Jacqueline Barton

Many investors want to know that their investments are making a positive impact on our world and its inhabitants.

Socially responsible investment or ethical investing fits this bill with investors asking the hard questions about how profits are being made. Companies that make their millions through environmentally destructive behaviour or are socially irresponsible may find it harder to raise money when going public.

What is “ethical”?

Of course, “ethical” is a subjective term. For example, an ethical fund manager could define tobacco and gambling as unethical yet consider alcohol to be okay. Another ethical fund could be reluctant to invest in banks because they lend to companies that damage the environment. We are seeing this affect lenders that fund coal mining for example.

Obviously the important issue is what you, the investor, considers ethical. If you are contemplating an ethical investment then not only will you need to understand the financials of the potential investment but also ensure that the underlying businesses and their activities meet your standards.

Whilst it is difficult to lay down an exact formula for ethical investments, there are some basic values which many people share:

• Avoid causing illness, disease, or death;
• Avoid destroying or damaging the environment;
• Avoid treating people with disrespect.

In Australia, many well-recognised investment names are on the list of ethical fund providers. Although some ethical funds have achieved good results, as with any share-based investment, the focus is on long-term investing and sound management capabilities of the fund manager.

What about the risk?

Be aware that when the range of stocks available to fund managers is reduced because of ethical considerations, extra risk and volatility could occur.

If you are interested in learning more about ethical investing, contact us. Have some questions? Want to know how it applies to you? Want a review of your personal situation? Click here to book a Free 15 Minute Discovery Session, give us a call on 1800 577 336, or email us at hello@wealtheon.com.au.

Are you taking care of elderly parents? Do you still have adult children living at home? Do the words ‘meat’ and ‘sandwich’ strike any chords with you? You could be a member of the “Sandwich Generation” without realising it!

Sandwich Generation refers to people who are ‘sandwiched’ between caring for elderly parents and adult children still living in the family home.

As a society we are living longer but unfortunately longevity comes at a cost.

It’s not uncommon for older people to become the primary carer for elderly parents. Caring for someone is difficult emotionally, but can also affect the household finances as work hours are reduced or careers cut short to accommodate carer responsibilities.

At the other end of the spectrum, adult children pursuing higher education are continuing to live in the family home longer than previous generations as the costs associated with moving out prohibit them from achieving their independence.

Additional financial pressures

People with elderly parents and adult children all living in the one home, often find themselves in unexpected financial trouble. At a life stage when most are planning to downsize their homes, the Sandwich Generation is forced to consider other options such as renovating to increase space or provide more privacy. No longer are “Granny flats” inhabited by older family members; now it’s the kids who have taken over these coveted domains.

Of the three generations potentially living under these arrangements, only one is usually in the position to pay for expansions, yet the retirement strategies of these people hadn’t anticipated issues such as late-life mortgages.

For those already in this situation, a range of government services is available. Contact My Aged Care on 1800 200 422 or visit www.myagedcare.gov.au

Looking ahead

At Wealtheon we are helping a growing number of clients create strategies for managing these future financial pressures. Already highlighted is a current lack of trauma and disability insurance. This will provide a lump sum to cover costs if a critical illness is brought on by the extra stress of these situations, placing the in-between generation in a better position to manage this phase financially and emotionally.

Other strategies to start considering now include:

• dollar cost averaging to grow savings,
• increasing superannuation contributions,
• nominating superannuation beneficiaries,
• establishing Powers of Attorney and maintaining Wills.

We can discuss these and other individual strategies with you to determine the most appropriate for your current situation and your future needs.

As housing costs increase and we continue to live longer, the pressures of multi-generational accommodation will affect today’s younger generations, tomorrow.

The key to achieving financial security is planning. Contact us about the right strategy for you; it’s never too early, and it’s certainly never too late either.

Have some questions? Want to know how it applies to you? Want a review of your personal situation? Click here to book a Free 15 Minute Discovery Session, give us a call on 1800 577 336, or email us at hello@wealtheon.com.au.