More Money Podcast - 251 Advancements in Responsible Investing - Tim Nash, Sustainable Investing Expert & Founder of Good Investing

Episode Date: November 4, 2020

I can’t believe it’s been almost 3 years to the day since I last had Tim Nash, a sustainable investing expert and founder of Good Investing, on the show! You may remember Tim from episode 129 because not only does he know his stuff, but he was the first guest I had on to talk about responsible investing. Since then, a lot has happened! Notably, Tim Nash became a Certified Financial Planner (CFP®) and founded his investment coaching company. He also has been featured in the media regularly to discuss the changes in the sustainable investing landscape. But in terms of the financial industry, more and more companies are developing ETFs and mutual funds that follow ESG criteria (ESG standing for environmental, social, and governance). This is good news because sustainable investing is becoming less of a niche and more the norm. And as I’ve learned over the years, it is critical that we all become more mindful of what companies we invest in for our futures. For full episode show notes visit https://jessicamoorhouse.com/251 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome back to the Mo Money Podcast. This is episode 251, and I am your host, Jessica Morehouse. Welcome back to the show, guys. We're talking investing for this episode. So I hope, and this is a longer episode because I have a guest who's been on the show before, and he hasn't been on the show for three years, and we had a lot to talk about. A lot of things have been happening in the world of investing. But specifically, we talk about responsible investing, green investing, sustainable investing, whatever you want to call it. That's what we're talking about. So I have got Tim Nash back on the show. You may remember him

from episode 129 that aired November 15th, 2017. Oh my gosh, almost like three years to the day. That's kind of crazy. And he was on the show to talk about sustainable investing because I'd never had a guest on the show at that point on to talk about it. And honestly, it was very, very new. I had recently, I think at that point, gotten to know Tim because he invited me to the sustainable investing Investing Fair. It was a little event where there's a bunch of booths, different companies that offer sustainable investing. It was honestly the first kind of, I think, introduction to this type of investing I had before. And that was three years ago.

And so much has changed. As you know, there's so many more sustainable products out there. ETFs, robo advisors are now offering portfolios specifically tailored to responsible investing. A lot of good changes have been happening in the past three years. And so we get to talk about all of it. So I'm so excited for this episode. In case you did not listen to that episode 129, if you want to go back and listen to it, Tim Nash is the founder of Good Investing, an investment planning firm with a focus on sustainable investing, obviously. And Tim's blog, The Sustainable Economist, which I kind of

mentioned in the show that was trying to move everything to good investing, but anyways, it still exists. So check it out. The Sustainable Economist is what it's called. It has inspired thousands of Canadians to invest according to their values with model portfolios to reflect different definitions of sustainable investing. And Tim also writes a bi-weekly column for the Toronto Star and is regularly featured in publications such as CBC's The National, BNN Bloomberg's Market Call, and The Globe and Mail. And you can find him at goodinvesting.com. But yeah, we're going to talk about investing sustainably. You're going to love it. So just before I get to that interview with

Tim, here's just a few words about this episode's sponsor. This episode of the Mo Money Podcast is supported by TD Direct Investing. Investing just got a whole lot easier. Remember about a year ago, I did a blog post and made a video about TD Direct Investing's new feature in WebBroker called Goal Assist? Well, that same feature is now called Goals, and they've reimagined Goal Assist to become a standalone investing app that is now available to download on iOS and Android. If you're looking for a new, simplified way to invest and want to save on fees, you'll want to check out TD Goal Assist. It not only guides you through building a goals-based investment plan, it allows you to build a diversified investment portfolio aligned with your goals using TD ETFs, stocks, or TD

one-click ETF portfolios. The best part? There are no balance minimums, monthly fees, or inactivity fees. And you know what that means, more money in your pocket. And when you trade TD ETFs, there are zero commissions on trades. That means the only fees you'll be paying are the MERS embedded in the ETFs themselves. Want to learn more? Visit the show notes for this episode or go to jessicamorehouse.com slash goal assist. Or try it out yourself by downloading the TD Goal Assist app via the App Store or Google Play. TD Goal Assist is a service of TD Direct Investing. A division of TD Waterhouse Canada Inc. is subsidiary of the Toronto Dominion Bank.

Welcome to the Mo Money Podcast, Tim. I'm so excited to have you back because you were on the show, which is insane, almost three years ago, November 2017, episode 129. I've had like another hundred episodes since then. Well, I feel like I've aged, won't say 100 years but certainly over 100 months since 2017 oh I feel like I was it's so funny and this is why I love the podcast um because I feel like I also grow up with it and so when I think back my gosh I really was a newbie when it came to learning about sustainable investing um back when I started talking to you. And I feel like I know so much more. I've done so much more research and just so much has evolved

in the space which we're going to get to in this episode. So I'm so excited. But I know one of the things we chatted about in that episode three years ago was you, of course, have your blog, The Sustainable Economist, but you're shifting, creating this new business brand under good investing. And you were just starting that, I think, when we were chatting. And that was three years ago. So give me an update. How are things?

It's working. It's working. Oh, good. Branding and good branding is actually really valuable. I created my Sustainable Economist blog. I'm going to say it was like 2012 when I was still very much searching. I didn't fully know, you know, what I was going to be doing, the exact value that I was offering to people. At that time, I was more interested on the bigger picture side of things. So more like macro economics and the green economy and stuff like that. I was teaching economics at Sheridan

College at that time. So kind of calling myself the sustainable economist was sort of a nice fit for the blog. And since then, you know, it's really been this journey of identifying my specific passion and niche, which is very much on the investment side of the equation. And that realizing all of the blockages that people have when it comes to investing their own money, whether it's psychological blocks and these emotional things, whether it's the knowledge blocks and just the acronyms and the terms and everything is just so opaque and confusing.

