Investing at its most basic is a tangible act of hope that the future will be good. The difficulty in seeing it that way, of course, lies in the different, personal definitions we all have of what “future” and “good” mean.

For some, “future” and “good” mean only having enough money for their lifetime and possibly the lifetimes of their children. That’s understandable - in our culture of scarcity the first thing we’re trained to do when we’re scared (and who wouldn’t be scared right now?) is to huddle with people like ourselves around the resources we worked tremendously hard to gather. Investing for these people sometimes feels like an act of desperation, not of hope.

For you, the meanings of “future” and “good” might cast a wider net: good for entire communities, good for the earth and all its inhabitants, good for future generations. With such broad definitions, you might even have a broader understanding of investing, which could mean the creation of wealth that’s not limited to dollars, but encompasses the wealth of participating in a healthy community with thriving ecosystems and sustainable relationships. To invest this way, and to keep investing this way even when it feels like things are only getting worse, requires that you are deeply connected to your WHY.

Easy, Bad Answers and Harder, Less Bad Answers

More than any other tool in the financial planning kit, investing is the home of easy, one-size-fits-all answers, and it’s not necessarily because there’s a whole industry designed to lull you into buying their products by making them seem perfect for everyone (even though there is).

In part, investing is home to easy answers because the hard answers are...hard.

Your values are personal. They’re complex, and they’re unique. And so are the companies and causes you want to invest in. Matching your values fingerprint with someone else’s is hard work, especially if you haven’t actually examined your own fingerprint that closely.

Off-the-rack solutions, like relying on ETFs and mutual funds with ESG ( environmental, social, and governance criteria screens) branding aren’t all horrible. But just ask my friend and colleague Darryl Brown, CFA, about what you might find when you look closely at the companies you end up owning. He’s got plenty of examples of people wanting to invest in companies that advance social justice, diverse representation, and fair employment standards and finding out they now own Amazon, Google, and Tesla instead.

Bespoke solutions, just like suits, are more expensive, but are typically worth the cost. Working with a professional to articulate what you want (and don’t want) and tailor a portfolio around your unique values is a good way to avoid the easy, bad answers. It’s hard, because you still have to rely on someone else’s understanding of your values, and imperfect, because you will be relying on proxy characteristics (like board representation, or the CEO’s personality) to screen for a good match...and it won’t always work.

This leads to another hard truth: investing with more than just the growth of your own personal net worth in mind is harder to measure, and not because values-based investing generates lower returns (it doesn’t). Rather, it’s because a definition of success that includes the health of the entire planet, for example, requires more than the simple math of financial statements to measure. Not only do you have to examine and articulate your personal values, you have to design your own personal scorecard.

Trying to build a good future using only traditional investing tools is like trying to buy a tomato in The Good Place: there is simultaneously too much and too little information to make a perfect decision about the impact your dollars will have, and no tangible evidence that all that hard work to make the best decision had the impact you wanted anyway. But it’s worth doing anyway.

Hard Answers, and How to Live With Them

Yes, investing your time, labour, and money in creating a good future is hard work, just like most worthwhile pursuits. The sheer amount of work might feel daunting, so here’s how to get from wanting to invest according to your values to actually doing it:

Start With Why

As my friend Bonnie Foley-Wong writes in her book Integrated Investing:

The first thing people ask me when they are thinking about investing is, “What should I invest in?” But the first question they should be asking is, “Why am I investing?”

Articulate the kind of future you want. Discuss it with your family and the people you work with in your community, and be as specific as possible about what you mean by “good”, and what you mean by “future”. Describe the change you want to see in the world: is it a problem you’re participating in? Is it a solution you’re not participating in? (You may find that the Design Thinking framework is a helpful tool to use for this.)

And here’s a potential bonus: involving future generations in your investing decisions and teaching them how to carry on after you may also line up neatly with your values around education and family!

Practice Explaining Yourself

Imagine you’re explaining your values to someone who doesn’t know you from Adam but who will be responsible for executing your vision. You might know what you mean by “I’m against consumerism” but they probably don’t - so tell them: what companies or attitudes do you want to withhold your resources from? What endeavours would you feel comfortable supporting?

If you think a particular CEO is power-hungry and represents everything wrong with the world, would trying to band together with other shareholders to force them out be a good use of your resources? Or would avoiding them and everything they touch be a better use of your time? Be as clear as possible: what is the outcome you want to achieve, and how will you measure it?

