Issues
Investing Your Yen Ethically
Interested in putting your extra yen to a good purpose, and making money at the same time? If so, please consider investing with RainFrog Ethical Investment Partnership, an investment club whose members are mostly current and ex- JETs. RainFrog is an environmentally responsible investment club who aims to profit by helping to fund businesses with a positive environmental impact.
Ethical vs Conventional Investment
The start of the JET job for me was the first time when I had money to save. So about 2 years ago I sent $5,000 off to a professional investing firm. The manager was a friend of my father's and considering my age he chose some "aggressive growth" mutual funds. 2 years later my money is now worth $2,500. Since then, I've read a little more and researched a little more. Not only are my mutual funds investing in companies I don't agree with ethically, the mutual fund managers are still collecting fees and earning a probably fat income … even though my investment has been halved.
Meanwhile, Rainfrog has yet again posted a positive growth for this month. On top of that the members are encouraged to actively vote where they want their money to go: a miniature economy based on participatory democracy. Rainfrog looks to invest in companies making a positive effect on the world, it's not just a speculative act focused on material accumulation. I find it rather inspiring.
So I hope if BEE SIG members are not in a position to join a venture like Rainfrog now they will at least keep it in mind for the future. At the same time I hope other environmentalists will avoid my shortfall and have more faith in a green economy than I did in the past.
—Shane Morkin
Essentially the idea behind ethical investment, and thus behind RainFrog, is that whether they know it or not most people have money invested in things that they just don't approve of. If your money is in a conventional bank or mutual fund, you can count on the fact that some portion of your money is ultimately invested in industries such as petroleum, weaponry, and tobacco. As environmentalists we can recycle our bottles and write letters to our representatives in government, but if our money is out there supporting exactly the things we say we oppose we are not going to make much progress. It would be like getting up from your chair and trying to walk to New York--when you are on a train going to Chicago.
We all need to save money for our futures. Fortunately, it is possible to invest your money in such a way that it has positive social and environmental impacts and still returns a yield. Industries such as alternative energy and organics have high growth potential, and perhaps more important, they play a role in making our planet a greener place.
Most individuals, especially those of us of limited means, can't afford to invest solely in environmentally friendly institutions. While many green businesses have great upside potential, they also tend to be very new and to present more risk than more established businesses. Thus, a green portfolio requires a great deal of diversity if it is to give us both a fair return and a suitable amount of security.
RainFrog is based on the principle of collective investment. Each of RainFrog's members can invest as much or as little as they want in the club. The money is then pooled and invested in a portfolio that is more diverse than any single member could achieve on his or her own. By investing as a group, we save money on commissions, currency conversion, and account fees as well. Each member has a capital account which is proportional to his or her investment in the club, and part or all of this can be withdrawn when the member needs or wants it.
RainFrog is organized as a general partnership. Investment decisions are made by the club's members. That means we can be as strict as we would like when setting our investment criteria. This is an opportunity you don't have with a professionally managed mutual fund.
Acknowledgements
Contributed by Tucker Gilman, Rainfrog founding member.
If you would like to find out more information about Rainfrog, you can download their detailed investment information (rainfrog-handout.pdf), and their application form (rainfrog-application.pdf), or visit their website.
