HIP Investor Presents:
How to Invest for Income and Impact
Capitalism used to be easy. Discover, acquire, and defend a unique resource. Pay people the least you can get away with. Off-load as many liabilities and risks to government as possible. And, of course, collect the profits in as short a time as possible. These captains of industry used to be called “robber barons”; today they are simply called “capitalists.”
The super-majority, about 7 in 8 dollars, of assets managed focus on a purely capitalist approach, which typically prioritizes short-term financial gain. However, this traditional approach has accelerated the number and intensity of societal problems.
To counter that, investors have allocated about 1 in 8 dollars managed to “socially responsible” investing -- typically excluding “bad” companies from their portfolios. This has relieved some consciences, but in many cases the majority of these funds have failed to beat the typical benchmark. (Most mutual funds of the capitalist approach don’t beat their benchmark either.)
Now, there is a new investment approach - one that seeks bigger profits that capitalists pursue while building a better world that do-gooders desire. The goal is to generate human impact and profit, or “HIP,” simultaneously. On the pages below are excepts from Paul Herman's book, The HIP Investor, which we hope will shed some light on this new way of thinking about investments - to mitigate risk, targeting higher profits and income yield, while also seeking net positive impact on nature and society.