There is this concept in investing called Socially Responsible Investing (SRI). According to Wikipedia:
SRI investors seek to align their personal values and financial goals by choosing to invest in companies and organizations displaying values comparable to their own.
Whatever. The goal of investing is to earn the highest possible return and then spend your gains in line with your own values. In other words, how you spend your gains is more important than how you earn them.
I value eating a healthy diet. Last year I bought and sold McDonalds stock and earned $200 on a quick trade. Now I don’t eat at McDonalds, yet I was able to take the $200 and buy healthy food for myself. The beauty of Socially Irresponsible Investing (SII) is that I’m taking cash, in the form of a dividend, from the consumers of irresponsible products and services.
I’ve mentioned in the past that I love high gas prices. It’s one thing to save money by driving a fuel efficient car, but Socially Irresponsible Investing allows me to profit when other consumers don’t share my values. In other words, drive a Hummer so I can drive for free.
I’m also heavily invested in MO (Altria). This company is better known as Philip Morris. Even though I’ve never smoked a single cigarette, I just love pocketing the 4.4% dividend this company throws at me each quarter. Second-hand smoke used to bother me, not anymore. Smoke up and destroy your health, so I can spend your vice money when I retire.
The SRI crowd could poke at me for investing in McDonalds and Altria as endorsing products that increase health care costs. It’s true that 75% of all health care costs are associated with preventable diseases. So why not make some money there as well? As a non-smoker that eats a healthy diet and exercises, my biggest investment is in UNH (UnitedHealth Group). Even though I hopefully won’t be a big lifetime customer of healthcare products, I’d like UNH to go in there and liberate some of that money and send it in my direction.
I could go on and on with examples. Maybe I should buy into a casino? As someone who has never gambled or even bought a lottery ticket, wouldn’t that be the perfect SII investment?