And then also very much the practical side of things in terms of, you know, how much should I put in to stocks versus bonds versus, you know, these other things. So, you know, really what I've learned over that time is that people need help when it comes to figuring out their own investments, just investments in general, let alone this idea of ethical or sustainable investing, which, you know, does complicate things a little bit further. It muddies it up a little bit. So, you know, Good Investing is really a fee for service financial planning company that lets me help people with whatever challenges they're facing and takes, you know, I like to joke that my clients are often hippies and social justice activists that know nothing about finance and

investing and get them all the way through to the point where they have a portfolio that aligns with their values, that they're actually confident managing that themselves. So I'm actually in the process of letting my old blog die. I went through my old blogs and I was like, okay, which ones deserve to be saved and which ones need a new polish? And I'm going to move everything over to this goodinvesting.com sort of brand and really looking to keep growing that business of really helping people. And whether it's one-on-one or I might explore an online course or something like that in the next little bit, but really just helping people figure this stuff out and then hold their hand as they actually make the investments. They actually open the accounts, put money in

and make the trades for the first time, which can be really scary. And that way, hopefully more people will be able to invest according to their values. I want to kind of get into it because you mentioned, so you're an investment coach. There's so many titles out there. And that's one of the things that irritates me because people get confused. They don't know what means what, who does what. And before I hit the record button, you also mentioned you are now a CFP. So that's different since you were on the show previously. So that's very exciting.

Do you want to kind of share what does an investment coach mean? What do you specifically do? So it kind of sounds like you're not managing someone's portfolio. You're getting them to do that themselves. Absolutely. So, you know, and I think it's important for people to understand the regulations here in Ontario. And it is Canada wide, but it's governed by province. So, you know, I'm here in Ontario. So I, you know, have to understand the regulations from the Ontario Securities Commission. And so that if someone is listed as an advisor, that means that they are licensed to sell products. And all too often, in my experience, advisors are actually salespeople.

That the way they get paid is through commissions. They get a cut of your money. They sell you a fund. And then they take a cut of your money every year as long as you you stay invested there. So, you know, to me, I really didn't like that model. So instead, you know, I, I looked for models that were more flexible, that were didn't mean that I had to follow sort of all the rules by the Ontario Securities Commission, so that I could talk about things like community bonds and impact bonds, which, you know, I get really excited about. And so what I landed on is this idea of a fee for service

financial planner, which means that I get paid by the hour. So I don't take any commissions or sales charges or, you know, trailing trailer fees, any of that stuff. Instead, I get paid directly by my client. Now, what that means is that legally, I'm not allowed to provide specific advice or recommendations. So I'm not allowed to say, Jessica, you should buy this company or ETF. I am allowed to provide general advice and recommendations. So I can say, you know, come on your podcast and talk about these things. Or I can go on BNN or I can write articles and mention actual products. But I'm not saying you, Jessica, buy this. So what this means is when I'm working with a client one-on-one,

it is much more of education and empowerment that I'm not selling you. I'm not telling you what to do. Instead, I'm always going to show clients a range of options, help them understand the differences between them, which is really important when it comes to this ethical component, because everyone has a totally different idea of what that means. And then really empower clients to choose the funds that make the most sense for them, both financially and from an ethical and a financial perspective. From there, you know, as a financial planner, I can provide this guidance around things like

asset allocation. So stocks versus bonds are like the different sort of percentages of your pie chart. I can help with things like tax optimization. So RRSP and TFSA, I can help people, you know, figure out how much they should have for their emergency fund, you know, and do that math, but I'm never going to do it for them. They're never going to transfer money to me. I'm never going to touch their money at all. Really, it is on them to be able to do it. But what I'm doing, and I do like the term coach, because I think that is a more apt description than fee-for-service financial planner,, I'm helping people understand and figure this out. And you know,

when it comes to investing, you could, if you've got hours to spend on Google and Reddit, you know, you can figure this stuff out. It's not that hard, but who has hours to spend, you know,

for most people, they just, they don't want to spend that time. And as great as Reddit is, do you really want to get your advice from people on Reddit who you, they're faceless people you don't know, you know? So this is it. And so that's why I can just kind of like hit fast forward on all that stuff. And it's just like, okay, you know, basically, you know, really narrow it down, keep it simple. What do you need to know? And it really

builds on, I think my, my expertise. Like my grandma always told me I was a really good teacher. You know, when I started teaching economics, she was like, oh, great, finally, you figured out your vocation. And, you know, and for me, really, I'm just taking that same energy and attitude that I taught teaching economics to first year college students, and but doing it on a one on one so that we can really customize it for individuals. And, you know, and really let people make the decisions that feel right to them. Do you ever recommend using a robo-advisor that offers a portfolio that is sustainable? Yeah. So when it comes to the robo-advisors, you know, really it's, it's one thing I've had to learn, Jessica, is, is over my years. So wearing my

economist hat, I'm all about optimization. And what I've had to realize is that for a lot of people, they're not focused on optimization. Really simplicity can be like a beautiful thing for a lot of people. So there is kind of this trade-off between optimization versus simplicity. And so robo-advisors for me, they're not optimal. You know, you're paying the robot to do something that you can very easily learn to do yourself. That said, they're very simple. It's really easy. These automatic contributions and the automation, you know, can really be a good option

for a lot of people who frankly can't be bothered thinking about this stuff. So most of the robo-advisor portfolios, there are a number of these socially responsible ones that are out there. Most of them focus on what I call a doing less evil approach, where they're going to avoid certain

things. And that, you know, was exciting for me earlier this year, Wealthsimple came out with a new sort of new and improved socially responsible portfolio. It was, you know, one of my most popular blogs was the one I wrote in 2006, kind of ripping their old one apart, that their old portfolio just wasn't good, frankly. And I think a lot of people found my blog and were like, hey, you know, WTF, why are, you know, gun companies in here? Why are, you know, oil companies in here? And so they were under a lot of pressure to improve it. There weren't a lot of new ETFs, you know, that allowed them to. So they actually ended up creating their own ETFs, which, you know, power to them, they decided to just build their own. And what they came out with was a really cool option. So, you know,

it's going to be really good in terms of getting rid of fossil fuels and getting rid of, you know, a lot of the sort of major controversies or quote unquote sin stocks. But there is, there's no real room in that for the doing more good. That if you want exposure to renewable energy or water infrastructure or things like that, you know, that's just not what they do. So, you want exposure to renewable energy or water infrastructure or things like that, you know, that's just not what they do. So, you know, to me, again, it can be a really good option for people who just want to set it and forget it. And especially if you're just starting off, you know, that it can be sort of the easiest way to get started. But certainly a lot of my clients, the reason they're coming to me, certainly they do want to avoid a lot of the sort of nastier companies.

