As investment professionals, at Highlander we spend a lot of time contemplating how to improve the return on investment that we can provide to our clients. The most common form of return on investment considered is financial gain.
In the past 20 years or so, a subset of investors, the impact (formerly called “socially responsible”) investors, have espoused the idea of non-financial returns being important as well. Specifically, they point to social and environmental returns.
Mindful Finance has something to add to the conversation about return on investment. This is the concept of a Personal Return on Investment (PROI). The big deal here, or the “twist”, is that Mindful Finance is concerned about the impact that your investments have on you. You could say the “impact” assessment is faced inward.
…ask yourself: “What do I want from my investments?” This simple question is a gateway to a lot of sanity in investing.
The idea of seeking a PROI comes from both years of working with clients and years of mindfulness practice and study. The basic point of the PROI is that the process of investing can support your own path to a good and meaningful life. To have this kind of experience in investing, it is of paramount importance to ask yourself: “What do I want from my investments?” This simple question is a gateway to a lot of sanity in investing.
How does answering the question “What do I want from my investments?” open the door to sanity in investing? The best way to find out is to try to answer the question for yourself. Our experience working with clients to define what they want from their investments has been that it is not a five-minute conversation. The potential is there to dig down many levels into the values, goals, fears and other factors that affect the answer. The good news is that even just beginning to work with this question will bear fruit in the form of a greater understanding of oneself and investing in general.
Establishing the Basics
If we establish a basic guide for our wishes in investing, we are already working with the Mindful Finance concept of a Personal Return on Investment. Having acknowledged our intentions as an investor, we can reflect over time on how our investments are performing vis-a-vis those intentions. We can also bring awareness to the ways in which our wishes change over time. Taken as a whole, the point here is to know oneself (at least one’s “investment self”, if we can coin such a term) and invest from that basis. We are placing top value on how our investments affect our life and our state of mind.
Addressing our investments in this way sets up good outcomes. This does not mean that any particular investment will achieve the expected results. Instead these good outcomes can occur both from meeting with the expected, as well as the unexpected. This is true because there is a path that is being followed, upon which learning occurs. It is profoundly different to walk a path with a compass to guide your choices (even if you don’t know exactly where you will end up), than it is to blindly choose a direction at each crossroad.
Through many years of experience as investment advisors and through our mindfulness training background, it has become clear that the investment “impact” that is the most important is the impact of a client’s investments on themselves. This is what Mindful Finance is all about – working with how finance affects people. From there, it is only a short step to see that finance can be a strong, positive influence in the world. In the sphere of investment, this positivity should start at the level of the individual investor seeking their own Personal Return on Investment. This will bring an expression of values into investments, and that can change everything.
Sol is president of Highlander Financial. He has over 20 years of experience in financial markets and managing businesses.