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rF LiveBroadcast - Crowdfunding, Microloans & Investing that makes a difference - YouTube
Channel: rebel Financial
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(upbeat rock music)
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- Hey it's Phil Ratcliff
and thanks for tuning
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in again today.
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Today we're gonna talk about something
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that is near and dear to our heart,
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and that is ESG or environmental,
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socially responsible, and
good corporate governance
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and microloans, really trying to use
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the resources that we have to
make the world a better place.
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And I think now as any
time throughout history,
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it's really important for us to do this.
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I think many of you would probably agree
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with us that greed and self-service
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and individualism has just gone so far
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that it makes a lot of us cynical.
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And that really hits into
why is this important?
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Why is it important for us to care,
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isn't somebody else going to do that,
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or can't we legislate it,
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or could we even make a difference?
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Kind of that old cynical
view of why even vote
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it's not gonna make a difference.
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And if everybody thinks that
way then absolutely, it won't.
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But when we really get down to it,
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we work hard and I think
those people that watch this
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or interact with us, a financial company,
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we save our money.
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And it is kind of self-serving,
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we want to retire and we want to take care
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of our families and what so.
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But that doesn't mean
that we can't be good
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citizens in our communities
and our countries
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just as humans in the world
to do right by each other
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even though we definitely
want to take care
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of the ones that we love as well.
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And even kind of beyond that
on the financial side of things
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even though I don't think a lot of people
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think about this except
for maybe regulators
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and politicians and what so,
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is our entire financial
system is built on trust.
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If you don't trust to do
business with someone,
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if you don't trust that
if you invest in someone
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that they're not going to rob you
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or that you will have more in the future
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than just putting it in
a safe in your backroom.
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I just had a gentleman come in this week
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that was upset that he lost money
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over the last 18 months,
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which it's very hard for me to fathom
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how that can happen, but why shouldn't he
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just put his money in the
ground and not trust anybody?
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And if we do that we won't grow,
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we won't progress.
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We can't continue to get better
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and so this is a fundamental problem
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and I think a lot of people are looking
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at a lot of the executives in almost every
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publicly traded company
in the United States
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and saying they're robbing the system,
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nobody deserves to be paid that much.
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There are plenty of people who are MBAs
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in business schools, great
ones around the world
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that didn't have the connections
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to get in those positions
that would do the work
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for a fraction of the
cost and in many cases
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probably do a better job.
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So it's absolutely ludicrous
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and it erodes the trust that we have
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in each other in that system,
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and so beyond just what we
started out talking about,
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doing the right thing,
people think just investing
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per your values and you
give up greater, no.
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This is important for our
entire financial system
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and all of us that have
retirement accounts
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and investment accounts and 401Ks,
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we own these companies and
we can, if we wanted to,
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make them do what we want.
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And the government works for us,
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we can make them do what
we want as well too.
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So anyways, let's get into it,
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let's dig down into our kind
of bread and butter of it,
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is how we help our clients with the ESG,
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again environmental social
and good corporate governance.
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And to kind of break it down,
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let's look at each one of those.
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When we talk about environmental,
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what are we talking about?
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Well it could be from the
missions or recycling,
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energy efficiency, reporting,
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and even when people get in
trouble doing bad things.
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And why does it matter?
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It matters because to have a good future
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in which the costs of what we're doing
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that we may not be paying right now
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could be significant.
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And companies that are
looking at those liabilities
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trying to minimize them, first of all
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could very much be more profitable
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in the future for having done that
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even though there might be some costs
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associated a little bit up front
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even when you look at putting some awesome
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energy efficient geothermal
heating system in your house.
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Yeah, it may cost a lot of money
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but within 10 years you're
going to get your money back
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and if you live there
for 20, that's awesome.
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So again, these things aren't
just about doing something
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that just costs extra money for no reason
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except for something touchy feely.
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A lot of times this is going to create
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the sustainable world where we can have
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the emerging economies go up
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and have an awesome
middle class like we had
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that made America great
back in the 50s or 60s
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and that's gonna be good for all of us.
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And it needs to be sustainable
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and we need to have
companies and governments
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that are going to be leaders in doing that
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and by being invested
in that we can push them
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to do that.
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And if we as a society are
going to hold bad actors
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accountable, then the good actors
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are going to be more profitable.
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So that's important.
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The second things, when we look at a lot
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of the social things and we
look at workplace diversity
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and employee relations
and health and safety
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and even human rights,
I mean there's still
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slavery in the world,
and there's companies
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that either participate
or turn a blind eye
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or allow criminal elements to do things
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are not taking care of their employees,
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pay their executive staff ludicrously,
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even in non-profits.
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non-profits are horrible at this.
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When you look at a lot of
the hospitals and what so
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and how much they pay their patient care
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associates and nurses
compared to the upper,
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well what they would consider upper staff.
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And these people are really the people
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that I think statistically
make the biggest
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difference in people's
lives and it's not right.
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And then second, product wise.
