INERTIA. It’s an interesting word. It’s a word linked to physics and causes most of us to think about the time we didn’t quite put the parking brake on full, much to the distress of our garbage cans.
But did you know that inertia comes from the Latin word for idleness or laziness?
That’s why Johannes Kepler, in his 1621 Epitome Astronomiae Copernicanae, got the physics ball rolling by defining inertia as “resistance” to movement. He thought that the natural state of things was to be at rest, a fact so obvious that it needed no further explanation. Or so he thought.
Sir Isaac Newton didn’t agree. He thought inertia was an “innate force” inherent in matter that resisted any acceleration — image yourself lying on the couch after a hard day at work, and you get the point. If something or someone doesn’t push you off the couch, there you will stay, for what is at rest (or in motion) stays that way unless upset by some external force.
But wait! That’s not all. Enter Einstein. Yes, Einstein! Einstein’s theory of relativity radically redefined the concept of inertia to include not just mass (you on the couch) but energy as well. Seems our energy is either moving or not.
Now, if you look up the meaning of inertia in psychology, you find it indicates an indisposition to change. More colloquially, we can get stuck in a state of mind. Even if we want it, change is hard to achieve. Think of diets, exercise, disciplined work habits, tidiness etc. All infuriatingly unidirectional and usually away from where we want to go!
Inertia — the tendency of people, having once established a life trajectory, to continue on that course unless acted on by a greater force.
From time to time, we can summon the energy or take a bump from someone or something to change our ways. But it seldom works for most of us. And even if we do happen to shake off whatever habit we don’t want, at some point we usually revert to the mean (as in the average) of our behavior.
Getting people to change their habits is tough even when clear and present personal danger is involved. Take health care. Everyone who smokes now knows tobacco causes cancer, but millions continue to smoke. Not taking all our prescribed antibiotics was once thought to cause a relapse of symptoms, yet how many bottles half full of pills do we have in our medicine cabinets? Seems we are bound by inertia to do nothing about things we know will hurt us.
Self-destructive inaction happens for many reasons.
People don’t like medicine or doctors’ offices, or maybe they can’t afford to take care of themselves. The bigger part of the challenge is not, however, rooted in rational thought but “in the powerful cognitive bias against change.” It seems unless forced to do something differently, we keep repeating behavior that dooms us in doses large and small.
Take the experiment where dozens of participants were told they had a 90% chance of not getting a big-ass electrical shock in ten seconds unless they pressed a little button.52 Shockingly, more than half the participants waited to get their shock!
Sound like our collective approach to climate change? Once again, I digress.
Another group was instructed to push the button to protect themselves from a pending shock prior to the experiment beginning. Of those who did the warm-up-button calisthenics, almost all of them took the 90% no-shock option during the experiment. Seems simply pushing a button was enough to redirect their psychological inertia and make a rational decision.
So many fail because they don’t get started — they don’t go. They don’t overcome inertia.
— Ben Stein
The upshot: When faced with a choice requiring a proactive decision, people often do nothing, even when the simplest of actions could clearly improve their current or future state of being. But how to change?
Doctors sometimes break the ice of psychological inertia by administering a first dose of a medicine, arranging a free workout session, or walking to the drug store with the patient to get that nicotine patch. Psychologist Kurt Lewin argued over fifty years ago that individuals who remain “frozen in place” even when presented with attractive opportunities can be helped into a new direction. All they need, he posited, was
• Some sort of disruption, a shock to get unstuck and moving,
• To realize they desire change because of the disruption, and
• To get restuck in a new and different state and direction.
Seems once you are bumped into acting, once movement is initiated, inertia helps you to keep moving in a new direction. Just a little nudge can get you off the proverbial couch.
The trick to getting off the proverbial conventional investment couch is to get moving, directing your energy and mass into a more and better SRI direction.
My Stomping the Devil of Inertia process for more SRI has seven steps. Each step requires just a little work, each designed to motivate a small change and give you a boost of energy, scooting you toward putting your values into action.
The Devil.
An imaginary externalization of human evil used as an excuse for immorality.
As in the devil made me do it :(
— Urban Dictionary
You can decide the amount of time to take between steps, but you need to know that, according to Sir Isaac and millions of failed dieters, anti-inertial forces lurk to slow your process. Set reasonable, life-manageable timeline targets for getting each step done, but don’t let things slide so long that you lose that righteously won momentum.