But part of it is they do want to actually align it and, you know, invest in things that they believe in, you know. And when you look at a stock like Tesla that has just done incredibly well, and don't ask me to justify, you know, the price and where it is right now, because it's, you know, it's done. But it's done so remarkably well that it does really signal a shift that's happening in the broader economy that I think the market now realizes that electric cars are the future and are pricing it accordingly. And so, you know, now if there are other trends, other things that you really believe in that you feel are that sort of future part of that new economy, then, you know, it might make sense to carve out part of your portfolio. I'm not saying put all your money in Tesla, right.

But to be very deliberate and carve out a small little part of your portfolio for these doing more good options, which, you know, the robo advisors, that's just not what they're designed for. Yeah. Yeah.

It's, it's, it's, there's, there's good and bad things about robo advisors. There's less flexibility. And, but, you know, then the big benefit is you can set it and forget it kind of thing. But yeah, like you have less options.

You can't customize it as you could if you're a DIY investor. And that's kind of something to think about. It is a bit what I call a cookie cutter portfolio. And when it comes to these, you know, responsible investments, sustainable investments that, you know, it's just, it's so hard to have a one size fits all because you come up with approach and, you know, for one person, that's not going to go far enough. And for two other people, they're going to say that goes way too far for me. So, you know, really in this space, I think it is important for people to really understand where they are on that spectrum and to understand what's important to them.

And so, you know, it's just, to me, it does defeat the purpose a little bit. I'm really glad they're there. And I think it's a good option for some people, but I think certainly for most of my clients, you know, they would look at it and say, you know, either it doesn't go far enough or it's just not really what I want. Have you seen a big change in terms of product offerings like mutual funds, ETFs? Are there more around now than three years ago? Oh my goodness. It's exploding. Oh, good. So really what we're seeing is more ETFs than mutual funds. There are a few more mutual funds. Desjardins has done a really good job. I think it's branded their Societare sort of brand of mutual funds. And so they've now got clean tech

and global environment. And I think they've got a positive impact one aligned to the sustainable development goals, which is super cool. But really, it is in the ETF space that, you know, when I started my blog, Sustainable Economist, there were no fossil fuel-free ETFs. I had to craft together my own first fossil fuel portfolio using 15 different sector ETFs or whatever. It was definitely a pain. Now, iShares has fossil fuel-free ETFs. BMO came out with a lineup.

They're not fossil fuel-free, but they are ESG leaders, environmental social governance, so companies with sort of the top scores there. Dejaudain has a lineup of responsible investment ETFs. Horizons has a global sustainability leaders that I call the squeaky clean ETF. So there are just so many more options. These are all options that I've listed that are in Canadian dollars, let alone all the ETFs that are in US dollars. Vanguard has some now, and iShares has a bunch in the US, State Street, all the major players. Really, it's getting to the point where if you don't have a socially responsible option, you are getting left behind. That said, the demand, you know, in the US is growing.

But here in Canada, it's really kind of been disappointing that when I look at the assets under management, for a lot of these ETFs, there are the supplies there, there are a lot of ETFs, the demand hasn't quite caught up with it yet. That, you know, it's just not, they're not as popular. I'll give you an example that that Horizons Sustainability Leaders ETF, you know, it's just not, they're not as popular. I'll give you an example that, that Horizons Sustainability Leaders ETF, you know, here it's got, I think the last time I looked at it, it's about 30 million under management, which is like not bad, but it's not great. ETFs typically break even and become profitable at about a hundred million. So it's got a way to go. I looked at the same ETF is in Australia and it's got over $400 million in it. And it's the same.

So I don't know what's going on in Australia, whether, you know, that one has been chosen for whatever reason, but it just tells me that I think Canada is a little bit behind. I think there's a lot of interest here. All the surveys, you know, the Responsible Investment Association, which is sort of the national network here for responsible investors. surveys, you know, the Responsible Investment Association, which is sort of the national network here for responsible investors. They did a survey last year, and they said that 72% of Canadians expressed interest in it. But only 26% of people are actually doing it. Why do you think that is? Do you think it's because depending on how people invest,

if they're using a robo-advisor, then you're restricted to the portfolios offered by that robo-advisor. And if you're working with an advisor who's managing your portfolio for you, they may not recommend that and you may not think to ask about it? So I think the advisor channel here in Canada is a huge barrier. That I think of a lot of advisors, they just, they're not informed. And as a result, they don't want to talk about it, that it's almost like it scares them. And they think if they open up a can, you know, can of worms here, well, okay, we do this. Well, what about this and that and the other. And honestly, if I'm real with you, that I think there is some political leanings here that, you know, the type of person that wants a socially responsible investment is probably a little

more progressive. And think about, I don't know your experience, Jessica, but my experience in with people who self-select to work in the financial industry tend to be a bit more conservative. Yeah. Yeah. So they're a little bit behind on, you know, some of these issues. It hasn't reached that kind of tipping point of just like, oh, yeah. Well, even just like the ETFs in general, I feel like five years ago, not many people were talking about it as much as they are now. It was just mutual funds. That's all an advisor would talk about. Now they're actually talking about different types of products like inexpensive ETFs. And so maybe it's going to take another five to 10 years. It's going to take some time. It takes some time. I think that's it. And you know, and one thing I've been fighting against my entire career is this, this myth that responsible investments underperform. And I think that myth is really strong with traditional advisors. If they haven't been following it, if they haven't been looking at it, you know, again, most responsible investments have outperformed over the last five years. So and especially like, think about how poorly oil stocks have been doing.

