Lately, the daily financial news is enough to give any investor the blues. Some folks think that because I am a financial advisor, and I am tuned into the market constantly, that its all just news. Nothing could be further from the truth.
Bernie Madoff’s Ponzi scheme, Merrill Lynch’s Thain and his $35,000 commode, the $50 million Citigroup plane, the subprime mortgage meltdown, and the government bailout are examples of an industry that has lost sight of its fundamental purpose. Consequently, the entire investment industry is headed for more regulation. For those of us who haven’t broken the law, we’ll have more i’s to dot and t’s to cross thanks to those who conspire to defraud us.
Ethics is an inside job and unfortunately, regulation does not change that.
The financial crisis has been very challenging for me. Billions of dollars of wealth have disappeared overnight, creating hardship on retirees and those anticipating retirement. People have lost and are still in the process of losing their homes and their jobs. It has become my practice to find the good in all things. But how could I possibly find any good in this mess?
I began to look deeper and found a very interesting similarity with those who have perpetrated the financial meltdown…and the way most of us make our everyday financial decisions. The Madoffs’ and subprime mortgage brokers of the world lost sight of values and ethics in their work. They lost sight of anyone other than themselves. They lacked a perspective of the greater good.
In a word, greed was their driving force, at the expense of ethics and integrity.
How it this similar to everyday actions of everyday people? How are we energetically aligned with the perpetrators of the financial crisis?
For most of us, our investing decisions are motivated by one objective: profit. When we choose a stock, bond or mutual fund, we want to know that our investment will do better than other alternatives for our investment dollars. Makes sense…if you think like Bernie Madoff.
Knowing most of my investment clients as well as I do, I don’t suspect that any would knowingly invest in companies that use slaves or child labor sweat shops to create high returns. But on the holistic continuum of investment opportunities, where are you willing to put your money?
Where is your ‘balance point’ between what is good for Earth, those with whom you share Earth, and your desire for returns that will bring financial freedom to you and those that you love? Are you willing to achieve financial freedom while in support of, or at the expense of, those living things with which you share this planet?
What we must consider, as those of us who are engaged in socially responsible investing are well aware, is the ethical consequences of our investments. For example, a company’s position on green initiatives, how a company treats its rank and file employees, reasonable executive compensation, diversity of board members, and the environmental effects of its manufacturing processes, just to name a few factors that may influence our decision as to who gets to use our investment money.
Too often, when we make an investment decision, we turn a blind eye to the practices, ethics and policies of a company and focus solely on their financial bottom line, which directly affects our financial return on our financial investment. If the means by which they arrive at a healthy bottom line can be shielded from our vision, and it s not in our backyard, we don’t consider the means to the end.
So…aside from practicing it on a smaller scale, how it this different than Bernie Madoff’s scheme? How is this different than subprime mortgage lenders? How is this different than John Thain, the ex- CEO of Merrill Lynch who spent $1.2 million renovating his office? In all these cases, there was one focus: what is in it for me in terms of money? Personal profit and self-gratification to the exclusion of everything else.
Albert Einstein, in 1954, said (paraphrased): "A human being is part of the whole universe. (But) We experience ourselves as something separate from the rest. A kind of optical delusion of consciousness. This delusion is a kind of prison for us, restricting us to our personal desires. Our task must be to free ourselves by widening our circle of compassion to embrace all living creatures and the whole of nature. The true value of a human being is determined by the measure and the sense in which they have obtained liberation from the self. We shall require a substantially new manner of thinking if humanity is to survive."
When we invest solely on financial results, we are experiencing ourselves as “separate.” Like Bernie madoff, we too are turning a blind eye to so many other things that truly matter. Things like sustainability, work place equity, and transparent governance, things that impact our greater world deeply every day. More importantly these practices are molding the world we are leaving the generations that follow.
So where is the “good” in the financial crisis? The “good” is the loud and undeniable wake up call. Its effect is universal, and no one is immune from its reach. If we use this crisis to answer Einstein’s call to consciousness, and recognize how our actions affect “all living creatures”, and integrate that truth in our every day decisions relative to money, it will truly be the most revolutionary and positive change of our time.