If it’s important, you will make the time. If not, stop reading now, knowing your sustainability impact is lost to humanity forever, and that the Devil and immorality have won the day….
Kidding — I would never try to guilt you into this really… Really, I wouldn’t.
(Before you enter this process, know that it is designed to have you make investments, or at the least direct your financial planner/ broker to do so for you. If you are not up to doing this while meeting your financial and/or investment goals, do not, I repeat, DO NOT EVEN TRY! But you don’t get a refund on this book either, so don’t ask.)
Go somewhere quiet. Meditative. Then reflect on the values you care about most deeply. Connect with them, really connect. Connect in a deeply personal, visceral way.
Connect to something you care about so deeply it sends you mad, glad, or sad when you think about it and all the things companies are doing to make it more of a mess. Or think about how you could address this profound value to right wrongs and make things better.
If you have a significant other, get them to join you. Contemplate, mediate. Then both write your top three choices down on a slip of paper. From each other’s slips, choose the one you least identify with. Do it again. Then again. Now of the two remaining issues, choose one. If you choose the same one, great. If not, figure it out. I can’t get you any closer than this!
A single-issue focus can be quite powerful. My friend Simon has worked in SRI for years, sustaining his vision of sustainability by fighting against heartbreaking human rights violations in Burma-Myanmar. Heather has been motivated for years by factory workers’ rights in China. (She and Lynn Zhang produced an amazing documentary, Complicit.) For me, it’s been how our transportation systems have ruined cities, wreaked havoc on communities, and fouled our environment.
But why just one issue?
What I have found through advising hundreds of people on sustainability, finance, and economics over the years is that we all have so many different issues we care about, the complexity of it all can make doing something about it all just too hard. Narrowing your issues down to one you really feel for makes action easier. I did this in my own portfolio make-over a couple of years ago, and it worked charms. After I sold my first awful stock and bought trains… Wow — was I motivated to think about the next, and then the next, etc.
When you are done finding your issue, congratulate yourself, this step is done.
Tell family, friends with similar interests, the barista at your favorite café, anyone willing to listen. Scribe your issue on a piece of paper and tuck it into your wallet, post it on the fridge, or write it on the mirror in your bathroom. It’s important!
Now, make an inviolate date with your computer in one week. The state of humanity hangs on your ability to make this date.
Now that you have waited a week, you are going to make an SRI that matches your values.
TODAY.
Right now, in fact. It will have nothing to do with your asset allocation, nothing to do with your retirement. Nothing to do with anything except the deeply held value you defined last week. Take out the paper you stuck in your wallet (or peel it off the fridge, or wipe it off the mirror). Time to get excited.
Go to your computer. Now type SRI and your value into your browser search engine. Do not look for a HUG (an investment with Huge Uncomplicated Gratification). Look for something simple, like one of the many SRI index or mutual funds.
When you find a fund or investment you like, don’t worry about the fees or making the wrong decision. Fill out the forms, get out your card, and buy fifty dollars’ worth. (Note that some funds have minimum investments, so check that out before getting too excited.) But if you can, get fifty dollars worth, no more, no less.
If you don’t have an online investment account, there are many to choose from. E-Trade, for example, allows you to set up an account with which you can trade for free for six months without a minimum deposit, after which you need to put in five hundred dollars. If you don’t want to keep the account, you can withdraw the money. If you can afford the five hundred dollars, then by all means keep the account running!
If you have a financial adviser managing your portfolio, call them. They might try to talk you out of it. Tell them you respect their advice and services, and that they are a good adviser, but you are working on a project to save the world and they should support you. Be clear what you want. Don’t argue, don’t proselytize. Tell them you don’t want to pay for the trade either.
The simplest, and in my mind best, way to do this is by going to the Calvert Foundation website. Once there, look for the Invest button, click it, then click Community Investment Note. From there it will take you through a less-than -five- minute registration process.
Push the “Buy” button, and have fun!
However you do this, once done, print out a copy of your investment receipt. Pin it to the wall, tape it to the fridge, or paste it to the mirror in the bathroom. If you have a used frame about, frame it. Put it somewhere you and, importantly, others will see it all the time.
Now write three friends and tell them what you did. If they write back saying you are nuts, or great, or unbelievable, invite them for coffee, so you can tell them about it. Don’t proselytize, but if they ask.... Or go to a BBQ, cocktail party, soccer practice, and brag. You are now, even more than before, part of the solution!