And now and it could be I don't have the crystal ball. So I don't want to promise that, you know, responsible investment is going to continue to outperform. But, you know, really, it has over the last little bit. And during Coronavirus during 2020, it's actually done quite a bit better in this recovery, which is interesting. Because in 2008, 2009, that crash, you know, that happened right as I graduated from my master's program and wanted to work in this field. Nobody cared about sustainability then. Like it really got shoved to the back burner. Nobody cared about it. It's like got shoved to the back burner nobody cared about it it's like no no no we need to fix the economy first whereas this time i'm hearing

so many calls to sort of build back better that income inequality and climate change specifically need to be addressed as we recover from this economy yeah Yeah, we can't improve the economy without those considerations anymore. Like it just doesn't make sense. They're all in this. And so, you know, so really, if we look at where we are now and the progress over the last five years,

and certainly if we look at the direction that we're headed, you know, over the next five, 10, 20 years, you know, I really think that sustainability is going to be a core economic issue. That said, there is still this myth, you know, even though all the data is against it, but so many people still think you need to sacrifice returns. And I think that it really, I've said from the get-go that it's really not a financial barrier to this. It really is a psychological barrier

to responsible investments going mainstream. And so what's fun for me is like seeing all these bigger institutions kind of clue in, they're now offering that the supply is there. So the options are there. My hope is what you said is true that just like, you know, they're just a little slower, but that, you know, we will start to see more and more advisors recommending these and, you know, at least creating space for these conversations to actually, you know, I think if people were asked like, hey, are you interested in responsible investing? And oh, by the way, you actually don't have to sacrifice returns. You know, I think a lot of people would opt for that.

I think it's just still this sort of psychological barrier that based on how most Canadians are buying their investments, that those options are usually aren't being put in front of them. And that if they do bring it up, if they do sort of, you know, okay, I'm going to ask my advisor about this, you know, still too often, I get these horror stories from advisors that just don't want to go there at all and get defensive and almost like talk down to you for asking those things. So it's less common. I think the awareness is growing, but I would still say that that's probably one of the biggest reasons why retail investors haven't fully embraced this movement. Another kind of thing that i've kind of seen is the the misconception that

when you're investing in a fund that is um you know sustainable or green it's that you are fitting into a weird stereotype like oh so you're just uh you know investing in like windmills and crap like that and it's like well from the research i've done that is not i mean you might be but that's not it i think a lot of people think it's just like for granola hippies that are just want to, you know, that are totally against capitalism at all. It's like, well, we all want to make money. So no, that's not what's happening. And I think that's really important to understand this distinction between, you know, what I

call sort of doing less evil, which is, you know, socially responsible, which is ESG, this environmental social governance. You know, it's really getting rid of the worst sort of corporate citizens, the worst companies, versus this idea of doing more good, or it's often called thematic investing, where, yeah, we can invest in wind turbines. Vestas has done really well for me. Largest wind turbine manufacturer in the world has made good money over the last little bit. And, you know, I think that it does have bright prospects going forward. But again, you wouldn't want to put all of your money in those things

that, you know, that I think for a lot of people, they're sort of afraid to move in this direction. And so no, you can absolutely sort of take a small step in the right direction, dip your toe in the water. That said, also part of what I want to caution people is that if, you know, you are an environmentalist or a social justice activist, don't jump in, you know, head first without knowing how deep the water is, right? That really, you do want to be very deliberate about these things that, you know, that you want to carve out part of your portfolio for those more thematic or doing more good options, you know, I would never suggest someone go all in on those because they do tend to be riskier.

Yeah. And also, and I've had lots of conversations with people in the space too. It's like, just because you want to be, you know, a more responsible investor doesn't mean that you're going to throw out the whole idea of diversification. You know, like you still need to be a diversified investor if you want to be a smart investor. So why would you think that you're only going to be investing in like five different sectors or five different companies or whatever the case is? Like you still want to make sure you're not putting all your eggs in one basket. Absolutely. And to me, diversification is a core value for both from a financial perspective, but also from an ecological like resilience perspective, you know, that really that that

bio diversification is a really important thing. So you know, what we're doing here, I often use the term sort of creativity within constraints. So what we're doing is we're sort of putting some constraints around the portfolio, you know, things that are just hands off, off limits, okay, you don't want tobacco, you don't want whatever it is, weapons, you know, you don't want guns, private prisons is a thing that's popping up quite a bit where, you know, just with everything happening in the US, people just don't want to own shares in companies that own private prisons. That's perfectly understandable. You know, our job is to be, get those investors as

diversified as possible, given those constraints that inevitably with responsible investing, you are going to be less diversified. That is kind of the definition here, right? And so the trick is, is, you know, how far down that rabbit hole do you want to go? That the sort of squeaky or clean your portfolio becomes, by definition, the less diversified you are. And the more creative I need to be as a financial planner to find solutions and to like play with asset allocations to make sure that, you know, you're not all the way invested in a handful of sectors. I'm curious, what has your experience been working with clients building these portfolios for them? Because you've been doing this for a number of years now. What has their experience been? Has it been positive? And especially comparing it to

previous portfolios they were probably in that weren't responsible. They're like, oh, this is actually not as bad. Lots of those myths are out the window. And this is a great way to invest for me. Absolutely. So, you know, I do have some model portfolios. Right now they're up on my blog, sustainableeconomist.com. But, you know, I am going to be moving them over to my good investment site. I need my designer to make them nice and pretty, build some pretty pie charts for me. But all my model portfolios have outperformed sort of a standard

couch potato portfolio over the last little bit. And, you know, we're, you know, I think I looked at it in sort of mid-August is when I last did the numbers on them. And my squeaky clean portfolio was kind of kicking the crap out of everything. Now, part of it is that it does have a higher allocation to Tesla and Tesla has just been over the top ridiculous. So, you know, I don't that that would be sort of part of it. But also, again, I think that there is this movement towards companies. You know, we've moved away from commodities, things like mining and energy, oil and gas, and we've moved much more towards technology and healthcare. And, you know, and at

the same time, I think due to COVID, we've also sort of moved down Maslow's hierarchy of needs. I don't know if you're familiar with that concept, but the idea is that, you know, it starts with the basic necessities. And then we kind of, you know, as we have more privilege and more time on our hands, we can start to have other priorities. And that obviously with COVID, you know, all of a sudden there was a huge boom in toilet paper when COVID hit, right? Which is like the staple of staples. So again, when it comes to these, you know, some of these thematic funds around the UN

