See Investing Through Others’ Eyes

My Dad grew up in an orphanage from age five. It wasn’t a pleasant life by today’s standards but with the depression going on he recognized the blessing of having a warm bed and three meals a day. At the age of 13 he “graduated” from the orphanage and was sent out to make his own way in the world. His life on the streets of Detroit as a teen was totally foreign to me. My teen years were a carefree, wonderful time. His were all about survival.

Because of his life, my dad always had a soft spot in his heart for people in need, even those that many avoid because of their harsh look. He understood them in a way we kids of the roaring 70’s never could. One day my dad came home from work with a homeless man named Woody. This was not an uncommon occurrence in our home. To help Woody out he offered him food, a place to stay for a while, and odd jobs around the house.

One project he hired Woody to do was putting some new molding on our kitchen door. He worked on it for many hours, then proudly called us all in to see the finished project. Immediately, even the youngest of us noticed he had mounted the molding backwards, and I started to blurt out the obvious when my Dad shushed me and said, “It’s beautiful Woody.”

Later that day our dad taught us that Woody’s life was much different than ours, and that he probably didn’t know how to mount a door molding because he never had a home. He decided not to fix the door but left the molding backwards as a daily reminder that others see the world differently than we do because their experience is different. When my parents moved eight years later the molding was still backwards.

The situation in which a person grew up has a great effect on how they invest. Depression era investors often shunned risk, focusing on bonds, CD’s and large cap value companies. Their baby boomer children had easier lives, so they became more ambitious investors, using investing as a tool to become rich as soon as possible.

Millennials have grown up in a digital world. They care more about their online social life than material goods. Thus, they love to invest in new technology and in companies they believe will change the world, not just make money off it. As a result, in increasing numbers they are asking for investments that are environmentally, socially, and politically responsible, known as ESG investing. They want to own businesses that are also good citizens.

For older generations who focused on earnings this may seem like millennials are putting the molding on backwards. But as this growing group is gaining more economic power, it may be wise and profitable to pay more attention to how these new investors see the world. Their parents invested to make money. Millennials invest to make a difference. It’s possible to do both.