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June 12, 2016By Paula Pant

#29: Ask Paula: Should You Invest in Companies You Don’t Believe In?

writing

Today I release the first “Ask Paula” episode. I’m rockin’ the mic solo, answering your questions about index funds, credit card debt and socially responsible investing.

One listener has “crapton” of credit card debt. He’s thinking about hanging onto his debt, though, and using his savings to make a downpayment on a house. Is this smart?

Another listener asks what I think about multi-level marketing companies. Should she try to make money from these?

One listener says she inherited some money and wants to invest, but she’s hesitant to buy index funds. Because index funds hold so many companies, she explains, they’ll inevitably hold some companies whose practices she ethically opposes. What should she do? Should she avoid index funds? Is it okay to profit from companies that you disagree with?

I deep-dive into the answers, offering advice for these three listeners. (And I rant for about two minutes. It’s epic.)

Enjoy!

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#30: "Okay, I'm Financially Independent. Now What?" -- entrepreneur Jim Wang
Next Newer Episode »
#28: How I Woke Up, Removed the Blindfold, and Noticed My Money for the First Time -- with Evelyn Connors
Next Older Episode »

Posted in: Episodes, Personal Finance 101Tagged in: ask paula, credit card debt, downpayments, esg investing, index funds

2 Comments
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  1. Melanie Sorrentino

    # June 13, 2016 at 6:38 pm

    Your description of someone being a hippie and running from everything that seems to be “the problem” was me. After 9 years of veganism I learned that an agricultural diet isn’t sustainable and has an impact on the environment identical to factory farming. When I quit being vegan I bought a tiny house & land in order to build a life in line with my values. We did have electricity. I wasn’t sure my long term plan because the only way to build solar panels (or anything with copper wiring, really) requires mountain top removal. In your analogy of starting at center and always taking a step 1 degree off of course in order to compensate for an obstacle…. to only find yourself light years away for center.

    Fortunately going to those extremes had me do a complete personality/value/lifestyle overhaul. Looking back I think I was completely insane but with good intention. How embarrassing.

    When ever I hear anyone talk about the subject it makes me want to write a book or do a youtube video series on the subject. But then I try to meditate the mental noise away.

    On a different note: I want to compliment you on not pandering or settling for vague response with your guests. And those Jay blooper clips are pure gold.

    Reply ↓
  2. Barb

    # April 12, 2019 at 3:44 pm

    That hippie parody had me laughing out loud! I can’t believe there’s only one comment, all these years later.
    I so related to the caller’s question AND to your fictitious character AND to your rational answer.
    One of my earliest life goals that I set for myself is to leave this universe having given back more than I consumed…lofty thought for a tiny tot! I still aspire to it.
    My first foray into investing was with a company matched IRA in a socially responsible fund (btw, I still work for the same company…an astrological and lunar calendar company)
    THEN I bought a house on 46 acres…and decided to make it a commune (especially catering to environmental activists needing to ground and recharge before their next tree-sit). Folks did come, some just for short stays, some for longer. One even built a cob cottage on the land. At one point, there was so much activity in the main house, I decided to haul a converted school bus in, so my partner and I could have a private space. THEN I built my own cob cottage (off grid, mind you) because living long term in a school bus with two dogs and a cat is not as dreamy as I’m sure it sounds…
    THEN landmate turnover continued, and we started to get nervous about being able to make the land payments without a steady stream of folks paying in, and that desperation led to (you guessed it) low standards in the landmate department. After a steady stream of drama, deadbeats and stressful community meetings (gotta have THOSE every other week, right?) we let attrition empty the land of inhabitants other than my partner and I. It was so quiet and peaceful!
    Right about that time, I learned about air bnb. We spiffed up the vacant bus and cob cottage #1, listed them as rustique eco-retreats, and BINGO! We got bookings! Lots of them! We get to offer inexpensive, eco- lodging with an educational component that covers well more than half of the mortgage, and our guests never stay long enough to engage in drama…they love us!
    In the background, that socially responsible IRA I told you about earlier, just sat there like a lump on a log. I couldn’t figure out why it wasn’t growing beyond the inputs. After stumbling into the FI rabbit hole, I investigated the historical returns and fees of my fund compared to, say a Vanguard index fund, and was AGHAST! I’d never been exposed to the ins and outs of investing, but I’m pretty savvy with math and spreadsheets. I rolled my IRA into Vanguard about 5 months ago, and am feeling like a grown up (I’m 47, call me a late bloomer).
    I’m so grateful to the FI community for educating me in the ways of finance, and especially appreciate podcasts like yours, Paula, because I get to binge on shows while happily flipping my air bnb rentals. Basically, I created my own tiny socially responsible empire! The index fund might support some industries that I’m morally opposed to, but I’m going to use that money to fund my dream retirement, a big part of which includes traveling to participating in environmental activist events with Great Old Broads for Wilderness.
    Win/win/win.
    I gotta stop writing, now, so I can catch up to real-time Afford Anything!

    Reply ↓

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