Investing Ethically – The €45K Project Fund Begins
A few weeks ago I mentioned that I would try to recover my money by investing in myself first, increasing my savings and investing the extra money into a world index tracker. Doing this would show that I’ve learnt a valuable lesson out of my investing mistake by getting rid of my previous emotional investing behaviour.
The thing is that every time I visit my own blog and read the top heading “Shaping the future through DIY investing” is a reminder that tells me that I haven’t shaped anything at all yet, well, rather than my belly, which is increasing exponentially since I stopped smoking! +6 kg and counting 🙁
I came up with the heading name a little over 6 months ago. To be precise, it was during an inspiring and positive morning, on the way to work after my daily training at the gym and listening to the song “a one million dreams”, which was being played on the radio. I wanted it to be something original, something that would add some meaning to me, something that I wouldn’t get bored of reading it. After all it’s something like writing down your favourite quote or affirmation and stick it on the fridge or like getting your first tattoo done.
The phrase “Shaping the future through DIY investing” was born at that time.
What does investing mean to me?
To me, investing is more than just a tool to reach financial independence. Investing has helped to shape the world we live in today and will help to shape the world that our future generations will live in too. Here, I’m referring to my future kids, and their kids, and the kids of their kids, and so on.
Today, we probably wouldn’t know what some common words like Netflix, Amazon or Tesla mean if investors wouldn’t have deployed some money at the initial business development plan or during difficult business times to overcome an internal crisis or help taking off an idea.
Whatever your hobby is, have you ever wondered how differently you would enjoy your hobbies today, if there wouldn’t have been investors funding the original project at the first place? From fishing to gaming, capital will be required to boost growth.
The more I learn about the world of finances and investing, the more I realise that having money is, in fact, a huge responsibility. The bigger your wallet is,
I’ve also noticed something else. Most successful and wealthy people – millionaires or billionaires – have one thing in common; they believe that giving money away made them richer and wealthier, and it’s considered as a rule of thumb for anyone wanting to improve their relationship with money, which in theory should ease our path to riches and FF, right? But not many seems to be doing…
I don’t know about you, but this does make a lot of sense to me, and as a consequence I have firmly taken the decision that the bigger my pot becomes the more responsible I will become with my money, because this is what I am being internally asked for, and that’s is what I want to go for.
Putting it all down in a sentence
As I’ve already mentioned in
Sounds like a winning strategy, doesn’t it?
Hence, the one million journey turns ethical, sustainable and greener, or also known as socially responsible investing.
Will I be able to “get my money back” by following these rules? Or am I just daydreaming in a non-sensible way? Can I help myself and the planet at the same time, and still be able to recover from my loss?
I have a shiny bald head, but it doesn’t work as a
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Right, without further ado…..
The €45K project fund begins
Hey Tony pepperoni! So, what’s this fund all going to be about?
This fund will work as a separate investment portfolio, to be precise it will be a sub-portfolio of my top-level portfolio, where I will be only investing in green or sustainable projects via P2P platforms that support this investing style. I may change this method in the future by adding an ethical investing fund, it will all depend on my future circumstances.
There are several P2P lending companies offering ethical investments, like Abundance, whose investments contribute to a greener economy in the UK. Agrikaab, whose investments in farming projects in East Africa boosts their local agriculture and create jobs, or Trine, whose investments are solar related.
The returns on these platforms are generally lower, the funding times are long, the risks are higher and the terms or time your money is locked longer.
I am completely conscious of the risks involved, and for not being the best investment for my pocket. On the other side, I am also completely conscious that this is the best investment to prevent my grandchildren from watching the landscape shown on the image down below.
Image taken from Wikipedia: Marine Pollution
My green investments so far
For the time being I am only going to invest in Abundance.
The main reason for this is because it’s an IFISA compatible (no tax on interests) British company and the minimum investment is £5, so I can easily top up my investments monthly. This is important as there may be months where I will be able to invest £50 only (out of stop smoking).
Abundance offers investments through tradeable Debentures, which are a regulated investment similar to bonds. It is a bit safer than investing in Africa for instance.
It has also some track record, as it was launched in 2012 and it’s also regulated by the FCA.
My sustainable investment – CoGen
There has been only one new project available since January, whose funding was closed in May and I contributed a stake of £244.
CoGen Limited is a leading developer of waste gasification projects in the UK that was trying to raise at least £3m and up to £7m to help advance the development of waste gasification projects in the UK that will reduce waste and generate sustainable energy.
The investment case is fully detailed in a 68 pages pdf document.
CoGen wants that waste as fuel for their gasification facilities to produce useful electricity, displacing the need for virgin fossil fuel generation and preventing much higher carbon emissions that come from landfill or incineration.
I love it for now, I let you know whether I will still love it after 4 years.
My next socially responsible investment – Pax Apartments
Pax apartments plc is after raising a little over £3m to refinance and complete the refurbishment of an affordable living development in Liverpool city centre of 33 flats that will be used as social housing.
The returns are less attractive than the CoGen project but the investment horizon is also much shorter.
There’s a 56 pages pdf document that I still got to read, but it’s quite likely I will grow the project fund from here next.
Finally, what’s your view on investing ethically?
Do you invest ethically? If so, what investment vehicles do you use?
If there any other P2P lending companies promoting ethical investing out there that I should be aware of? Which ones?
I would love to hear your thoughts in the comments down below 🙂
This post includes no affiliate or referral links. Its main purpose is to spread the word and motivate others to invest ethically. This post also intents to put my money where my mouth is.