Sustainable Development Goals, when it comes to these that are providing more of those basic fundamental needs, you know, I think that there's, when it comes to these, that are providing more of those basic fundamental needs. You know, I think that there's, and then, you know, responsible investment funds do kind of by luck, do tend to be heavier tilted towards tech. And that tech has also done phenomenally well. So again, I don't want to promise

that this is going to keep happening, right? Because we've been, 2020 has been such a bizarro year, but it's been really nice for me with my clients that the ones that did opt for like the squeaky clean portfolio, like the most sustainable options, have really done the best. So, I mean, it'll be interesting to see going forward whether these trends continue, you know, really tracking things for me on the macro side that, you know, we have a new finance minister in Chrystia Freeland, and they've signaled that, you know, maybe a universal basic income or something like that, maybe a green economic recovery. In the US, I don't like I'm so nervous about the election. I'm so like, I just want to

get through it. But like if I just knock on woods if I can like just you know if Joe Biden does win then you know he's signaled a two trillion dollar green stimulus plan the euro region regardless of any of the election or politics has signaled

I think like a 750 billion dollar green stimulus plan so there's no doubt in my mind that governments are moving in this direction now. And so to me, it's really sort of now's the time that, you know, that obviously the best time to have done this would have been a few years ago. You know, but I do really want to encourage people that like, you know, if you've been thinking about making a shift like this, something like divestment from fossil fuels. In 2015, when I started talking about this, before the first oil crash, and then now we've had another oil crash.

But I would say to some degree, the writing's on the wall that Exxon just got kicked out of the Dow Jones Industrial Average. And, you know, really energy as a percentage of the global stock market is, you know, really small and continues to dwindle. So, you know, to me, there is this massive economic shift that's happening. And I think that explains, you know, both the sort of psychological shift that's happening, but also, frankly, the, you know, that the money is starting to flow in this direction. Not so much in Canada. We're a little bit behind. But in the US, they just had inflows like it was pretty remarkable. I looked at the data from Morningstar and it was like around three to four billion going into these funds sort of every year.

And then all of a sudden, 2019, it was 20 billion. Like it just like shot up. And then the first quarter of 2020, it's already 20 billion. Wow. Yeah. And that's during COVID. Yeah, exactly. So, you know, in the U.S., like there's, there is this huge, massive shift. I think, you know, the analogy I use is that the tidal wave is coming. I've told people the tidal wave is coming for a while. I think some people thought I was a little out to lunch there. But now you can very much see the tidal wave, at least in the rest of the world. And that, you know, I think investors that do have a long term horizon, you know, really need to look at these issues. And if, you know, if you're ignoring these

issues, you could be missing out. I think one thing too, when, you know, because we're talking very big picture stuff. And I think what I always like to bring it back to, especially for people just like kind of still getting their feet wet when it comes to this is the idea that we need to be more intentional of where our money is going and who we're supporting. I think so many of us investors learn about what to invest in and all these different things, but we probably forget about why are we investing and who are we investing with? I'll say when I first started investing, I didn't even think about the companies I was actually investing in.

I didn't even know where to find that information. And so I think in this day and age, it is all like transparency and intentionality is becoming so much more important all of our lives. This is a great time to just reflect and take a look at what you're investing in and see, does this make me feel good? I talk about that when it comes to spending all the time. Spend within your value system. We need to invest within our value system too and see what's going on. And take a good look at what are the eight companies actually in the funds that you're investing in. So many people I work with, they've never even thought to do that

because that's not talked about a lot. They talk about funds and fees and returns rarely. What kind of companies are in there? Does that make you feel good? And it is more transparent, especially with ETFs, mutual funds. It can be a bit like, I joke, I have to be Indiana Jones to go through and get the full list of holdings that you have to go through these annual and semi-annual reports. And then it's like a snapshot, but ETFs are generally very transparent that with like two or three clicks, I can get a full list of all the holdings. And it's a really good exercise. This is what I do with clients as we go through those sort of do it, must evil options is we look at the companies inside and we understand what's in

there and people absolutely have emotional reactions to certain companies. And we understand what's in there. And people absolutely have emotional reactions to certain companies. And for everyone, it's different. And I can never predict it. Like, it's really, this is one of the things that keeps me going is that, you know, it really is so much fun when, you know, people will just and you know, whether it's Nestle, or Walmart, or Philip Morris, or Exxon, or, you know, I could go through And, and that, you know, and, but also part of it is that people don't always know what companies they need to avoid that, you know, you might not know that Philip Morris is tobacco or that Lockheed Martin is military weapons. Right. So there are some really cool tools now, you know, from MSCI has these like ESG ratings on companies and for ETFs,

as well Morningstar, they just bought a company called Sustainalytics. So it is kind of next a little bit next level, you know, but if for people that do want to dig in, we can start to do things like measure the carbon footprint of different funds. Is there a tool out there where you can, and I feel like I may have found one, but I'm not sure if I found one for Canada. So you probably know if there exists something where you can take your fund, whether it's an ETF or mutual fund, plug it into this thing, and it'll tell you what the evil guys are in there. Is there something like that out there for people? So the Canadian one's not specifically in terms of the, it won't tell you the names of the companies. But really, we do have Morningstar. And Morningstar does have a database that includes all Canadian ETFs and

