Mindful Finance is the Compass Pointing to the Returns You Want
Financial return remains a primary evaluation of investment success, and impact investing brings societal and environmental markers to the conversation as well. The Mindful Finance concept of ROI adds another consideration: you.
In this quick 9-minute episode, you’ll discover:
- How an inward-facing assessment expands traditional ROI
- How one simple question is the gateway to sanity in investing
- How the ancient maxim “Know Thyself” especially applies to modern investing
- How good outcomes can come from meeting with the expected and the unexpected
- How cultivating individual positivity could change an entire industry
Listen to Episode 4 below…
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Episode 4 Transcript:
Jesse Grimes: Hello, everybody, and welcome to the Mindful Finance podcast. My name’s Jesse Grimes.
Sol Halpern: And I’m Sol Halpern. We’re from Highlander, a Mindful Finance company, where we join matters related to money and matters related to personal experience. In this podcast we’re going to be examining the Mindful Finance concept of a personal return on investment.
Jesse Grimes: Before we jump into this idea of personal return on investment I thought it might be interesting to start with a more general understanding of what a return on investment even is, and so, Sol, maybe you could say a little bit about that.
Sol Halpern: 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, and the most common form of return on investment considered is financial gain, but in the last 20 years or so a subset of investors, the impact or formerly called socially responsible investors, have brought forth and espoused and championed this idea of non-financial returns being important as well, and specifically they point to things like social and environmental returns. And Mindful Finance has something to add to this conversation about return on investment, and this is the concept of the personal return on investment.
Jesse Grimes: You touched on the idea of the financial return on investment and then clearly started to bring in this wider lens, the social, the environmental return on investment, and obviously that’s really important nowadays, but this whole idea of a personal return on investment is really intriguing, and I would love to hear more about that.
Sol Halpern: These two ways of looking at things, the return on investment from a financial perspective or the return on investment from a, let’s say, social perspective, like improving the environment or improving working conditions or gender rights or those sorts of activities, which are outwards-facing goals– the Mindful Finance addition to this or twist on this is that we want to look at what the effect is on the investor, on the individual person who is making the investment for whatever purposes they may desire, but is that having the effect that they want on their own personal life? What we’re saying here is that Mindful Finance is concerned about the impact that your investments have on you, so you could say the impact assessment is faced inward. The overarching idea here is that if you take this view of turning the impact lens inwards and saying “How is my investment affecting my own life, my own sanity, my own sense of well-being?” then you get a more human view of how to achieve your goals as an investor, and you end up with a situation where you have a higher chance of being happy with your goals. In this way we get at the basic point here, which is that investing can add sanity and clarity to your life.
Jesse Grimes: So then how does one go about getting a personal return on investment?
Sol Halpern: The idea of a personal return on investment or of seeking that comes from our internal working with clients and years of mindfulness practice and study. The basic point of the personal return on investment is that this process of investing can support your own path to a good and meaningful life, and to have this kind of experience in investing it’s important to ask yourself “What do I want from my investments?” This simple question is a gateway to a lot of sanity in investing. Our experience working with clients to define what they want from their investments has been that it’s not a five-minute conversation. The potential is there to dig down many levels and into the values, goals, fears and other factors that affect your own answer to that question. The good news is that even just beginning, even just scratching the surface of looking into that question of “What do I want from my investments?” will bear fruit in the form of greater understanding of yourself and also investing in general.
Jesse Grimes: So you talked about using this one question as a gateway into this personal return on investment, this question being “What do I want from my investments?” And what I hear you saying is that we could really look at that in a much more holistic way, so instead of just looking at what I want being a certain percentage return every year or some kind of social impact, I could also then take it to this whole other level, which is “What do I sort of internally want from my investments? How do I want to feel about that?” Just wondering if you could talk even more about asking this question, and how much work are we talking about here, and how deep should we be going?
Sol Halpern: This shouldn’t have to be a lot of work. Starting with the question “What do I want from my investments?” the best method of approaching it is just to be very simple about it. List things like less worry, more clarity, peace of mind and other factors that have to do with what you internally feel would be wonderful to have from your investments. Even if we just establish a basic guide for our wishes in investing along those lines we’re already working with the concept of a personal return on investment from the Mindful Finance perspective. So having acknowledged our intentions as an investor we can reflect over time on how our investments are performing vis-à-vis those intentions, so we’ve got this roadmap now that we can compare things to, and 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 yourself or at least your investment self, if we can coin such a term, and invest from that basis. We’re placing top value on how our investments affect our life and our state of mind.
Jesse Grimes: As one works with that question, “What do I want from my investments?” and they take some time to simply just explore that question and see what comes up for them, I’m imagining obviously things will start to come to the surface, thoughts, and there’ll be some type of outcome that one experiences by doing that, and I wonder if you could say a little bit about that.
Sol Halpern: Addressing your investments from the perspective of the personal return on investment is a great way to set-up good outcomes. This does not mean that any particular investment will achieve the expected results. Instead these good outcomes can occur from meeting with the expected or the unexpected, and this is true because the path that is being followed is a path upon which learning can occur. We’ve set-up a process for reflecting on what happens in a manner that gives us information. The analogy we use here is that being an investor is like being a traveler. You’re going down a path. You don’t exactly know where you’re going or where the path is going to lead or what you’re going to encounter along the way in the path. However, walking that path with a compass to guide your choices when you come to crossroads or whatever is much different than walking blindly and choosing the directions that just happen to come to mind at the moment without any real guide, so this process of examining the question of “What do I want from my investments?” gives us this compass. It becomes this guide that can help us in our investment decisionmaking and in analyzing the outcomes that we’re seeing over time.
Jesse Grimes: This all sounds really good in theory. I’m wondering, Sol, if you could share some of your own personal experience working with this concept or the experience you’ve seen when you work with clients around this.
Sol Halpern: I was recently working with a young woman who had just come into a lot of money, and she expressed concerns about becoming an investor. She was not an investor prior to this, and the reason was that she didn’t like the way that the world was going. She didn’t like a lot of the things she was seeing, and she saw the financial system and investments as being a part of perpetuating that, so we took a step back, worked with this idea of a personal return on investment and examined her values and her goals and the things she’d like to see changed in the world as well. And we were able from that to build a portfolio that included pieces of all of her goals and wishes, and she ended up being ecstatic about that and is really excited about taking this journey as an investor now. So this is what Mindful Finance is all about, working with how finance affects people, and from there it’s only a short step to see that finance can be a strong positive influence in the world in general. If people are feeling like they are getting more of what they need and what they want from their financial lives then that’s going to have ripple effects throughout the whole world. In the sphere of investment this positivity should start at the level of the individual investor seeking their own personal return on investment, and if they do that it will bring an expression of their values into their investments, and everything can change from there.
Jesse Grimes: We’ve come to the end of this podcast. Thank you all so much for joining us.
Sol Halpern: We have explored the Mindful Finance concept of a personal return on investment here.
Jesse Grimes: Join us next time as we offer some practical exercises to help us arrive at a greater understanding of our investment selves.
Sol Halpern: Thank you so much for joining us.