3 ways to make sure you’re not retiring like a 90s film villain

Since I am not male, not wealthy, don’t use hair gel, don’t have a brick-sized cellphone, and don’t make a habit of using my deep insatiable greed to taunt spunky children, I never thought of myself as an investor.

Because when I hear the word “investor” in 2019, the first image that comes to mind is still a rich white guy with slicked-back hair and wraparound sunglasses and an office in a glass skyscraper, someone whose money grants him the power to control entire livelihoods like a chessboard: to either save the beloved community center or tear it down to build a shopping mall. I can’t tell you how many times this composite villain popped up on my family’s television and VCR from 1989 til 1996.

But it turns out I am one because, despite the best efforts of the Great Recession, I do have a 401k.

The closer you get to impact investing, the further away you get from investing in the apocalypse

So, what am I going to do with my wee sliver of power? I want to retire someday, but preferably not into a rotting hellscape where The Handmaid’s Tale is a comedy.

It wasn’t until I began working in the impact investing field that I began thinking about what, exactly, my 401k was invested in. For those of us who are not (and may never be) rich enough to benevolently allocate our billions, we still have the opportunity to put whatever wealth we do have into a more just future. Here’s what that spectrum looks like:

Step #1: Not investing in bad things. First is the investing equivalent of checking your food for broken glass: not putting your 401K in puppy mills, oil pipelines, and anything headquartered in a country run by a horrible dictator. These ESG screens are becoming increasingly common. Though not a proactive investment in social or environmental good, putting less money towards the obviously bad is necessary.

Step #2: Investing in good things. Next is figuring out those social and environmental things you’d like to proactively invest in: fair wages, environmentally sustainable manufacturing practices, the number of women on the board. Organizations like JUST Capital and The B Team offer lists of companies modeling better ways of addressing a whole host of issues. This is a great thing to do, though it’s also technically not “impact investing.”

Stop #3: Investing in things that are a very specific and measurable kind of good. Now we’re at impact investing. Contrary to popular belief, “impact” is not just “avoiding bad things” or “doing something good.” You’re not only investing your money in something good — you are measuring exactly how much good your investment is doing.

Let’s take a hypothetical eco-friendly product manufacturer. It’s not polluting anything (step one). It’s using sustainable materials and manufacturing processes (step two). But investing some of my 401k in that company is not an impact investment unless the measurement of said impact is part of the equation. Ideally, my rate of return is linked to exactly how many tons of carbon this company keeps out of the atmosphere, or another relevant metric.

This is a tricky step — and not an option yet for every portfolio — because impact investing is still a nascent field relative to old-fashioned risk-return capitalism. But it is growing, and it’s possible to imagine a world where Step #2 is the norm and Step #3 is where all the action is.

A final reminder (that you might not need if you watch The Good Place)

Of course, at any of these steps we could run into the thorny philosophical question of doing good (measurable or not) in one area and something crappy in another. A cancer-curing biotech company might not be hiring or promoting any women or people of color. That eco-friendly manufacturer might have a not-great history of paying its workers a living wage. A woman in a highly patriarchal society who owns her own plastic straw manufacturing plant is a force of good to some and a force of dead sea turtles to others. And if we ever came up with a scale to weigh these competing pros and cons, we’d probably end up in another philosophical knot over what “good” really means. There are several episodes of The Good Place that are literally about this question.

But we have to start somewhere. Think about your values, do some Googling, and take those steps. Don’t be the guy with the brick-sized cellphone shouting at a child.