the future. Investments in securities include the risk of a loss in value. Other securities services may achieve different results. The results for individually managed portfolios as well as the different time full stops may differ due to market conditions, different entry times, different portfolio sizes, individual restrictions and the respective composition of the portfolio.
Disclaimer: Past performance of financial markets and instruments is never an indicator of future performance. The statements or information contained in this document do not constitute a recommendation, offer, or solicitation to buy or sell any security or financial instrument. Inyova GmbH assumes no liability whatsoever with regard to the reliability and completeness of the information contained in this article. Liability claims regarding damage caused by the use of any information provided, including any kind of information which is incomplete or incorrect, will therefore be rejected. Furthermore, the statements contained in this document reflect an assessment at the time of publication and are subject to change. References and links to third party websites are outside the responsibility of Inyova GmbH. Any responsibility for such websites is declined.
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