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The integrity of the service of a product
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that these companies put out
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and how they market and advertise that.
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If they're lying about that then yeah,
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maybe they'll have a
better quarter or year
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or something like Wells Fargo did
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with their bad sales practices,
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and now nobody wants
to take responsibility
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that this was an internal
systematic problem.
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And this is happening
through lots of companies.
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And if you're with me, just
don't do business with them.
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And that is why these companies
would be more profitable
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that do the right things.
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And then product health and safety
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and consumer complaints.
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All of these things are very important.
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We even look at the
better business bureau,
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and while I love the concept
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and I think a lot of the people
who work for them are great,
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it's a joke, nothing happens.
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If you've ever complained to
the Better Business Bureau,
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these companies donate a lot.
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This is where the Better Business Bureau
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makes it's money.
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Donate a lot of money to them
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and it gets swept under the rug.
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So there's no accountability and even now
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the government's taken down
the Consumer Protection Bureau
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which is mainly good for
just about every American
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unless you're way way way on the top.
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So again, we own these companies,
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we can hold them accountable.
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And if we do over time, they're
going to be more profitable.
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And even when you look at the one,
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three, five and year rate of return
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for our ESG investments
has actually been better.
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And the cost has actually gone down
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because almost 1/5th
of all investments now
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are ESG, which is great, it's not niche.
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The cost will come down, it
doesn't cost much to do this,
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and the rate of returns
will probably be higher.
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So now let's look at governance.
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So when you look at governance,
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look at, one thing that just about
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every person can agree on is
we love our communities, right?
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Why do you live there?
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Don't you want the place where you live
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and you're gonna raise kids and et cetera
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gonna be better in the future than now
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and that you're a part of that?
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So community relations,
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what companies are doing philanthropically
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and what they do in terms of leading
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in the community in
terms of what they give
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or programs and letting
employees take time
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to give back to the places
that have made them successful.
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Get more into a little
bit of our side of things,
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shareholder rights, we've already
talked about a little bit,
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executive compensation,
corruption, bribery.
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All of these things I think we think,
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first of all right and
wrong, almost everybody
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can agree on that, but to a certain extent
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unless somebody breaks the law,
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we're not holding people accountable.
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We don't have to put people in jail,
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but we can absolutely
hold people accountable
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to say that you don't work here any more
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or you're not going to be in this industry
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or work for this publicly traded company
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that we see as with our
retirement accounts, own them.
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So really let's do a little
bit of screen share here.
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I've done this for like 10 years since
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Rebel Financial has started,
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we've been about helping
people invest for their values.
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If you go to the about us section,
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go to why choose us,
you can scroll down to
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where we talk about our
investment philosophy,
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our socially responsible
investing program.
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We also have other values based models,
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Christian values, Sharia law, Halal.
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So we try to make it to
where it's very good.
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And you can click on each one of those
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and they have more explanations.
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It's a little wordy rather than pictures
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but that's where we are here.
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And it talks about some of
our biggest partners here.
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One of the non-profits you can check out
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and I think Tony's
gonna post it down below
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so you guys can see it.
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I like this forum for sustainable
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and responsible investment.
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It really goes through what ESG is
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from someone that is a non-profit,
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not like us or a couple
of the phone companies
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I'm gonna name a little bit later,
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but really out there to try to influence
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what people know, helping
investment advisors
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and managers do a better job
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influencing public policy, et cetera.
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It's pretty good.
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And then one of our biggest partners for,
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it used to be called socially
responsible investing
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or SRI, but now it's kind of expanded
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out to be ESG, is Calvert,
Calvert Investments.
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And so if you want to
learn more or what so,
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they've got a great website
and more money than we do
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to put information out there
and make pretty things.
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But I really like where
they just go through
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their pillars of how they do things
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and really just talk about
you don't want to sacrifice
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people being able to protect
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and grow their livelihoods
and their retirement.
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And so performance and
a lot of these things
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that we're talking about here,
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we don't think that you're
going to have to give up much.
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And it goes through the process of
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we want to make sure that we
still focus on performance
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but we need to research,
engage with companies
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and then even now that it's getting bigger
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and more people are leveraging
the power that we have
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to make an impact, to start businesses,
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or control the ones that exist
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to make them do the right things
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because we own them.
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And so I think it's really
cool you can look through here.
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One of the things also
in the literature section
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of it as well, there's an overview
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that really breaks it down
in terms of how do we look
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at researching things what
information is available,
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how do we rank companies,
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what decisions do they make?
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And then going through
the process of seeing
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how we do things, because when you invest
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kind of passively like
what we're talking about
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with the ESGUs and the ESG funds
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or an investment manager to help you
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pick the funds and rebalance and what so,
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in the past, and still the
majority of funds are like this,
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it's mainly about positive
and negative screening,
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looking for companies that
are doing the right things
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and including them and
then finding bad actors
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even if they used to be good
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or they do something bad
and screening them out.