If instead we choose to point fingers, to see the crisis as something someone else has done, that has nothing to do with us, and our behaviors do not change, then we will miss out on the gift of this crisis.
Will we begin to add personal values and ethics to the criteria for decision making relative to how we earn, spend and invest our money? A new world awaits. We need only choose it.
May prosperity be yours,
Mackey McNeill, CPA/PFS IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com
Showing posts with label Socially Responsible Investing. Show all posts
Showing posts with label Socially Responsible Investing. Show all posts
Monday, February 2, 2009
Tuesday, January 27, 2009
$35,000 commode!
John Thain, former Chief Executive of Merrill Lynch, has agreed to repay the $1.2 million for his office renovations, including his $35,000 commode and $87,000 area rug!
A more serious breach of shareholder fiduciary responsibility revolves around the payment of discretionary bonuses to key executives as Merrill posted a larger than expected fourth quarter 2008 loss…. and of course, just before asking for US taxpayer bailout money!
Click here for the New York Times story
I read this stuff and I get just plain angry. How is an investor suppose to gain confidence in the financial markets, when this kind of abuse and disregard for the responsibility of a CEO to uphold the shareholders interest are so common in today’s society?
As an independent advisor, I have a fiduciary duty to my clients which means, their interests come before my own. I take this duty very seriously. In addition, I know my clients, and for me that means, “it is just business” does not compute. It is always personal.
When corporate scandals present the possibility of jeopardizing my clients’ financial futures, I have to question, am I doing enough? Am I doing the right thing?
How did society develop to this place? Where are we going from here? How soon can we get there?
There is a long standing movement to values based decision making in business. In the investment world it is called Socially Responsible Investing (SRI). (learn more at www.SocialInvest.org)
Simply put, SRI means, that in addition rigorous financial analysis, consideration is given to corporate policies and governance issues. In other words, how a company impacts the environment, how it treats its employees, excessive CEO compensation, and the like are considered in addition to the financials before making a decision to own a stock or bond of a particular company.
When I first learned of this idea, I thought it was a bit out there. After all, isn’t business just business?
Not at all. If you want to know what is happening, follow the money. If you want to make an impact, change your behavior with your money. It is a really simple and powerful idea.
Now that I have been a part of the SRI community for years, and continue to see the damage done to individual investors in cases like Merrill Lynch, Enron and World Com, I have come full circle. How can we NOT consider the corporate policies and governance issues before investing? Why would we turn a blind eye to values in the name of greater profit? Why have we let money run our lives for so long, without proper conscious?
In this time the world is calling out for change. Paying attention to how you receive, spend and invest your money is one of the most important areas in your life that needs changing. Step up. Step in time with your values. Give money its due place, equal in line with your values.
May prosperity be yours,
Mackey McNeill, CPA/PFS IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com
A more serious breach of shareholder fiduciary responsibility revolves around the payment of discretionary bonuses to key executives as Merrill posted a larger than expected fourth quarter 2008 loss…. and of course, just before asking for US taxpayer bailout money!
Click here for the New York Times story
I read this stuff and I get just plain angry. How is an investor suppose to gain confidence in the financial markets, when this kind of abuse and disregard for the responsibility of a CEO to uphold the shareholders interest are so common in today’s society?
As an independent advisor, I have a fiduciary duty to my clients which means, their interests come before my own. I take this duty very seriously. In addition, I know my clients, and for me that means, “it is just business” does not compute. It is always personal.
When corporate scandals present the possibility of jeopardizing my clients’ financial futures, I have to question, am I doing enough? Am I doing the right thing?
How did society develop to this place? Where are we going from here? How soon can we get there?
There is a long standing movement to values based decision making in business. In the investment world it is called Socially Responsible Investing (SRI). (learn more at www.SocialInvest.org)
Simply put, SRI means, that in addition rigorous financial analysis, consideration is given to corporate policies and governance issues. In other words, how a company impacts the environment, how it treats its employees, excessive CEO compensation, and the like are considered in addition to the financials before making a decision to own a stock or bond of a particular company.
When I first learned of this idea, I thought it was a bit out there. After all, isn’t business just business?