Perfect is the Enemy of Good

No matter how bad it seems like things are getting, remember that nothing is inevitable (no, not even Thanos). The top five companies in the seventies are not the top five companies now. Corporate decision-makers who don’t believe a word of their own greenwashing campaigns are scared of the reputational fall-out from not at least appearing to care.

The old paradigms of “investing is only about money” and “corporations only exist to maximize shareholder values” are actually shifting. Not fast, mind you, and it will take hard, sustained work to create long-term, meaningful change...but part of that change is the belief that it can be done. People like you, who engage with their wealth of resources as a source of future good can make it happen, and the first step is simply believing it can be done and acting accordingly.

Planning your retirement is a waste of time and money if you don’t start with your values. Full stop.

Oh, you might put together a strategy that squeezes every last dollar out of Old Age Security or perfectly calculates when to convert your RRSP to a RRIF and even feel good about it for a minute...but unless your only measure of success is how correct you are, you aren’t going to feel great about your retirement strategy for very long.

As I’ve written before:

I have learned that there is no one set of values that fits everyone. Even where people share values, how each of us approaches and lives those values is unique to each one of us. I have also learned that, without connection to our specific set of personal values, our goals fall flat, our achievements feel unimportant, and we lose motivation.

I’ve found over my decades in this profession that prospective clients often show up with “how” questions, like:

• How should I draw down my assets in retirement?

• How should my portfolio be managed?

• How much can I spend?

They’ve been trained (by every bank ad ever) to believe that answering the “how” questions are what retirement planning is all about, and since it’s likely the first and only time they’re going to retire, they’re understandably nervous about getting the details wrong.

The problem with starting with the details of “how” is very similar to the problems you’d encounter if you started to build a house without stopping to design it first. Even if you somehow manage to get the foundation poured properly and the walls and roof attached to each other, starting with design first is the only way you’ll end up with a home worth living in.

Think for a minute about your own financial situation: you may have the exact same income as someone else. Your portfolios may be eerily similar, and you may have retired on the same day and have the same cost of living. Spooky. Your retirement strategy can’t be that different from theirs, can it?

If you’re only comparing your net worth and cash flow statements, you might be tempted to say “no”. But what about your values?

What if you have a passel of kids and grandkids, strong values around education, and a family cottage that you inherited from your parents and want to pass down as seamlessly as possible to the next generation? What if your doppelganger has a second home but no kids and no other close family, suffers from anxiety, and had parents and grandparents who all lived into their very late 90s?

Your retirement strategy might include:

• Facilitated family meetings to help you understand what the next generation wants (you might be surprised!)

• Planned gifts to each child’s RESP.

• Setting your portfolio up for growth since it will definitely outlive you.

• Money set aside in your Will for a trust that will cover annual cottage expenses even after you’re gone.

• Even more facilitated family meetings so that everyone is clear about your intentions and hurt feelings can be addressed with care or avoided altogether.

• Overfunded permanent life insurance policies so that your final tax bill is covered.

Your double’s retirement strategy should look completely different, even if both of you spend the same amount every year and have identical portfolios down to the penny. Their strategy might include:

• A large enough cash wedge to cover two years of spending, and enough money in fixed income to ride out five full years of horrible equity returns.

• Canada Pension Plan benefits deferred all the way to age 70, with strategic RRSP withdrawals in the years before CPP begins.

• An annuity that (along with their CPP benefit) creates enough guaranteed income after age 70 to cover their core lifestyle expenses even if they lost every cent in the market (an unlikely scenario that nevertheless wakes them up at 3AM most mornings).

• A professional trustee named as their substitute decision maker and executor.

Applying your strategies to their life and vice versa might not be disastrous for either of you..but it would almost certainly feel that way!

It’s easy to dismiss feelings as irrelevant to the dollars and cents of financial planning, but paying attention to them is the key to making sure your retirement strategies are congruent with—and ultimately supportive of—your values.

Originally Posted on The Just Word Podcast, July 2021

What matters to you and how you live your life are important things to think about and discuss with your financial advisor. Finding an advisor that encourages you to approach your own financial plan with a more individualistic and personalized structure will help to set you up for success with your investments.

