3 Questions to Ask About the Impact of My Purchases vs. My Investments

Cassandra Laymon, CFP®, MBA

Send your grain across the seas, and in time, profits will flow back to you.  ~Ecclesiastes 11:1

By far, the question I’m asked most often is, “I love of the idea of pulling my investments from companies that oppose my faith values and investing in companies that seek to be a blessing, but what if I’m buying products from those same companies? Do I need to avoid shopping at those same stores?”

That is a terrific question, and it always signals to me that a person is really starting to see the link between their money and their values!  There are some differences between consumer behavior (shopping) and ownership (investing) that I’d like to explore with you.

Where you spend your dollars and where you invest them can both send a message to a company.  As you may recall on August 1, 2012 former Arkansas Governor Mike Huckabee initiated a Chick-fil-A Appreciation Day movement to counter a boycott of Chick-fil-A launched by same-sex marriage activists.  Chick-Fil-A stores reported a 30% increase in sales that day! It’s clear that you can make a difference where you shop, especially if you do it in a coordinated fashion with others who feel the same way.

What I want to highlight here is that the role your money plays is different when you are shopping vs. investing. When you are shopping and buying a product, you have evaluated that product and you believe it’s a good one. There is a direct tie from your money to that specific product.

When you are investing, you become an owner of that company, and thereby you are condoning all of the business practices of that company. You are quite literally praying that the company will do more of what they are already doing so you can make more money.

There are three questions you can ask that will help you determine your responsibility in how you use your money:

1. Am I profiting from this exchange?  When you are purchasing a product or service, you are making a fair exchange of your money for something you value. Many people can purchase that same product, and you will not profit from it or from other products that company sells.

When you invest, however, you do make a profit from the sales of the company. As the company sells more and grows, you also make money. You would not invest in a company hoping that they don’t make money. You want them to do more and more of what they are already doing!

The profits you gain from investing may also come from business practices you don’t agree with. If a company sells baby diapers and lotion, we feel good about it. But that same company may be manufacturing abortifacient drugs, which you likely do not want to profit from.

2. Am I a partner in this exchange?  When you invest in a company, you have partnered with them. You are saying, “Take my money, and do more of what you are already doing so we can share in the profits together.”

In some companies that may mean they are getting more people addicted to cigarettes and alcohol, or funding more abortions. Ask yourself – is that how I want to make money?

3. Am I promoting this company?  When you make a purchase, it probably makes little difference to you if the company continues to make that product. If they stop, you would find a replacement product to purchase.

When you invest, you are condoning all of the products and business practices of that company.  In your heart, you may say you don’t agree with the business, but your actions (where you invest your money) are telling another story.

I don’t want to imply that consumer action is not important. First and foremost, I want you to find out what kind of business practices you are investing in. The truth is that you have most impact when you sever your ownership of companies and business practices that you disagree with.

There may also be companies where you feel you need to avoid their products and stores all together. I encourage you to do that, too. There are certain companies that I avoid because I don’t want them to have a penny of my money!

If you don’t know what business practices you are investing in, click here to get a screening report of your portfolio so you can profit from, partner with, and promote companies you are proud to own!

 

Financial Planning & Investment Advisory services offered through Beacon Wealth Consultants, Inc.