Not at all. If you want to know what is happening, follow the money. If you want to make an impact, change your behavior with your money. It is a really simple and powerful idea.
Now that I have been a part of the SRI community for years, and continue to see the damage done to individual investors in cases like Merrill Lynch, Enron and World Com, I have come full circle. How can we NOT consider the corporate policies and governance issues before investing? Why would we turn a blind eye to values in the name of greater profit? Why have we let money run our lives for so long, without proper conscious?
In this time the world is calling out for change. Paying attention to how you receive, spend and invest your money is one of the most important areas in your life that needs changing. Step up. Step in time with your values. Give money its due place, equal in line with your values.
May prosperity be yours,
Mackey McNeill, CPA/PFS IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com
Thursday, January 15, 2009
2008 Predictions .. in retrospect
Business Week published its top 10 Worst Predictions of 2008 last week.
Sadly, a large portion of the population uses these questionable predictions to make financial and investment decisions. There is a better way. First, we have to give up our goal of timing the market and knowing specifically what the future holds. The future has not yet been created. Our future is created from the choices we make today and it is tied to the collective. We are all making choices and our individual choices for how we spend, invest, and make money impacts the big picture. All those small choices add up to the world economy.
Often I hear people condemning “big business.” It is those “big businesses” that lie, cheat and steal, and make a mess of the economy for the rest of us. Of course there is an equal camp that shouts it is “big government” that is the problem. Were it not for “big government” our economy would work and everything would be rosy.Well the last time I looked, both “big business” and “big government” were run by people.
You may not think of them as people like you and me, but I can guarantee, that they get up in the morning and put their pants on one leg at a time like everyone else. They have families, fears, worries and joy, just like you and me. And their decisions are all part of the collective as well.
Without a blue print of the future, who can you create a prosperous future?
Follow my top 3 tips for the New Year and use my five never forget rules.
Here they are:
A. Stop trying to predict the future.
B. Accept, learn and use my five never forget rules of money:
http://www.businessweek.com/magazine/content/09_02/b4115015697841.htm
As I read the list, many thoughts and emotions arose: sadness, horror, confusion, betrayal, stupidity, just to name a few.
Predicting the future is always a shot in the dark. Good people, with good intentions, attempt to give us a peek into the future. Some will be correct and some will not. We will only know in retrospect who was correct.Sadly, a large portion of the population uses these questionable predictions to make financial and investment decisions. There is a better way. First, we have to give up our goal of timing the market and knowing specifically what the future holds. The future has not yet been created. Our future is created from the choices we make today and it is tied to the collective. We are all making choices and our individual choices for how we spend, invest, and make money impacts the big picture. All those small choices add up to the world economy.
Often I hear people condemning “big business.” It is those “big businesses” that lie, cheat and steal, and make a mess of the economy for the rest of us. Of course there is an equal camp that shouts it is “big government” that is the problem. Were it not for “big government” our economy would work and everything would be rosy.Well the last time I looked, both “big business” and “big government” were run by people.
You may not think of them as people like you and me, but I can guarantee, that they get up in the morning and put their pants on one leg at a time like everyone else. They have families, fears, worries and joy, just like you and me. And their decisions are all part of the collective as well.
Without a blue print of the future, who can you create a prosperous future?
Follow my top 3 tips for the New Year and use my five never forget rules.
Here they are:
A. Stop trying to predict the future.
B. Accept, learn and use my five never forget rules of money:
- Cash is Queen/ King – Always have a backup plan that includes cash reserves. Always live within your current cash flow. If you are retired, make sure you have enough cash and bonds to sustain your lifestyle for at least 3 or better, 5 years.
- Use debt wisely. Just because you can get the credit, doesn’t mean it is in your best interest to use it. You have to earn a minimum of $1.30 to pay off $1.00 in debt. This makes debt, easy come, not so easy go.
- Investment markets are volatile. Great investors develop an asset allocation plan, diversify among asset classes, and stay the course in good times and bad.
- Investing is a long term game. Forget about picking a home run. You may get lucky, but more likely you will be broke. Long term is 10 to 15 years. Look ahead and stay out of the news drama of the day.