But right now, go have chocolate or cheesecake or a beer or something. Celebrate your second step toward more of the kind of world you want for your kids, your grandkids. Think of all those marmots, polar bears, fungi, communities in Africa, etc., you might save through your investment.
Finally, read the next step below. Once you are done, define a date for taking it.
If you have not done your SRI and/or financial asset allocation homework, do it now — both financial (Part Two) and SRI (Chapter Twelve). If you have already done them, celebrate and go to the next step, or just celebrate! If you decide on the latter, set a date to do Step 4.0.
This step is the simplest and the hardest. Through it, you must find where you keep your investment information. Once you have, and I understand this may take a moment for some and hours for others, you are going to get organized to use the SRI asset allocation tool from Chapter Eleven.
If, like many others, you have investments held in different places, and the records are spread out among different folders — electronic or otherwise — you might have to make an Excel spreadsheet to list them all. The list should include the basics for now: name of holdings, value of holdings, the number shares/ units you own, asset allocation type, and any applicable fees. (See Appendix Five for fee information.)
If you are lucky like me, and all your investments are listed in one accessible place (my online brokerage account) and you can remember the password (I keep all my passwords in a super-encrypted file), bookmark the page on your browser: You are going to be checking it more often.
If you have a financial adviser, tell them you want this list. If they can’t do this for you, wonder why they can’t, and/or why you are paying for their services. Let them know what you are wondering about. The list should come pronto.
As per Step 1.0, meditate on your summary list. Wonder what is in each item. Wonder about their performance.
That’s all you need to do for now.
You are done.
Have a sustainability treat of organic coffee or wine, or maybe get your SO who didn’t do all this work to take you for dinner. Or just dance around a bit. You must CELEBRATE because YOU are once again an even bigger part of the solution!
I hope it’s a rainy, late Sunday afternoon, or maybe early morning as the sun is coming up. A quiet time. Open your investment list.
Mediate for a minute and then repeat: Ignorance is not bliss. Information and knowledge are power. This is your mantra. Say it a few times because the objective of this step is to learn and then find and make one or two real SRI investments.
First, take out the spreadsheet of your investment holdings. Look at them one at a time. If they are mutual funds, describe them, each of their holdings. If they are stocks and bonds, what companies or governments do they belong to? Go to Morningstar to get free basic descriptions of the funds and/or securities if you need to.
Do you see what you like? Anything jump out? Research each fund or security as much or as little as you like (hint: a bit more is better). Make a note or two as you go through them and reflect on your values.
Now spend thirty minutes researching an SRI alternative to the one or two funds or securities you don’t like the most. Assuming you have the asset allocation you like, you will need to have an alternative in the same asset class.
There are many ways to do this. Morningstar has sustainability ratings for many securities and funds. A general browser search will also yield great treasures of information. Appendix Six has a list to get you going as well. You can check out performance on Morningstar, or go to the company website. Remember to check fees.
If you are looking for securities, you can go to the SRI fund holdings of a desired asset class and see if it’s there or not. SRI index funds, or ETFs, have good listings, but remember the screens applied are not aggressive and may be too generalized for your liking. You can get more information on the screens either directly on the site, or you may need to read the prospectus.
Remember to check the financial asset class of the security, including if it is large, medium, or small cap. Check out reviews of fund or stock performance. There are many good and free sites with historic performance analysis.
Pick one or two SRIs you would like to make. The list can include getting rid of something you don’t want! Check against your financial asset allocation to make sure it’s in line with your risk and return needs.
If you have a financial adviser, I recommend you do this step anyhow. Then call them and tell them what you did, how easy it was, and that you expect them to know about SRI if only because SRI investments assets total over $6.7 trillion. If they don’t know or care, why are you using their services again?
Yeah! Now go talk with a friend about the investments you want to make. Maybe you can convince them to do the same! Take them for lunch; get them to be part of the solution. Personally, I would buy them a copy of this book. Tell them I said Hi!
Now I am going to recommend you slow your inertia down just a bit. Take a couple of weeks or so to think about your list. At the end of the gestation period, decide which to buy or sell. Best make the decision on a Tuesday one or two weeks hence, because you are going to buy an SRI on Wednesday after 11 am, when buying is theoretically and historically at its best! Best to watch the news the night before and mid-morning in case there is some market-shaking news going on. If there is, wait another week.
You are almost there! Contemplate life as an SRI investor, as it will soon come to be!
