Geoff has a strong interest in impact investing and social entrepreneurship, and is a champion of the great potential for mutually beneficial collaboration between business, government and civil society organizations.

Impact Investing Post #4: Keeping in Mind the Value of TIME

Impact Investing Post #4: Keeping in Mind the Value of TIME

In an ideal world, everyone would have money that could be invested on their behalf at birth to take maximum advantage of the Time Value of Money.

 

In an ideal world, everyone could plan their lives knowing for sure that they would be around for a good long (ideally very healthy!) run… The example in my graph being 105+ years following on Impact Investing Tribute #3 to my inspiring relative, Alf.  We do not live in this type of world, however, but we do know that our TIME is subject to the Law of Scarcity.  How long do we have?   Not if but when our time will be up.  That's what makes it so valuable AND so important to reflect on.  What type of letter to our future self would we write today, and what type of letter to our younger self would we want to write many years down the road?  By periodically reflecting on the Value of TIME, perhaps we might invest it more wisely.   

 

Knowing the number of years we have to live with certainty would facilitate better (not necessarily easier!) tactical and strategic planning for individuals and governments.   If you were to shorten the x-axis in the attached graph to focus on usual working years and average life expectancy, you would still see the negative correlation between the Time Value of Money and the Value of Time.  That is something to consider...

 

Of course a secure financial retirement is extremely important for individuals and living out our dreams is partially tied to our financial means.  But as people age, in addition to relying on the luck of their genes and their lifestyle habits; close relationships and engagement, a sense of purpose and a sense of humour tend to be at the top of the list of factors that support longevity and overall contentment.  

 

So what does this have to do with Impact Investing?  Impact Investments are based on intentionality.  By definition, there is a purpose driving the targeted social and/or environmental returns (outcomes) delivered together with the financial return in every strategy.  Retirees, especially later in retirement, are not usually looking for jobs but seek a sense of purpose.  They have a lifetime of experience and - reflecting on the Value of TIME - they potentially have many incentives to share their voices (when given the opportunity) and invest in ways that meet their financial needs AND make our world a better place for future generations.  All this can be aided through the toolkit of available solutions and needed innovations through Impact Investing.

 

Addressing the major social and environmental challenges of our TIME ideally calls for all hands on deck; inclusion of as many people as possible and actioning the best ideas through collaborations across the private sector, government and civil society organizations.   “Stranded assets” of human capital are both a disservice to those not engaged and unfortunate constraints to societies moving forward.  At every point in our lives at the very least our dignity and unique combined experiences allow everyone to potentially contribute something of value.

 

No matter what financial metrics you want to analyze and value, also periodically keeping in mind the Value of TIME as we move through TIME can sharpen our minds and help find more creative, optimal solutions.    

 

Reflecting periodically on the bigger picture of the Value of TIME can allow us to put into broader perspective the short-term battles, which ones are really necessary and which ones we want to be involved in; versus the longer-term battle which will “win the war” and move us on to another day.   As many organizations and participants are saying, the finance industry is in the process of redefining its role in society with a move to a greater focus on purpose and solutions, and a greater balance between the short-term AND the longer-term.  There will be more and more need AND demand for Impact Investing in the future.

Impact Investing Tribute #5

Impact Investing Tribute #5

Impact Investing Tribute #3: To a Girl who was both 13 AND 78 at the same TIME

Impact Investing Tribute #3: To a Girl who was both 13 AND 78 at the same TIME