- Don’t follow the herd. Sheep make lousy investors. If you follow the herd you will sell low and buy high. Making money requires that you buy low and sell high, avoiding the stampede of the herd. (You can get killed out there!)
C. Create your own personal Prosperity Plan™ today. Do not wait. Do not tally. Your future is created by the choices you make today.
What choices are you making? Are these choices moving you toward what you really desire?
The Prosperity Planning™ process gives you these answers and more.
May prosperity be yours,
Mackey McNeill, CPA/PFS IAR
President and CEO
Mackey Advisors
859-331-7755
Tuesday, October 28, 2008
Today’s Realities are from Yesterday’s Visions
George Gay opened this morning’s SRI conference session. He spoke of vision and goals.
The goal of Socially Responsible Investing (SRI) is a healthy, socially just, environmentally sustainable society. I have rarely seen fewer words with such depth and power.
Each time I attend this conference I come away with a head full of new ideas and a heart filled with stories of profound societal changes made by inventive and creative social entrepreneurs. This is the place where the idea of choosing between doing good and making money is seen as foreign. In the SRI world there is no choice. The possibility and the reality is to do good AND make money.
No longer a new paradigm, but certainly one that has plenty of room to grow. Based on the last SRI trends report, http://www.socialinvest.org/resources/research/ About 1 in 9 dollars invested in the US uses one of the three tools of SRI.
Those three tools are:
The goal of Socially Responsible Investing (SRI) is a healthy, socially just, environmentally sustainable society. I have rarely seen fewer words with such depth and power.
Each time I attend this conference I come away with a head full of new ideas and a heart filled with stories of profound societal changes made by inventive and creative social entrepreneurs. This is the place where the idea of choosing between doing good and making money is seen as foreign. In the SRI world there is no choice. The possibility and the reality is to do good AND make money.
No longer a new paradigm, but certainly one that has plenty of room to grow. Based on the last SRI trends report, http://www.socialinvest.org/resources/research/ About 1 in 9 dollars invested in the US uses one of the three tools of SRI.
Those three tools are:
- Screening – excluding or including assets based on social screens such as environmental, social justice or values.
- Shareholder Advocacy – speaking directly to companies where change is desired and/or filing shareholder resolutions requesting change.
- Community Investing – directing capital to underserved populations in the US and globally for the purpose of providing opportunity where none currently exists
Learn more about SRI at www.socialinvest.org
If you want to go quickly, go alone.
If you want to go far, go together
African Proverb
May prosperity be yours,
Mackey McNeill, CPA/PFS, IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com
Monday, October 27, 2008
SRI in the Rockies Day One
Yesterday was the kick off to the annual SRI (Socially Responsible Investing) in the Rockies Conference. This is the largest gathering of its kind, bringing together financial planners, investment advisors, mutual fund managers, separate account managers and others involved in the goal of permanently marrying the broader social good with profitability and financial return.
This year’s conference is in Whistler Canada, a break taking town in the Cascade Mountains and future home to the 2010 winter Olympics. The town itself is a leader in the sustainability movement. Sustainability has been expressed as meeting the resource needs of the present without compromising the ability of future generations to meet their own needs. Another way of looking at sustainability is to consume resources no faster than the earth can reprocess them.
Find out more about Whistler sustainability movement at:
http://www.whistler.ca/content/blogsection/4/226/
Learn more about SRI in the Rockies at:
http://www.sriintherockies.com/
Over the next few days I will be sharing summaries of the sessions. Stay tuned!
May prosperity be yours,
Mackey McNeill, CPA/PFS, IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com
This year’s conference is in Whistler Canada, a break taking town in the Cascade Mountains and future home to the 2010 winter Olympics. The town itself is a leader in the sustainability movement. Sustainability has been expressed as meeting the resource needs of the present without compromising the ability of future generations to meet their own needs. Another way of looking at sustainability is to consume resources no faster than the earth can reprocess them.
Find out more about Whistler sustainability movement at:
http://www.whistler.ca/content/blogsection/4/226/
Learn more about SRI in the Rockies at:
http://www.sriintherockies.com/
Over the next few days I will be sharing summaries of the sessions. Stay tuned!
May prosperity be yours,
Mackey McNeill, CPA/PFS, IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com
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