What You Need to (But Don’t) Know About Impact Investing

The way in which we invest our money has come a long way in the past few decades. Nowadays, it’s not all about the money and your return on investment — although most people might argue that this is the main point of investing.

In today’s world, you can now be intentional about how you invest, also known as impact investing. If you’re wary of how investment companies spend their money, now you can invest with a conscience. 

To learn more about global impact investing and what it means to make a difference, just keep on reading. 

Impact Investing Explained 

The overall premise of impact investing is to make money while serving the greater good. Impact investments serve the purpose of generating positive change in the world — whether it’s environmental or social.

In essence, you’re investing money towards a cause that’s beneficial.

So, if you have your concerns about how your investment gives back to the world around you, impacting investing is for you.

Common Types of Impact Investing  

Within the impact investment field, you’ll find three key core investment types. These include: 

• Healthcare
• Education
• Agriculture

This type of investing has become exceptionally popular in recent years. Many young investors now opt to spend their money on a beneficial investment, rather than broad market index funds. 

A common example is choosing an investment that contributes to research based on how to combat climate change. Rather than investing in an oil company that contributes to it. 

The Core Elements of Impact Investing 

There’s no denying the positive change and far-reaching effects of impact investing. But, all in all, this is what you want to keep in mind when choosing an investment company.

1. Invest Based on Evidence

If you’re choosing to invest in a company that’s socially or environmentally conscious, they must provide all the right evidence. 

It’s important that the company uses empirical evidence, based on reliable research and data. This is their way of proving their worth to you as a conscious investor. 

The company you choose, such as Convergence Partners, must ascertain the impact of an investment and clearly explain that to you. 

2. Invest With Intention

If you aim to truly make a difference, it’s important to establish your investment goals and an investment action plan. You want to invest with intention. This means you’ve done your research on what to invest in, why it’s important to you, and how it can make a positive difference. 

When establishing your investment plan, seek out companies that offer an established plan on giving back to the greater good. 

3. Aim for Industry Growth

There’s no denying that investing is about making money over the long term. However, you should do so with a sense of community at the forefront of your investment plan, too. 

You want to contribute to the growth of emerging industries that benefit the world in a social and environmental way. This also means sharing your investment knowledge with others. 

4. Focus on Impact Management

Before you make your investments a company must prove that its product or service is viable. This means that their services or products will go through many iterations before they’re signed off or acceptable. 

You want to choose a company that’s spent time on ensuring that their products can, indeed, make a beneficial change. 

Are You a Budding Entrepreneur? 

If you’re interested in boosting your income while making a positive change, impacting investing is your go-to.

As an up-and-coming entrepreneur, knowledge is power. Be sure to explore the rest of this site to build your business knowledge and find success.