mutual funds. And if you click on the little like portfolio tab, once you've looked it up, then you should be able to scroll down and you can get the overall ESG score, which is kind of like, okay, from an environmental social governance perspective. And then you can also get the carbon score, the carbon risk score and the carbon footprint. So it's not going to flag, I think I know the tool you're talking about for the US funds. There's a nonprofit called As You Sow, and they've got sort of fossil fuel-free funds, and now there's like prison-free funds and weapons-free funds and tobacco-free funds, where it really will like point out and show you the specific holdings. We don't have that for Canadian. I keep kind of like hoping for that. This is some of the work that I do with my clients

is that we'll look at ETFs that have a very specific methodology to exclude those things they want to get rid of. And then from there, you know, we can use Morningstar.ca to be able to look them up and get, I would say, some of those broader risk metrics. Okay. Well, that's helpful. That's good to know. I think that's a little homework for anyone listening. Take a look at what you're investing in. Go on Morningstar and check out its rating. I feel like so many people probably didn't even know you could do that. So I think that's so helpful for them to know. Absolutely. Absolutely. There's more information than there's ever been. It's easier than it's ever been with all these ETFs. It's cheaper than it's ever been. One of the huge knocks against responsible investing for a long time has been that the

fees are so much higher. Yeah. And they do tend to be a little bit. But they're not so much happier. They're just a tiny bit higher. But there are ETFs now from iShares. It's like 0.2% in that ballpark that are just so cheap. So it's never been easier.

It's never been cheaper. And there's never been more information to be able to make these types of intentional decisions. And, you know, I am here if people get stuck, if people have questions, you know, people can find me in a number of different ways. And, you know, I love answering questions and, you know, helping people sort through this stuff. Well, I know you also have a YouTube channel and you've been doing a lot of throughout the past several months, like, are they live? Yeah, they're YouTube lives, right? Yeah, I do. I do. I've been doing YouTube lives. I started doing it right when the crash happened when COVID hit. And people were freaking out. Oh, yeah, they were. Right? Like there was we were in a panic. People were thinking this is this is it. This is the end

of times. I'm like, it never is. And like we were full-on talking about huge crash and you know depression and all like we just didn't know so you know I started doing that YouTube live really just as a response to people being so freaked out and uh and started doing it weekly I've since sort of slowed it down since then just because you know there isn't the urgency um but absolutely I've been having a lot of fun with with YouTube and really kind of engaging and letting people just ask questions and creating a format. And people can email me questions and I'll address them on the show or, you know, they can be in the chat and, you know, engage with me live, which for me is the sort of the most fun part of it. But, you know, it's really been cool. And I do find that people just have so many questions when it comes to these things. And you're one of the

few people who has the answers. You're still the only person I know who I can really talk to, besides someone who works at a brand or organization that has something to do with building these funds. I don't know if there's an independent person quite like yourself that knows as much as you know about this space. So that's why. I really am a giant nerd, Jessica. This is for better or for worse. This is my passion.

This is what I really love doing. And to me, it's just, it's so fascinating that it is, it combines sort of all these different things that I love, that there is the financial aspect to it, which I really enjoy, but there's a huge amount of philosophy involved, that there's no clear cut answer of, you know, good versus evil and morality in this day and age. And, you know, I do get questions from people, you know, how, if I'm against capitalism, you know, how can I invest at all? Right. And, and that there are, you know, so many different opinions when

it comes to these things. And, and lately, what I really the part that I love the most, I mean, I could go on for hours about ETFs and things like that. But what really gets me going are these impact investments, that, you know, these are things that are not traditional mutual funds, or, you know, traditional stocks or bonds. These are things like solar bonds or community bonds where you can invest in nonprofits. So for example, there's this great community here in Toronto called Sketch. And they're a nonprofit that provides arts programming to youth who are experiencing homelessness, which is incredible. Like it's giving these kids like a safe space. It's giving them skills. It's giving them community. It's this incredible

organization. And so they operate out of the Artscape building on Shaw Street for people who are in Toronto who might know it. It's this beautiful space and they've got sort of all their art space, all the studios are in the basement, and then they've got a little office on the first floor. And that really they pay rent every single month. So what Sketch is doing is issuing a community bond to be able to buy their space from Artscape. So that instead of paying rent every single month, they're basically paying off a mortgage.

And once that mortgage is paid off, they own that space. So not only does it protect them against rising rent in Toronto, which is a very real thing, but also this idea of long-term financial sustainability, allowing them to ensure that their mission is going to continue. And so they're offering a community bond. It's $1,000 a bond, you know, pays 3% per year, and you are locked in for three years. Obviously, there is some risk with it because the nonprofit could go bankrupt. And, you know, and it's not liquid. It's not something you can sell if you need the money. And you can't really easily hold it inside an

RSP or TFSA. So you are going to be paying taxes on that 3%. So again, it's not going to be the most optimal investment necessarily. But, you know, if you're looking for ways to be able to, you know, help with this issue, recognizing that homelessness is a huge problem and creating opportunities for youth who are like the least at fault when it comes to homelessness, like, you know, really that they've got their whole lives ahead of them, that this is a really cool to homelessness, like, you know, really that they've got their whole lives ahead of them, that this is a really cool way where you can, you know, again, you wouldn't want to put all of your money into this, but to carve out part of your portfolio to invest in a community bond like Sketch is just this, you know, to me, that's where you really get the positive

impact. And, you know, it's kind of the opposite. You talked about going through the list of holdings and getting those like, you know, that like gag reflex, like, I don't want that. That's gross. You know, this is the complete opposite. That when I think of some of these community bonds or solar bonds or green bonds or microfinance, where these are loans to, you know, entrepreneurs and co-ops and emerging economies that, you know, those just really give me warm fuzzies that, you know, make me feel really good. And that, you know, entrepreneurs and co-ops and emerging economies that, you know, those just really give me warm fuzzies that, you know, make me feel really good. And that, you know, understand that, yeah, I do, I am saving for retirement with most of my portfolio. I am trying to get market rates of return. And I am trying to really get that compound growth working for me. Absolutely. At the same time, you know, I might carve out part of my portfolio for something that I am

