Impact investing was first coined in 2007. As an investment strategy that focuses on corporate social responsibility, it’s considered an extension of philanthropy.
Impact investors measure social and environmental performance. However, the investor’s portfolio builds upon the investor’s goals and intentions. Some impact investments may not make an environmental impact, while others do.
1. Evaluate your financial goals, risk profile, and investment strategies. Do you understand how to invest? Are you able to manage your investments, or do you need to work with a financial advisor or broker?
2. Determine where you want to make an impact. Where do you want to make an impact, and how does it align with your financial goals. Once you’ve identified your passions, establish a financial plan to invest in those assets.
4. Get your finances in order. Pay off bad debt and prioritize investing. Establish good money habits that include budgeting and avoiding debt. Minimize unnecessary spending.