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Clean up your financial books as well as your physical ones.
SPRING CLEANING

How to Marie Kondo your investments so they spark joy, too

Natasha Lamb
By Natasha Lamb

Managing partner at Arjuna Capital

Like so many this winter, I have been binge watching Tidying Up with Marie Kondo, spiffing up my sock drawer and feeling inspired to clear out those personal belongings that do not spark joy. That got me thinking…

Can an investment portfolio spark joy?

In the same way Marie Kondo helps us tidy up our lives by tossing out things in our closet that don’t make us happy, we can reassess outdated investments in our portfolio that no longer reflect our personal values. For so many of us, those are investments that don’t apply sustainability metrics or influence society in positive ways.

I see this all the time. Clients start out in life with either relatively little money or inherit a lot of money, and make their initial investments solely with building or maintaining their wealth in mind, not thinking about the impact of those dollars. Over time, they amass funds and life experiences, and decide that they want their money to be aligned with their financial goals and personal values: They want to invest with positive impact.

But as clients look to add more sustainable impact investments, they don’t often shake off their older ones. Investments in fossil fuels, weapons manufacturers, or tobacco may creep to the back of the closet, taking up space—and money—without being seen nor heard.

For those who are feeling inspired, spring is a great time to not only clean up your pantry and supply closet, but also clear out the investments that no longer serve you. It’s a chance to align your intellectual understanding of where the world is and where it needs to go with how you can help it get there. In doing so, you can align your investments not only with your financial goals, but invest in solutions to some of the world’s biggest sustainability challenges.

Before investors can take this step, they need help working out what’s hiding in the dark corners of their financial closets. You need to pry open the door, assess what’s in there, and figure out what stays and what goes. You might be surprised what you find amidst the cobwebs: both financial instruments that no longer reflect your interests or values, but also long-forgotten gems, the economic equivalent of that beautiful scarf you bought on your last vacation that you had totally forgotten about.

Here are some tips to help you roll up your sleeves and tackle the spring cleaning of your portfolio:

  1. Start by making a checklist and creating your own personal investing screens.
  2. Identify those investments in your current portfolio that don’t resonate with who you are as a person.
  3. Decide instead where you think the world needs to go. What kind of impact do you want to be part of and where?
  4. Create a new portfolio of impact investments that clears out the garbage, brings you joy, and delivers a positive boost to the world and your wallet.

Invest in the world you want to live in. While you’re spring cleaning your home, you can also tidy up your financial future, redefine your relationship with money, and create a more joyful planet for us all.