really passionate about and that, you know, I'm really going to feel good about and I know it's going to have like a direct positive impact. Yeah. And I think you mentioned this. I'm like, I didn't know that existed. I think a lot of people don't know this is even an option. Where can they find more information about like things like that, like those types of bonds? So unfortunately, like there's not, there's not a huge amount of information out there that it really is, you know, I would say my newsletter and my YouTube channel that, you know, that, that that's, I'm, I'm the one talking about these things, writing about these things again, you know, to go back to our conversation earlier about the regulators, you know, a lot of regulated advisors who are registered with the OSC are not allowed to talk about these things. They're considered private placements, so they can't even mention them, let alone sell them. And if a client of theirs did buy them, they wouldn't get any commissions on them. So they're not going to be talking about these things. So it really is kind of my unique business model that allows me to be able to evaluate and

talk about these different options. But really, there are a couple of resources online, although unfortunately, they haven't really been kept up to date. So there is open impact.ca, which has a registry. There is something called the SVX, the social venture connections, I think is their brand now, svx.ca. But really, it is going to be, you know, follow my YouTube. As I build out goodinvesting.com, as I move the content over from my blog to this new site, you know, one thing that I'm hoping to have are these Google Sheets, where, you know, I do have a list of all the different ETFs and, you know, sorted by geography, and that I do want to have a list of these impact bonds, it's a little bit tricky. The way it works is the window opens, and then they sell out, and then the window closes, and those bonds are no longer available. So, you know, it is something that's going to take a little bit of work on my part to sort of keep that updated. But, you know, my hope is to build a resource there so that, you know, Canadians can find which options are available

at any given time. And then, you know, on the YouTube channel, if I do get questions about them, that's where I can go through and kind of do a bit of a deeper dive and evaluate them. And, you know, I'll ask tough questions. I'll go through their financials and say, okay, you know, what is the risk here? How stable are your cash flows even during COVID? You know, how does an art space, you know, still generate revenue during a pandemic? You know, I'm not afraid of asking those tough questions and digging in and really evaluating the risk, but also evaluating the impact that, you know, how are, what is the impact of this? How many people are we helping? You know, how can I ensure that, you know, this is making the world

a better place? I think in this case, it's, it's a bit of a no brainer. I don't need too much data to tell me that this organization is having a positive impact, but it would be nice, you know, if they are measuring these things so that I can start to quantify that. Absolutely. Well, I feel like we, we could talk a lot about this because this is such an interesting topic. So I'm sure as things develop and evolve about this because this is such an interesting topic. So I'm sure as things develop and evolve, we'll have you back on the show. Hopefully not three years from now. That sounds like way too long.

I'll put it in the calendar for 2023. Here we go. Yeah, put it in the calendar. You've already mentioned some great resources, but I guess one central hub, of course, is your website. You said you're moving your blog over so people can check out the blog now, but depending on when you move over, just also sign up for your newsletter. I'm on it.

I'm also subscribed to your YouTube channel. It's a great, you know, way to keep, uh, updated, but where can, I think you've mentioned the, the URLs a few times, but just one more time, where can people find all that? Really good investing.com. That is going to be the central hub right now. It's a bit more of a sales website for my services. So a lot of the nerdy stuff is on sustainableeconomist.com for now, but everything is going to find its way over to goodinvesting.com. I've got my YouTube channel, which is Good Investing with Tim Nash. I'm on Twitter. I changed my handle. It's now Tim at Tim Nash CFP, because I did get that CFP designation. And really, those are going to

be the best ways. And if people have questions for me, my email is Tim at goodinvesting.com. And really, I just want to encourage people to just kind of start the journey on this, to start thinking about it, recognizing that this is an option. It's not going to be the best option for everybody right away. But as you look at it and you start to go through your holdings and know that this is an option, and I think for more and more people, this is looking to be a very good option. Definitely. Well, thank you so much for coming back on the show. As always, I knew it would be. It was so great chatting with you. Thank you so much for having me. It's such a pleasure. And that was episode 251. Make sure to check out the show notes for this episode at jessicamorehouse.com slash 251. You can find show notes for any episode ever of this show on

my website. Just go to jessicamorehouse.com slash whatever the number of that episode is, or just go to jessicamorehouse.com slash podcast. You can find all those episodes there in case you want to find out more details. Whenever I'm talking to a guest and they mention something, I usually include the mention or the link in the show notes in case you don't want to spend all that time tracking that down. Now, if you want to learn more about Tim Nash, make sure to go to goodinvesting.com, follow him on Twitter, and also make sure to follow him on YouTube. Again, all of his social channels will be on goodinvesting.com, so make sure to go and do that. He's got a ton of resources. And while you can, make sure to check out his blog, The Sustainable Economist. And check out the previous episode I had with him. 129 is what that episode number is. I have lots to share with

you. Do not go away. Just have a few words to share about this episode's sponsor. This episode of the Mo Money Podcast is supported by TD Direct Investing. You guys, you know when it comes to investing, there is one product I'm a sucker for, ETFs, which is hilarious considering five years ago when I started this podcast, I had no idea what an exchange-traded fund even was. Well, a lot can change in just a few years, which is what happened to TD Direct Investing's Goal Assist. It started as a feature introduced in their WebBroker platform to help investors set investment goals so they could be more intentional with their investment portfolios. That was back in April 2019. Now, in November 2020, Goal Assist has evolved into a standalone investment app called TD Goal Assist to help

you set and monitor your investment goals and manage your portfolio on the go. And the best part? There are no monthly or inactivity fees like most brokerage apps charge, and TD ETFs have unlimited commission-free trades, including their TD one-click ETF portfolios. You can also trade individual stocks at a flat fee of $9.99. Want to learn more? Visit the show notes for this episode or go to jessicamorehouse.com slash goal assist. Or try it out yourself by downloading the TD Goal Assist app via the App Store or Google Play and opening an account.