Sandi explains that not everyone uses money as a scorecard for financial success. She encourages individuals to really take a look at what they value in life and how they spend their time to gain what truly matters to them.

“If financial planning is done well, then the result will have the client feeling more organized when risk occurs. Financial planners should be professional and have ethics so that they live up to the spirit of that standard to benefit the people we serve.”

– Sandi Martin

Listen to the full episode on The Just Word Podcast

Well, here we are in the In-Between...again. That space between winter and summer, between hibernation indoors  and having fun outside, between “yay, the vaccines are here” and “now when do I get to visit my Mom?”.

Around here we recognize May as the time between the awful “Stressed & Bummed Out and I Don’t Know Why Season” that seems to last for most of January, February, March, and April, and our favourite “Dream State Goal-Setting Season” (aka the entire summer). It’s the time when the work gets done, and the liminal space between what has been and what’s on the way that we named our company after. 

It’s hard living in this space, particularly now. The pandemic has heightened our awareness of how much time we spend being uncertain. It’s very difficult to make decisions when you have only a vague idea of what might happen, when it might happen, or what the effect might be...but rarely all three at once. Each of us crave a simple formula that not only tells us exactly what to do, but promises us that everything will be fine if only we follow the right steps. 

As attractive as simple answers and surefire formulas for success might be (especially in the middle of the night when our deepest fears come out to play), I know that easy answers do us all a disservice. The hard work of living and making decisions in the middle of uncertainty, of defining your own version of success and moving towards it step by step, changing course as you go, is the only way we know how to live, and the only way I know how to serve my clients. 

I hope that as you move through this particular in-between season, that you see hope on the horizon, even if you have to squint a little.

This month, more than a year into a global pandemic, I’m thinking hard about family: those dear ones we haven’t hugged in far too long, those we will never hug again, and those who have been right next to us 24 hours a day, 7 days a week, for 365 days and counting….and counting...

What Does Family Mean To You?

I don’t care even the tiniest bit about what anyone else thinks “family” means. I only care about what it means to YOU.

Family is, of course, a bit of a loaded topic, and your definition of what family is and what it means to you may have evolved significantly over the years, maybe even on purpose. Your family might include only your partner and kids, full stop. Or it might be a web of relations that includes elders, aunts, cousins, and nephews you’ve never even met (yet). You might have carefully chosen your family as an adult, or your definition of family might include the ancestors who came before you and the generations who will follow you. Your cat might be your family.

If you feel a responsibility to your family, whoever they are and whatever that responsibility means to you, I have excellent news: there are so many financial tools that you can use to care for them!

Common (And Not So Common) Ways To Support Your Family

The way you spend and save your money today is an immediate and probably kind of obvious tool you can use to live out your values. In fact, you’re probably already using cash out of your own pocket to feed and shelter at least one family member, and maybe even setting some aside for someone else’s future education or retirement spending.

Wealth transfer is also a common way to care for family members, perhaps by building up (or maintaining) a portfolio of assets that can be passed along to future generations. Investing in assets that will slow or repair the destruction of our climate is another way you can use your portfolio to live out this particular value.

You may have a business that you’ve created or one that was passed down from another generation. The legacy of that business might be incredibly important to you and your family. Structuring how (or if) this business transitions to the next generation is vital to business families, as are the deep and meaningful discussions, facilitated by a professional before you even start implementing solutions. This can ensure that the meaning that your family has built within the business lives on, even if it looks a little different in each generation.

Many people don’t realize it, but investing in appropriate disability and critical illness insurance is an extremely powerful way to care for family. A few years ago, we discussed this very thing in an episode of Because Money (skip to minute 36 to hear it), and came to the conclusion that neglecting your personal risk management planning is equivalent to informing your family that THEY are your disability insurance! They might be glad to step up...but if caring for them is a value of yours, you might not feel so hot about it.

I’ve said this many times before, but it’s worth repeating: planning for your own eventual departure is truly one of the most loving and thoughtful things you can do for your family.

Family Is Important… to Everyone

Family means some kind of thing to everyone. It might be a big deal, it might be a smaller deal, but it’s a deal of some sort. You demonstrate that value in the design of your own personal and business finances, one way or another.

I recommend that you don’t leave that up to someone else, or on the backburner for another day. Spend the time to review your approach to family, and understand exactly how you want to invest - or not invest - in it, as the case may be.