Living in a time when failed banks, corporate bailouts, and increased unemployment is the daily norm in the States, many of us are struggling with the question of whether or not to invest in the U.S. market. Green America, a nonprofit organization known for its promotion of green and fair trade business principles, wrote in their Real Green newsletter last fall about how investing to be green (and saving green) is a reality. We all know investing our hard-earned cash comes with many risks, especially for those of you like myself who are currently enrolled in undergraduate programs footing hefty tuition bills. Green America’s staff writer, Tracy Fernandez Rysavy, shows us how we can invest responsibly in our communities no matter how high or low our risk tolerance is.

Determining your risk tolerance is the first step in pursuing new investments. Everybody’s risk tolerance is different based on age, industry, and savings. Rysavy suggests speaking with a financial advisor to determine your “investment comfort zone”. For those who would rather take less of a risk, market-linked CDs are a great alternative to directly investing in the stock market. Financial advisor, Ed Winslow, who is the founder of Protect Money Investments, says that market-linked CDs are hard to find at community investing banks. However, your financial advisor can direct you towards banks known for their social and environmental activism. On the other hand, Michelle Weber of Edwards Jones believes in investing directly into the stock market. A social investing financial advisor, Weber states that despite the ups and downs the economy experiences, overall progress is being made. Thus, the opportunity for moneymaking in the stock market is still a reality.

Once you have determined the kind of investment best for you, make an effort to specifically invest in federally insured socially responsible investing (SRI) accounts. Rysavy suggests heading over to Community Invest, an organization who directs investors to community investing institutions. These institutions work on boosting the economies of low-income communities. To assist you with navigating the SRI world, head over to Green Pages where SRI advisors and mutual funds are listed, so you can find causes you and progressive companies and firms mutually support. Many financial advisers, like Brian Laverty of High Impact Investments, forecasts that companies who are enacting greener policies are moving forward in their respective markets compared to companies who are behind socially and environmentally. When it comes to long-term finances, Laverty expects green businesses to come out on top. Therefore, it is smart to invest in companies who support our communities and environment.

But what about college students, many of whom spearhead progressive initiatives through demonstration, writing, and fundraising, but do not have the financial means themselves to take a risk in SRI? Being a student who has accumulated probably too many student loans and attends a private university in Washington, D.C., investing is not exactly on my to-do list. However, I was able to make a low-risk investment in a local business in Lima, Peru through a non-profit organization called Kiva. Kiva extends small loans to prospective business owners across the globe. The beauty of Kiva is you can choose whom you are loaning to. I loaned $25 in November of 2009 to Marisol, a married mother of 2, who sells baked goods out of her husband’s hardware store. I chose Marisol because, at the time, I was preparing to jet off to Cusco, Peru to work at a community center over my holiday break. I thought it would be another fantastic way to show my support for the country. I was paid back in monthly installments of $5 through April 2010 and was repaid 100% of my investment. Best of all, the current repayment rate to lenders is 98.79%. Even though you do not net a gain or profit from this investment, the satisfaction of furthering future small business owners with their business ventures truly gives you that warm fuzzy feeling. The best is when Kiva sends a message to you about the progress of those you loaned to.

In all, you do not have to work on Wall Street to know how to invest wisely. Neither do you have to have deep pockets to make a smart, sound investment. Better yet, there are numerous opportunities for you to invest in specific companies and firms who share your wish for improved communities and a cleaner environment. Spend your money wisely and happy investing!

-Derek Rogers