TD Goal Assist is a service of TD Direct Investing, a division of TD Waterhouse Canada Inc., a subsidiary of the Toronto Dominion Bank. Okay, first and foremost, because I haven't mentioned it I think for the past couple weeks possibly, I am doing a contest. And I guess I've got another two months of this contest because we've got another two months of the podcast before I take a little break. I'm actually doing this podcast a lot longer, like this particular season, a little longer than normal. Usually, I kind of cut it, I think, usually like the first week of December or mid-December, I'm running this season up until the end of December. I just have a lot of great guests. And also, what else am I going to do? I'm not going... Oh my God. That's why. Because I'm not going home for Christmas. That's so sad. But me and my husband, we talked about it. And yeah, it's just not going to happen. I'm not getting on a plane. There is no way I'm

going on a plane right now during this pandemic. Not going to happen. Not going to happen. So we are hunkering down in Toronto. And we haven't done that since the first year that we moved here seven years ago, which is crazy. And also looking back, that Christmas was so sad. I'm trying to make it fun by going to the movies on Christmas Day, which I've always wanted to do as a kid because we were never allowed to do that, obviously, because we usually hang out with family and whatnot. And then we did it and it was fine. It's never as good as hanging out with family.

So anyways, I'm trying to get into the... I know what you're saying. You're like, why are you talking about Christmas is literally the first week of November? Because I need something in my life to hold on to, to get excited about. And Christmas is the thing. So I'm going to be looking forward to it, planning, decorating for two months. Christmas to me starts now because I need something. Okay? I need this. I need this. Anyways, what was I talking about? Oh, I forget what I was originally talking about, but I think that the point I was trying to lead to this point that I'm running a contest of all the books featured on this season of the show.

I have several more guests on the show coming up who have written books. I'm going to be giving away their books. Go to jessicamorehouse.com slash contests or contest. Either or will do and it'll take you to the contest page where you can enter to win a book. Some other things you may not know, but I have a free resource library on my website, jessicamorehouse.com slash resources. I have a bunch of free downloads, free videos. It's all accessible right there. Also some of my budget spreadsheets. And also I've been getting a lot more people downloading my budget spreadsheet. So happy if you have the need for a budget spreadsheet, either in Excel or Google Sheets, whatever you like, go to jessicamorehouse.com slash shop. You can find all my different budget spreadsheets and go crazy. Oh, also, and this is very exciting. Maybe not for you. Maybe for you. I've actually

been getting quite like surprisingly, because I literally, as of the recording, this is Monday, I'm recording this. I've been getting quite a few like emails and messages about my experience doing the Canadian securities course. So I just wrote a blog post on my website, jessicamorris.com slash blog is where you can find my blog. And also made a video on my YouTube channel really talking about my experience doing the Canadian Securities Course and also how I passed and study tips and all this stuff.

And it's very fascinating because I'm like, oh, hopefully someone will find this helpful because I always, when I was studying, trying to find videos and people, I just wanted to know how people did it. And so I wanted to kind of, you know, also share my experience to help people and begin lots of interesting questions and people being, oh, thanks so much. And it's cool. I feel so not only still kind of in shock that I've passed, but happy that I can now help other people and make them like, let me kind of

make more sense. But I've gotten a few messages from people being like, oh, I don't know. I feel like I want to take it or I should take it for my career, but I just don't think I can pass. And my answer to this is like, literally anyone can pass. This is not easy. I'm not saying it is. It was one of the hardest exams I've ever taken. But if this girl who has a film degree and then just like read about, you know, is just kind of plopped into this personal finance world by just teaching myself this crap. Like I didn't, I don't have a business degree. I didn't go this, the kind of normal route. If I can hunker down, study and take the exams and pass, then there's no reason that you can't do the exact same thing. It's just

information. It's just, you know, anyone can get a textbook and read it and study it and learn it. So I don't know. Hopefully I'll make some people feel like, oh, if she can do it, I can do it. And that makes me happy because, you know, this is the reason I started the podcast is so everyone could feel better about bettering themselves and their financial lives. It's not hard. It's not just for a select group of people that know all the things and then you have to hire them to do the things for you. Hell no. You can learn all this crap by yourself. And if you've been one of the longtime listeners of the podcast, you know a ton. The amount of hours you've listened to experts on the show talk about this stuff, you know a ton. So amount of hours you've listened to experts on the show talk about this stuff,

you know a ton. So you just remember that. Oh, also, since I'm talking about YouTube or mentioned it briefly, I'm coming up with more videos. I put out one today. I'm going to be putting out a few more coming up. And I'm trying to get there. I'm trying to become kind of that go-to YouTube channel to learn about all things personal finance. And also, I've got a lot of Canadian-specific videos. So if you would be so kind, make sure to check me out, jessicamorehouse.com slash YouTube, or just Google Jessica Morehouse and YouTube when you'll find me. Make sure to subscribe. Also, if you would be also doubly kind, follow me on Instagram. I'm like, so hopefully by the time this

airs, I will be at 5,000 Instagram followers, but I'm like, I'm just, I just need a few more people just to get to that 5,000. And then the next goal is 10,000. Cause I just want that swipe up feature. Do you know what I mean? It's so annoying that they only let people with 10,000 Instagram followers have the swipe up. I just want to be able to swipe up on my stories, but I'm just not like that Insta influencer. Like I'm not that gal. I talk about money. So I'm doing my best. I'm doing as best as I can. But follow me on Instagram. Also, if you don't know, I also have a Twitter and a Instagram specifically for the podcast where it's more just like if you just want to keep up to date with like,

oh, there's a new episode dropping, follow at Mo Money Podcast on either Instagram and Twitter. And I always share it on the published date. So that's how you can kind of stay in the loop. Okay, last thing I'll share with you, and then I'll let you go. If you don't already know, I have a free Facebook group called the Money Life Balance Community. I've had it for several years now. I think I started in 2016, which is wild. So if you want to pop in there, join the crowd. We always talk money and it's a great place to ask questions or whatever. It's for Americans, Canadians, anybody who wants to be part of a positive, helpful community about personal finance. And yeah, that's really all I got. So thanks so much for listening to this episode. I'll be back next Wednesday with a fresh new episode of the moment podcast.

Until then, have a good rest of your week. This podcast is distributed by the women in media podcast network. Find out more at women in media.network.