Wealth Beyond Money – Part 2: Creating the World You Want to See

This is Part 2 of the chapter I wrote for Pearler’s book Aussie FIRE: The Ultimate Guide to Financial Independence for Australians.

I felt privileged to work on this project, compiling the writing of 20 co-authors for this 290-page epic guide. This comprehensive (and FREE) resource is excellent for newbies and seasoned FIRE folk alike. Download here and find me at Chapter 24 and the Conclusion.

The first part of this post is at Wealth Beyond Money – Part 1: Why You’re Richer Than You Knew

---

Creating the world you want

While we’re discussing wealth beyond what is in your bank account or your investment portfolio, it’s a good time to talk about how we can enhance wealth in the world around us.

As you’ll know, the pursuit of financial independence is about intentionality and aligning how you use your resources with what you value. It’s about making deliberate decisions for how you spend or save for your desired lifestyle. And because we don’t exist in a bubble, I’ll bet that your desired lifestyle will typically include being in a clean, healthy environment in a safe community that’s part of a robust society enjoying positive well-being.

Here we can see some of these other forms of capital in play. Investing in the living capital of our environment, the social capital of community, and the cultural capital that grounds us has benefits extending beyond ourselves.

Let’s look at some ways you can use your resources and wealth to create the kind of place you want to live your best FI life within.

Value-based spending

You may have heard it said that each dollar you spend is casting a vote for what you want to see in the world. It’s saying “yes” to showing support and creating demand for a particular business, service or cause. At the same time, the dollars that you don’t spend also make a small statement towards your desired personal and community life.

With this in mind, it’s worth considering taking time to consider a short spending policy for yourself. This can help guide you when making purchase decisions, so you are reminded in the moment to spend in alignment with your values.

• Will you avoid or reduce spending at certain businesses or on selected products? Eg. Avoiding cosmetics with animal cruelty, products with excess packaging, or corporations with a history of unfair labour use?
• Will you choose to spend in the small business or café nearby, even if more expensive than a large chain, so your funds help its family owners to keep the doors open and save diversity of businesses in your area?
• Will you choose to buy second hand, or not purchase at all, to limit waste to landfill and reduce new resources being used?

Be a conscious consumer and think about what you want to see for the future of your community and environment – then put your money where your heart is! We can’t get it right all the time, but if we aim to bring some of our signature FI intentionality and reflectiveness to our spending, we’ll all be richer for it.

Ethical & socially responsible investing

Following on from value-based spending, you may wish to bring these values into your investments – especially in the share market.

According to Canstar: “Ethical investment (or responsible investment)… is when an investment is selected to complement views on moral, environmental or political matters.”

These options are growing in popularity, especially as climate change becomes a growing concern across the world. Depending on the ethos of a certain investment product, negative screening may exclude certain corporations (such as those in fossil fuels or coal mining) and/or positive screening can actively seek out companies in priority areas (for example, renewable energy companies).

• There is no single perfect way to do ethical investing, as everyone’s values vary and it’s challenging to represent all concerns in one investment option. You’ll need to consider what your main priorities are – such as your stance on gambling, weapons, old-growth forestry, uranium mining, underrepresentation of women on corporate boards, etc.
• Being clear on your motivation for whether or not to pursue ethical investing will help decision making. For example, you may be uncomfortable earning profits from corporations that don’t match your ethics in doing so; you may anticipate better future returns by avoiding companies focussed on depleting fossil fuels; or you may even choose to be a shareholder for certain companies to advocate for change from within.
• Ethical investing typically has higher management fees, with fund managers being more actively involved due to the company screening process, vs. basic low cost index funds. You’ll need to weigh these against potential returns and your motivations.

Do your own research to see if ethical investing options suit your preferences and needs. Organisations such as Australian Ethical Investments offer a variety of ethical managed funds based on different criteria. If you prefer to buy exchange traded funds on the stockmarket, you might like to review Betashares’ Australian Sustainability Leaders ‘FAIR’ ETF (including 80 local companies) or Global Sustainability Leaders ‘ETHI’ (including 100 international companies). You can read more on how I choose to invest here.

Giving

Another way to help create the world you want to see is through charitable giving to the causes important to you – whether with money or volunteer time.

Giving generously to organisations, services or directly to people who need it can create positive change and improve lives. Making room for giving in your budget can also foster a sense of abundance and boost your own joy. There is a quote that reads, “No one ever went broke from giving.”

• Similar to a values-based spending policy mentioned earlier, consider having your own short giving policy. Identify the organisations and causes you want to support and the ways in which you will commit to doing so – whether through automatic donations, adding a bequest in your next will update, setting aside a regular budget line for spontaneous giving, or signing up to volunteering on a project.
• If established charities don’t resonate for you, consider supporting causes in different ways such as through advocacy on issues, sponsoring local amateur sports teams, donating books to libraries, or setting aside money for direct gifts to extended family or community members in need.
• For FI enthusiasts who enjoy optimisation, you may like to join the Effective Altruism movement, which conducts extensive research into the most effective charities providing the highest benefit for donations.
• If you are making financial donations to Australian charities with DGR status, don’t forget to keep receipts for tax deductions on donations.

I’m glad to have been able to share a more well-rounded picture of wealth in this chapter. I hope it has opened up your views on the many different resources in your hands and the positive impact you can have with them on your FI journey.

In case you missed it, the first part of this post is at Wealth Beyond Money – Part 1: Why You’re Richer Than You Knew

Photo by PhotoMIX Company from Pexels

---

About Michelle from Frugality and Freedom | frugalityandfreedom.com

Michelle is a mid-30s semi-retiree, sharing her journey towards financial independence on her blog at FrugalityandFreedom.com. Michelle alternates between seasonal events work, online freelancing and long-term travel – visiting 40 countries so far. She writes with the perspective of pursuing FI as a single person on a modest income, emphasising lifestyle design and enjoying the FI journey as much as the destination.

Michelle writes about frugal hacks, solo travel, housesitting, minimalism, sustainability, and ethical investing. She is passionate about connecting with others in the financial independence community, including highlighting different voices through the Australian FI Weekly series.