There is more and more talk about and interest in having an ‘impact’ when it comes to investing and building businesses. It can certainly be a noble goal. So, what does it really mean to have an impact, or to make an impact investment?
Everyone would like to have a positive impact in some way. If they have the choice, they’d like their money to do more good, to invest in better things and companies, and to feel that they are making a difference in their lives.
Of course, as with most well intentioned concepts that emerge, this word also seems to have become one of the most convoluted and confusing, and one used with the most ambiguity in the past year.
So, what does it mean for you? What are some of the ways it has not turned out well before? How can it be done simply, transparently, and well?
What Does Having An ‘Impact’ Mean?
By official definition, impact means to forcibly come into contact, or have a strong effect on something.
When a lot of entrepreneurs say that they want to have a big impact, this is effectively what they mean and set out to do. Though many in their audience misunderstand this to specifically mean a benevolent impact. That certainly does not always appear to end up being the case. Or things evolve into something else. Just like Google eventually became Alphabet and decided to drop their ‘don’t be evil’ slogan.
Still, many understand the word and terms like ‘impact investing’ to have positive connotations, and mean that they want to have a positive effect. Whether that is through building a business, investing actively or passively, through how they use their time, or where they spend their dollars as a consumer.
Impact Gone Wrong
There are plenty of cases in which positive aspirations had big impacts, which ended up not being the outcome originally desired.
That has applied to science and technology that was used for military or predatory purposes. Which wasn’t the intent of the inventor at all.
Or there are entrepreneurs who set out to create companies that were better than the incumbents, and ended up being big and impactful, but did more harm to consumers. Zillow and some banks may be examples of that.
The same has happened in the eco-friendly movement. That is also the case with some technologies that end up doing far more harm to the planet and communities than previous solutions. Yet, billions more get invested in them for the commissions, fast profits on stocks, and corruption.
So, without all the cheesiness, fads, and just talk, what are some of the simple to understand ways that you can have a positive impact, do it at scale, and be proud of what you invest in?
Investing With A Positive Impact
Done well, the real estate business is a fantastic solution. Over at NNG, we live that through helping individual homeowners and business owners in trouble by providing healthy and truly affordable housing, creating jobs and employment, with a good place to work.
Our investors are also able to participate in that. And we create value, while having a positive impact on communities. At the same time, we enjoy attractive returns, without unnecessary risk or risking doing more damage than good.
Thank you to all those that have helped make this impact possible!
Find out more about investing in secured debt and real estate, go to NNG Capital Fund.
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