Money & I

Coming from Gratitude

I can identify four key moments in my life where money played a central role. At those times, I could not yet make sense of how much I was learning about mine and other people’s relationship with money. I also could not have imagined that these experiences would help me reach a stage where writing a dissertation on personal finance, banking and investments would feel natural. In this light, I am grateful for the personal and professional opportunities revisited in the lines below and celebrate that they have helped me open my eyes to the fact that where I bank matters.

Financial Education

I am extremely fortunate to have been taught personal finance by my parents from a young age. My first time ever in a bank was accompanying my father, he had opened a savings account for me, where he would make deposits on two occasions every year: Christmas and my birthday. This money was to be kept safe and used only in emergencies or special occasions, preferably as little as possible. It was ‘money for the future’. For everyday expenses, my father would give my sisters and I a monthly stipend. Each year, according to our age and school year, the stipend would be adjusted, according to the prices of the school canteen, eventual meals out, and our proven responsibility to manage our finances. Looking back, it was much like a career plan, with deserved promotions and inflation correction. Moreover, my parents established a ceiling. From an agreed point onwards, we were expected to earn our own income, by when they would start downsizing the stipend until we transitioned to our financial independence. Until recently, following what I learned from my parents, I kept two bank accounts: the savings account and a current account for short-term expenses. Every month, I would try to save part of my salary and transfer it to my savings account. When a special occasion turned up, I would use my savings and keep the routine going. All in all, the financial education I was lucky to receive was based on responsibility, accountability and fairness. It helped me build and mature my relationship with money as it also prevented me from acquiring debt.

Working with Crowdfunding

For four years I worked in a crowdfunding start-up and, as a great enthusiast of this fundraising dynamic, I have always been confident that as soon as people saw its value and felt as excited as I do, it would become mainstream. During those years, I was incredibly happy to see the platform growing in figures and awareness: the amount of money raised, projects published, number of supporters, success rate, media coverage and a significant diversity of partnerships — with corporations, academia and the government. But alongside, I also lived the struggles around changing people’s behaviour — which can get considerably harder when it involves dealing with money.

Whenever I saw a project that really excited me, I would share it with my family and friends, encouraging them to make a contribution. However, I would often hear in return “I can’t afford to do it right now”, or “I’m low on cash, sorry”, or “I promise next time I’ll make it”. At first I understood and accepted these answers, but I soon realised they were not necessarily reflecting episodic, isolated financial struggles. Instead, they were automatic-pilot-responses, after all, those saying they could not support a project were the same people who went for drinks several nights a week, who bought new clothes every month, and who paid expensive gym subscriptions. Back then, I had a strong feeling that it was either that they didn’t care or they didn’t handle money well. Today I see it is probably both and it is not necessarily intentional. In fact, it seems that their behaviour merely illustrates deeply rooted assumptions and habits our society has about money.

Beyond the actual cash balance, there is an aspect of relatedness in crowdfunding that many people seem not to see. Each project I have supported has given me social and emotional returns uncountable times higher than the value of money I invested. A perfect example to illustrate this feeling is The Slow Bakery. Wishing to expand their business and open a cafe in front of the bakery where they had been selling delicious slow-fermentation bread for nearly a year, a couple from Rio de Janeiro ran a crowdfunding campaign which I am proud to have been part of. Even though my contribution was symbolic, every time I visit The Slow Bakery I feel this genuine sense of connection. Having now completed almost four years since first opening the cafe, they have won prizes, been on TV and even opened a second bakery in another neighbourhood in Rio, and I’m incredibly proud to be part of their story.

I truly believe that if people started backing projects every month and felt the social and emotional returns that come with it, they would make it a habit. In fact, I know a number of people who put aside a fixed amount of money every month to invest in projects — just like their Spotify or Netflix subscription. To this day, I have pledged around £1,000 to 56 projects, 7 of which I contributed via a monthly subscription and it feels like very little impact compared to the potential that crowdfunding has. It is then inevitable but to think about the transformational power we could collectively awake if we re-signified our relationship with money; not only because we would support more impact-driven projects and businesses, but also because we would strengthen this sense of personal connection, belonging and satisfaction.

From Saving to Investing

About three years ago, a close friend of mine who has always been savvy with investments told me that by keeping my money in a savings account, I was gradually losing money over the years. He explained that considering the inflation and other rates I was unaware of, the purchasing power of my money was actually decreasing and therefore he recommended I transfer it to an investment bank and build a portfolio of investments. This conversation opened a new chapter of personal finance in my life. When going through the options, I understood virtually none of the terms, figures, percentages or conditions presented. I felt lost and pretty stupid. With the help of family and friends, I learned that there were three things I should take into consideration when choosing an asset to invest: first, the amount of risk I was willing to take, second, the rate of return I wished to receive, and third the timespan I could leave the money untouched. I finally transferred my money to a mainstream investment bank my friends recommended and divided it in two different fixed-income funds. It all felt so complicated, with so many variables, that I could easily see why people are so put off by the investment world. In the end, I could not tell what those funds really were, but I felt relieved by the fact that, as conservative as my investments were, at least I was not ‘losing money’ anymore. I left the subject behind me, in the best ‘set it and forget it’ investment strategy many people adopt, and carried on with my life.

New Forms of Money and Banking

During my masters programme at Schumacher College I was introduced to new forms of money and banking, including complementary currencies and credit unions. It was after one of the classes that it dawned on me how disconnected and short-sighted I had been with regards to my banking decisions. Even though I had worked with crowdfunding and seen the impact of my money, I had not been paying the same attention to my savings money. I realised that not only I had no real relationship with the banks where I kept my money, but I also did not trust them or had any idea of what they use my money for. I then revisited in my memory the options of investment I had considered when first transferring my money to the investment bank. One of the options was related to real-estate bonds, which might contribute to the real-estate bubble. Another option was agriculture bonds, which almost certainly translates into lending money to companies who practise industrial-scale agriculture, probably involving deforestation and heavy pesticide use. A third option I remember was Treasury bonds, said to be the safest option, and I am glad I did not choose this one as I would not be proud of lending money to Brazil’s current administration.

Although the funds I ended up choosing were not sector-specific, they still lend money for companies I know nothing about and whose activities I probably disagree with. That said, on my every day, individual level I had been working on and learning about creating pathways to an economy based on wellbeing, social justice and respect for the environment. Furthermore, through my purchase decisions I was acting accordingly. Nonetheless, the money I had been saving for my entire adulthood was actually financing the industries and fuelling the system I was trying to combat. This moment was an eye-opener: beyond financial independence, my next challenge was to explore my financial interdependence. In other words, it was time to start banking on my values and put the money I had saved in service of people and planet.

This time, however, before jumping straight to the part where I choose a new financial institution based on someone else’s suggestions, I have decided to first understand the problem. Put simply, I wished to have a better grasp of why and how the financial sector is intrinsically connected to the ecological and social crisis, as well as where our money is going and how we are playing a part in this system.