Is Investing an Ethical Thing to Do?

by Darwin on August 30, 2016

It’s no secret that someone with solid financial sense and a series of clever investments can see themselves quickly become wealthy and successful.

On face value then, this process can be seen to be something quite admirable. The notion that someone can use their intelligence to turn a smaller amount of money into a much larger one simply by selecting something they think will be profitable does, it’s fair to say, require both bravery and understanding.

However, when you look at the bigger picture that’s involved in investing, it does start to raise some questions about whether or not certain practices are something that could be considered ‘ethical’ to do. More specifically this applies to the different types of investments that are available, the people involved, and the means in which profits are made. Here we take a general look at this investing and consider whether it can be considered ethical or unethical.

What is meant by ‘ethical’?

The term ‘ethical’ can be defined as something which is considered moral, or which adheres to a set of principles which pertain to a sense of what’s right and what’s wrong. This is the criteria we’re applying in this post to the types of investments you could make.

What Types of Investment could be Considered Unethical?

In relation to this definition there are certain areas and places to look to make profit that could be considered ‘unethical’, here’s a few examples:

  • Energy sources which are damaging the planet like oil and coal
  • Weapons or items which can be used to cause harm
  • Alcohol, tobacco or gambling-related products and services
  • Products harmful to the environment
  • Investments that are insensitive to other cultures
  • Any items that are manufactured by exploitation or human rights abuses

Are the Potential After-Effects of your Investments Unethical?

Along with the actual investments themselves, there’s also the practices involved in trying to get the financial rewards out of them.

One of the core parts of ‘winning’ with investments is that there will always be those that fail and those that succeed, with this then the ethics behind getting ahead at the expense of others may be called into question. On top of this there’s also the knock-on effects of you succeeding in that you could be costing other businesses the possibility of help and support by stopping other investors from helping them out.

The Future

Another aspect is that something which may appear at first to be an innocent investment may well become something negative in the future. Certain companies or schemes may change over time and the ethos they may have initially had in place could become different and not in-line with your personal beliefs. This means this is another aspect to consider before you put your money into anything.

What you can Do: Positive Thinking with your Investments

There are certain areas you may wish to invest in which arguably have positive interests at behind them, this could be:

  • Green energy and other sustainable resources
  • Investing in medical supplies and support for those that need it
  • Education, general social and health care and recycling initiatives
  • Putting money into innovations in future technologies

The argument by some experts here could be that although you have your best interests at heart (with your profits), you’re still putting money into something that is fundamentally going to help and support others. Also, if you were to use the support of others with your investments you can be actively seen to be sharing the responsibility so the decision making goes through others and you get a more balanced view.

The Bottom Line

At the end of the day however, the fact of the matter is that the choice lies solely with you as the investor. You can always seek additional financial advice and support with your investments, but it does seem that common sense is the best indicator of whether or not you’ll be heading towards a more moral/ethical option.

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