This step is not so hard to do. You can do this as a part of the previous step or you can do it in the week(s) you are thinking about whether you really want to buy a fund/stock or not.
Once you know the type of SRI asset you want to buy, simply type into your browser the benchmark for your investments: “asset type X.”
If it is a fund, type “benchmark for XX type fund or stock” (e.g. international large capital equity fund). The query will give you a fund or stock market index against which to assess your stock/fund performance. (See Appendix Seven for some examples.) For example, I hold MSCI KLD Social 400 ETF, which holds 400 U.S. large capital companies and benchmarks against the MSCI USA IMI.
Fast forward to the Wednesday of your choice. Cue up the investment buy button up at 10:30 am. At precisely 11 am, push “Buy” and make a REAL SRI investment. Or call your financial adviser to do the same.
You’ve done it! A real SRI!! You are my new hero.
Go out to a local brew pub or organic garden market, or do something with lots of sustainability HUGs to celebrate. You must do this and you need to take your SO or a good friend. Tell them what you did: Relatively speaking you are an SRI pro now, so don’t let ’em go; get them on our team.
For most of you, the steps above will take between one to three months. Any more than this leaves you open to any number of things that can bump your mass and energy off from where you want to go!
Don’t be the Titanic! Now that you have moral and physical inertia high ground, the Devil sulking away in some faraway corner, you can repeat Steps 4.0 through 6.0, replacing your funds and securities one at a time, as I like to do, or all at once. Before you know it, you will have a resplendent SRI portfolio. If you are training your adviser, it may take longer, but they will get on board — or you can find one that will!
Be very careful to do your asset allocation work. As mentioned earlier, in my haste I once bought far too much transportation stock, and when transport went into the “ditch” I was stuck with losses that are taking some time to bounce back. So pay heed; take your time. Unless you know something other stock pickers don’t, you don’t need to time the market. I advise taking a week to gestate on every selection. If nothing dramatic happens during that week, it’s okay to buy.
Do the process until you are done reallocating everything in your portfolio, from conventional burn-the-world-securities and funds to great, green, vibrant, and harmonious SRI.
If you are a “Buy-and-Hold Polly,” you are done for a year, after which you may have to rebalance your allocations. If you are a bit more active like Joe or me, you can muck about daily, weekly, or whenever!
Finally, if you don’t feel you can do this and meet your financial and investment goals —
DON’T EVEN TRY! Get a professional to help.
If avoiding tobacco or dropping Coca-Cola from your portfolio just isn’t enough, you can do what Jennifer on the West Coast did and go for a big HUG. Remember, most HUGs are packed with potent social impact possibilities but also often have tons of risk or turgid liquidity.
Start small if you can, never ever more than 10% of your assets, and less if you can, at least to start. Even if you have lots of money you could happily lose, start small. Being a responsible sustainability investor is important to the success of HUG-like investments. They need informed and active investors to ensure they perform.
I always looked at HUGs as either safe and below market returns, or amazing potential returns but with risk that makes me think of them as a donation. Look at Calvert Foundation or one of the many community development fund investment options. Investing in a local credit union is also a good way to support local investments. Some have long-term certificates of deposit that are fairly liquid, and you don’t always have to be an active member, or even a member of their geographic community, to join or buy.
Some companies, like Veris Wealth Managers, have great depth of experience in HUGging but tend to work with larger clients. Many of the First Affirmative Financial Network advisers also know about HUGs, as do several advisers in Progressive Asset Management, Walden, and others. All good folk, but do your due diligence on any adviser before signing on the line. (See Bonus Chapter for some considerations on how to select an adviser.)
Whatever you do, look for the HUG that suits your passions! The HUGs I made in the 1990s in funds supporting labor in new tech ventures and preferred shares in a community credit union gave me tons of happiness. Remember, too, that I lost some money as well as well as making some, so be careful.
Most conventional financial advisers will not likely be able to help you find a HUG. This is one occasion where I would not even ask why they are your adviser. What they can and should do, however, is advise you on how a specific HUG will fit in your long-term investment plan, as well as asking all the right risk, allocation, and liquidity questions. If they don’t, why are you using their services?
When you have done Steps 1 to 7, your investments will be in full balance with your values.
Your mass and energy will not only be pulsing hot happy but will be pushing you toward your own chosen sustainability destiny. You will also be part of a great energy force pushing millions of other sustainable and responsible investors toward creating a more just and sustainable world.