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And so as things get bigger
and we can pool together,
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we can actually make a difference
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by voting proxies,
getting rid of hopefully
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a lot of the boards around the country
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have an executive turnover,
finding talented people
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that want to do the right
thing for shareholders
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and also all the other stakeholders.
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Our communities, our
employees, our country,
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and humanity and our world in general.
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So check that out, it's pretty cool.
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So the next thing that I'm going
to hit into are microloans.
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And there are lots of different ways
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to participate in microloans.
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One of our favorites is Kiva.
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I really personally want
to do something like this
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for impact, not just to make small loans
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to small business owners
in the United States
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who have tons of options
through SBA, et cetera,
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and in private banks.
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But in emerging economies
where people don't necessarily
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have the opportunity to start a business
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and their only option may
be to work in a sweatshop
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or a textile mill or even worse to starve
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and not even have anything or a job
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whereas if they could raise 1,000 dollars
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and each of us chipped
in 25 dollars to someone,
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they could buy a cow or a
sewing machine or something
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and start a business.
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And the repayment on these loans
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is upward of, better than people
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with 800 credit scores here.
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I think the repayment rate is over 97%.
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And so the average rate of return to you
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might be somewhere between
6 to 8%, which is awesome.
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What do you get from the bank
or credit union right now?
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Obviously this is not FDIC,
so it's not totally the same.
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But for a portion of what
you're doing savings wise
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to help somebody, it's great.
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We personally have a team, so right now
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mainly our employees
but some of our clients
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are joining in and we welcome anybody
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that wanted to join our team.
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But you can basically go down,
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you can join and then you can see people
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that we've helped.
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If you wanted to kind of jump on board
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and you can help them too
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to try and leverage my due diligence
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actually having read everything
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or what so, you could do that.
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And you can also look
at some of the graphs
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and the impact and what so that we make
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as a team together.
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So when we look at, let's say,
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well the first one that comes up is gender
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but we could look at what
countries are we helping.
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Look at all those from Uganda to Samoa
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to Albania to Ghana to
Jordan, it's pretty cool.
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And then you can look at what industries
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or sectors have we mainly invested in.
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Agriculture, clothing,
manufacturing, arts, food.
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So I really like this.
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Kind of the way that it
works is once you're in here
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you can look through people's profiles,
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you can even screen
them however you'd like.
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Say I'd really like to
invest in eco-friendly
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or in someone that is starting a business,
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you could screen by countries.
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And you can look at,
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and you can lend as little as 25 dollars,
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I mean that's generally what I do,
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25 dollars per person
and just spread it out.
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And you can even look for repeat borrowers
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who have just done a good job in the past
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and repaid, so even reducing the risk.
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Sometimes you'll find in
here where other people
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and organizations move
double what you put in
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if you put in for that
person or cause or what so.
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So a wonderful thing of
how we can use our money
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and to continue to grow
it to help other people
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that don't want a handout,
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they just want an opportunity
to do something better.
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So again, why are these things important?
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I mean don't you want to
live in a better world
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in which we can trust each other,
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in which we help each other come up?
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It's not a dog eat dog world,
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there is, especially
as technology increases
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and education around the world,
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there will be a change
hopefully in the next decade
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from scarcity to abundance
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and we don't have to
fight and kill each other
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any more to fight over scarce resources.
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We can live together,
we can do a good job,
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and we should do it responsibly.
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Because a system that is fair
and equitable inspires trust
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and is going to multiply
the growth of that economy
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because we can trust each
other to loan to each other
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to put in startup money,
to be more confident
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that people aren't going to rip us
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or our grandparents off, et cetera.
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So again I hope this helps you.
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At a minimum, if you are investing,
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look into ESG investing
through your investment advisor
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or investment firm, there is
a way to do it responsibly
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to where there's not much more risk,
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or any at all, for a very reasonable cost.
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Our ESG portfolio is
only .05% more expensive
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and that is awesome.
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A decade ago it was like a percent more.
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So you could see how again,
it's not a niche anymore.
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It is mainstream.
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And I really believe that over time
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that you probably will attain
a higher rate of return
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from pursuing strategies
that take these things
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into consideration.
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So we appreciate your time again
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out here in the upper
mid-west and north-east,
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hope you don't get snowed in too bad
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or if you like it go build
some snowmen or a fort
[1097]
or what so, but again join us next week.
[1099]
We are going to have Julie
Mallory in from B2 Solutions
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to talk about some things
that small business
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can do efficiently to leverage technology,
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save money, increase productivity,
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it's gonna be good.
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And then the week after
that we're gonna have
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Craig van Aelst in from
Custom Controls Group.
[1119]
He started an awesome innovative company,
[1123]
HBAC doing heating and cooling,
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customizing systems to help people
[1128]
be more comfortable, but also save money
[1133]
and be more energy efficient over time.
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I think that's gonna be a great episode.
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So you guys be safe, do the right thing,
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and we will see you next week.
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(upbeat rock music)
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