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Are there alternative ways to invest savings?
What are some ways to grow your savings without investing it into the stock market/401k?
In short, I don't want my savings to fund giant corporations. It seems like most mutual funds can't exist without a portfolio of such corporations despite calling themselves green or ethical.
I've been storing funds in CDs or HYSEs but wondering if there are any other avenues.
I have a friend that invested his savings into his family by buying their debt. He gives them an interest rate that’s lower than what a bank would give and they give him a return rate that’s higher than what the market will give. Everybody wins. Of course this requires you to have close family with debt and them to be trustworthy enough to pay you back.
Sounds high risk of default or ruined family relationships tbh. Small amounts sure, but more than that it can get awkward really fast.
He’s at peace with the possibility they might not pay him back. He’s a very generous and decent person.
Hmm interesting idea, but having to manage something like that makes me a bit uncomfortable. Seems like it'll add a weird flavor to a relationship...
Extremely high risk, but also has the potential for highest possible (non monetary) returns. I would only ever advise doing this with no interest and ridiculously low monthly amount and fully expect for the money to be completely gone the moment it leaves your account. The reason for not charging interests is because people are really bad at calculating compound interest: the story will be remembered as usury and predation unless you only get back what you lent out. If they want to give you extra out of the goodness of their hearts at the end of the term, that would be a bonus.
I wouldn’t really call it an investment if you don’t charge interest. It’s fine if you want to help out a relative financially, but if you’re trying to plan for retirement, giving your friends 0% interest loans is counterproductive.
He gave each person a spreadsheet showing exactly how much they need to pay each month until everything is paid off.
If you want to avoid the private sector entirely then your only choice would be to stick to public bonds from the federal government, other national governments, and local governments. You will likely not be able to get as good of a return, but it is what it is.
I like the spirit of the question, and I hope there are some interesting ideas to be found - I really like @teaearlgraycold’s thinking, and I’m pretty sure there are peer-to-peer lending and/or micro finance platforms that’d allow something similar with a bit less personal attachment and management overhead, if you’re comfortable with the risk.
That said, it’s also worth remembering that CDs and savings accounts are still pretty much just putting money into a fungible pool for organisations who are likely to use that money less ethically than even an imperfect ethical fund.
Not that I’m trying to critique - kinda the opposite, I’m saying to pick your battles - it’s just that I personally would say that worrying about the Nth order impact of an S&P 500 tracker for a non-billionaire amount of wealth just doesn’t make the cut of being worth the mental overhead. If there’s an actively positive way you can invest, I think that’s worthwhile, but if there isn’t I’d say any commercial financial product (up to and including a basic current account) carries a similar moral burden to your average Vanguard ETF, so you’re better picking whichever makes the best return you can and using the money/energy/general wellbeing that brings you to do good in the world.
[Edit] Typo
Good points.
I do try to minimize the amount of funds in a big bank HYSE and more towards a mutual bank CDs that are supporting local businessees. But its also risky to store all my savings in a local bank.
Alternatives that are on par with stock market growth may not really exist under capitalsm - but i really wish there is something somewhat comparable.
Perhaps you could let us know why you're seeking another option? For instance, are you looking for something more ethical, or something more exciting with higher risk and higher reward, etc.?
Sorry - yes, something more ethical. Updated the post
If you want to protect your wealth against inflation in a relatively morally neutral way, investing some percentage into gold may be an option (of course, it shouldn't grow after adjusting for inflation). It also may be worth doing your due diligence to find a mutual fund with rigorous ethical standards (those with a religious affiliation or certification of some sort in particular may be worth looking into).
Buying US securities direct from the US government will cut out a lot of middlemen and be federally tax exempt in a way that regular CDs are not.
There are options from 4 weeks to 30 years. Interest rates are almost always better than any regular bank offers. Because this is the kinda stuff your bank buys.
No, they aren't federally tax exempt. They're exempt from state and local taxes.
(Apparently there is one exception when using certain bonds to pay for higher education.)
Also, there are muni bonds which are tax exempt.