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Warren Buffett and the Quest for Socially Responsible Investing

Warren Buffett Just Committed 50% of His Fortune to THIS...

Written by Jeff Siegel
Posted September 27, 2016

I’m a big believer in the positive power of capitalism.

While thin-skinned millennials and socialist apologists love nothing more than to vilify capitalism, the truth is there is no greater force for good than an honest free market.

It is capitalism that allows us to live long and comfortable lives. It is because of capitalism that we have indoor plumbing, 24/7 access to heat and electricity, and access to state-of-the-art medical facilities.

It’s because of capitalism that we don’t stand in lines for toilet paper. It’s because of capitalism that I can write this piece on my laptop while sipping organically produced Ethiopian coffee from the comfort of the corner couch in a small coffee shop in the middle of North Country.

Hell, it’s because of capitalism that you’re reading this right now.

Most investors understand the power of capitalism. We understand the value of creating and protecting wealth. So who better to change the world — and make money at the same time — than investors?

That’s what Warren Buffett is doing.

The Giving Pledge

In a recent interview with Yahoo! Finance, the Oracle of Omaha said that excessive wealth doesn’t do much for the rich and their families.

Check it out:

There comes a point where money really has no real utility. You can use it to show off, but you can’t do much else with it. I don’t think it’s good for your family. It can do wonders for people around the world.

Back in 2010, Warren Buffett, along with Bill and Melinda Gates, founded the Giving Pledge, which is a commitment by the world’s richest people to give away more than half their money to philanthropic causes.

While I applaud the selfless nature of this pledge, I would argue that this money could be better spent by investing in good causes as opposed to just donating to them. There is a difference, and this difference can be illustrated in the power of socially responsible investing.

The Positive Power of Capitalism

Socially responsible investing still gets a bum rap. But the idea that social responsibility and wealth creation are disconnected is absurd.

Let me explain...

As a socially responsible investor, I invest only in opportunities that can make me a lot of money while doing a lot of good at the same time.

Renewable energy is the perfect example.

Since 2005, I’ve been writing about — and investing in — renewable energy. Solar, wind, geothermal, electric cars — you name it, I’ve profited handsomely. But what makes these investments even more valuable is that the companies in which I invest are helping us clean up the environment.

While some still like to mock such a gesture as a way to showcase their ignorance and arrogance, guys like me are getting rich by investing in clean energy. And I cry all the way to the bank.

Legal cannabis is another example.

We’ve made an absolute fortune in the legal cannabis space, but we’ve also helped the industry become more legitimate. Our investment dollars are funding a movement that will help end the highly destructive (and expensive) war on drugs and allow our men and women in uniform to treat their PTSD symptoms with medication that really works. 

It just doesn’t get any better than that.

Doing well by doing good. It’s a strategy that is both profitable and honorable.

Of course, I realize that my idea of socially responsible investing may not be the same as yours. And that’s fine.

My intention is not to preach. Rather, it is simply to remind fellow capitalists that we can make the world a better place by investing in the long-term solutions to our many problems instead of donating a few bucks here and there to organizations that are merely responding to these problems.

Want to stop worrying about terrorism in the Middle East? Consider investing in transportation solutions that don’t require oil — the very resource that funds nearly all terror in the Middle East.

Tired of the U.S. government spending your hard-earned tax dollars on the war on drugs, which has failed miserably? Invest in the legal cannabis companies that are helping end prohibition.

Tired of watching job creators flee the U.S.? Invest in small, local businesses that allow local economies to thrive.

During this election year, I’ve heard a lot of folks complain about what each side is doing to destroy this country. But my question is what are WE doing to make it better?

I don’t trust the government to change a light bulb, much less make the decisions that can help make the world a safer, more prosperous place. But I do trust the basic fundamentals of free market capitalism and our individual abilities to invest in the types of companies that are actively working to make the world a better, cleaner, and safer place for all of us to live.

To a new way of life and a new generation of wealth...

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Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks and Weekly Score. For more on Jeff, go to his editor's page.

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