This summer I read a 2015 Mother Jones expose of privately run prisons in the United States. Three things I learned: 1. Private prisons may be the worst thing going in America. 2. Private prison stocks are probably included in your retirement fund, like they are in mine. 3. My IRA provider, Vanguard, doesn’t care.
I asked my Facebook friends for help finding the right place to put my IRA (Individual Retirement Account) and got a wave of helpful responses. I came back to those responses a few
weeks months later to see what I could learn and where I could move my money. The thing is, after a couple of days of research, I remained confused. Here’s what I know: I am looking for a passively managed mutual fund in which I can put some retirement money into an IRA without worrying about owning something that is deeply offensive to me.* And passively managed mutual funds includes lots of big uglies (actually a thing), including private prisons.
So, here’s the question: What options are available to young people who want to start a retirement account in line with their principles? Here’s what my friends shared:
- The Justice Department thinks private prisons are terrible, too.
- You can look up what is in your mutual fund using the Securities and Exchange Commission’s EDGAR database.
- OpenInvest and Ethic are two new companies targeting millenial investors. Check out this article from the co-founder of OpenInvest.
- There are a handful of existing do-gooder players, according to this article, including Domini Social Equity, Calvert Mutual Funds, iShares KLD 400 Social Index, Walden Equity, TIAA-CREF Social Choice Equity Fund and Parnassus Fund. There’s also Trillium, though their products are for high net worth individuals, and PAX World Balanced Fund. My reaction? It would probably take me another full day of research to figure out how to compare these against each other.
- Motif lets you build a bespoke portfolio. Too much work for me.
Given all this, and some friendly chats with the folks over at OpenInvest (recommended by Zoe Schlag), I’m thinking about moving my money to OpenInvest.
What am I missing? What do you think?
*It turns out that personal finance is really hard to write about, because lots of people (let’s call us Group A) don’t know anything about this stuff, whereas lots of other people (call them Group B) have well-informed, completely contradictory opinions on what the rest of us should be doing. If you’re in group A:
- If you are old enough to read this, you should probably be saving for your retirement in something like an Individual Retirement Account. If you’re not going to join the financial industry, start a retirement account with a passively managed mutual fund, contribute to it generously every month, and then forget about it until 40 years from now.
If you’re in group B:
- Totally open to alternate suggestions here, given that you people know a lot more than I do about this stuff. Here are my criteria:
- I think I’m pretty risk tolerant, but who knows.
- I would like to spend zero time thinking about investing. I don’t think it’s fun. I’m not trying to beat the market or learn about puke points and ankle biters and dead cat bounces.
- I’d eventually like to own some land someday, because: