Idolize Impact, Not Capital

What would you do with 44 billion dollars? Solve world hunger? Fund the U.S. Climate Budget?  Pay for 3 Hubble Space Telescope missions? Buy a social media platform…? Last week we saw the latest billionaire buyout, with Elon Musk securing the privatization of Twitter for 44 billion dollars. Most reports this week have focused on the controversy of this individual event, but if you take a step back, there is something more significant going on. Billionaires are idolized for their net worth and their Forbes ranking. We see wealth on a scale like never before and, at the same time, inequality like never before. Why are everyday Americans idolizing capital so much?

What does it mean to be a billionaire?

To be declared a billionaire, you need to have a take-home salary of more than $1,000,000,000. That’s 1 thousand millions. According to Forbes’ 2021 list of billionaires, there are 2,578 billionaires worldwide – the U.S. has the most billionaires with 724, followed by China with 698. This makes up more than 50% of all billionaires on earth. The U.S. is also home to the two wealthiest billionaires: Elon Musk ($219billion) and Jeff Bezos ($171billion). You’ve probably heard the elite wealthy be referred to as the 1% – billionaires are in the 0.1-0.01% range.

Connotations of billionaire status are often associated with either old money or new money – inherited or “self-made.” In describing Forbes’ rich list, much of contemporary media categorizes them explicitly under these labels. In fact, Forbes even gives their billionaires list a self-made score. This rating and the title “self-made” often get mixed up in the problematic world of “self-made culture”. Self-made culture is the overemphasis on attributing a person’s success to their individual effort downplaying their privilege or network. A high-profile example of recent years is Kylie Jenner, who Forbes cover magazine called the youngest self-made billionaire. Her success is undoubtedly commendable, but she grew up in fame, security, and a high-status family. Her success occurred in the context of privilege. Calling her self-made suggests that anyone can achieve billionaire status if they work hard enough.

“Concentration of wealth yields concentration of political power. And concentration of political power gives rise to legislation that increases and accelerates the cycle.”

Noam Chomsky

Regardless of where a billionaire’s money comes from, their capital and status gain them their influence. Billionaires have a stake by proxy in national and international politics, social equity, and ultimately the face of the planet. Financial journalism calls out this billionaire infiltration of politics, comically calling it Casino Washington. The ultra-wealthy fund their way into American politics in overt and covert styles. Some have entirely self-funded their way into elections, like Michael Bloomberg or Jon Corzine. Others fund specific candidates, often in a narrow direction towards a favored policy, e.g., pharmaceutical drug prices.

Why idolize impact over capital?

To have wealth, in general, is not a problem. The power that billionaires gain by proxy of their capital for largely unregulated self-serving influences is the issue. Just think of U.S. tax laws. According to a Pew Research Center survey, Americans’ views about billionaires have grown somewhat negatively since 2020. Young adults were considerably more likely to report that having billionaires is bad for the country. It seems that billionaires are here to stay for the upcoming generation, with 86% of the existing billionaires from 2020 being wealthier than they were the year before. So, what can be done?

If the ultra-rich are here to stay, we need to shift our value messaging as consumers. We need to start recognizing the difference between someone whose wealth serves only them and someone whose wealth reaches far beyond their personal projects to the betterment of social and environmental causes. There are, broadly speaking, three approaches to wealth management of the ultra-rich.

  1. Self-serving: all about the capital, growing their wealth, and furthering leverage in politics or public platforms for the sole purpose of getting richer
  2. Philanthropic: donating proportions of wealth to good causes. This can be self-serving for image or altruistic intentions.
  3. Impact focused: all about the impact, placing their wealth in industries or causes that make the most difference and growing their wealth this way, using political leverage for social good.

At FLIT, we believe that you can grow your wealth without compromising your values by leading impact first. That’s not just true for our users; it’s an approach most accessible to billionaires. Impact first is what we should be idolizing, not net-worth or just % of income donated. What’s the real impact these people are making? How are they using their position and privilege to make the world a better place? When will Forbes start to rank their billionaires by social impact…?

WARNING! Impact Washing

We can’t say prioritize impact over capital without giving you a warning too – beware of impact washing. This is the impact version of greenwashing, where companies, banks, portfolios, celebrities, etc., phrase their work in a way that sounds better than it is and without acknowledging the damaging things they are doing alongside.

As mentioned in our article What is Sustainable Investing? you need to be eagle-eyed when it comes to impact washing. When a high net-worth individual claims to be making a difference in the world, ask yourself: what is the impact of their action? How is that impact measured? What other things are they involved in? Impact measurement is a challenge faced within the investing community and in the transaction of money at large (like billionaires buying and donating to things). Given there are no set regulations, we have to decide which framework we use. In the finance world, a couple of named frameworks for impact measurement include IRIS  by the Global Impact Investing Network and the Operating Principles for Impact Management developed by public and private sector participants. Another framework more accessible to the everyday person is considering how this high net-worth individual is making a difference according to the UN Sustainable Development Goals. You can learn about them very easily at their website and look at the targets and indicators for each goal. There are 17 goals in total. They cover a range of issues such as gender equality, climate change, poverty, and quality of education. When Elon Musk buys Twitter which SDG is he contributing $44billion to? When the Oscars provide $100,000 gift bags to celebrities, which SDGs are they contributing to? When applauding the ultra-rich and idolizing their success, we need to shift our message. The impact should be specific, targeting a selected issue and resulting in real change – throwing money at the problem is also not the answer. These individuals need to make informed and intentional choices with their donations.

Where does that leave you? You may not be a billionaire, but you can still make an impact because, in the end, to make a difference in the world, you need to do more than hoard your money in a virtual piggy bank. FLIT helps you make an impact while building capital but being impact-led means we don’t compromise on values. If a billion dollars gets you in the decision-making pool, then instead of 1 person with a billion dollars, let’s get tons of people to make up a billion dollars and have more people voting in the world with their dollars. This is the age of the financial activist. This is the decade of action.

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Prior to founding FLIT Invest, Alejandro worked at J.P. Morgan’s Private Bank in New York, where he oversaw and managed investments for ultra-high net worth families. Before J.P. Morgan, he was an investment analyst at Northwestern Mutual, responsible for developing comprehensive financial plans and asset allocation models. Alejandro is a CFA charterholder and former professional soccer player.

Steven is a UX/UI Designer based in Los Angeles, CA. He received his BA from CSULB focusing on graphic design. Steven approaches his projects with a keen eye for design while prioritizing user-friendly solutions. He is passionate about animal welfare, and environmental causes.

Prior to FLIT, Kinga worked at Ericsson as a software developer specializing in data analysis where she developed machine learning models to evaluate the quality of the encrypted media traffic over mobile networks. She is an advocate for promoting a transparent and effective work environment. Kinga values diversity and feels strongly about providing access to education. She has a sweet tooth, loves reading and HIIT training.

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Prior to founding FLIT Invest, Richard was an investment banker at ING in London. He advised banks, asset & wealth managers, FinTechs and other financial institutions on mergers & acquisitions, financing and other strategic projects. He is an impact investing enthusiast having advised BlueOrchard – leading global impact investing asset manager – on their sale to Schroders. Richard is a former professional triathlete, vegetarian and nature enthusiast.

Serena is a sales and growth professional. She has experience in rapidly scaling revenues for consumer products through the deployment of marketing campaigns and team strategy development. Serena has a keen eye for identifying and implementing emerging consumer trends that result in better user experiences. She is passionate about criminal justice reform and is a loud voice in the fight for gender and racial equality.

Martin is a Software Architect and Developer whose goal is to make FLIT Invest an application that puts usability and security first. Martin started his career in finance, where he developed an integrated treasury solution for banks and corporations. Then he deep-dived into medical imaging at Siemens Healthcare, where he spent years developing a next-generation radiography system. Martin is an avid traveler and loves cycling, hiking, and skiing.

Zsolt has worked as a Software Engineer in Germany, Scotland, and Hong Kong. His work experience lies predominantly in the FinTech industry, both in startups and well-established companies. Before FLIT Invest, Zsolt was a developer at Asia’s leading wealth management platform in Hong Kong. Alongside FLIT, Zsolt is completing his Master’s Degree in applied mathematics in London. In his free time, he enjoys swimming and reading fiction.

Tina is a UX/UI Designer based in Los Angeles, CA. Her expertise in both Economics and Interactive Design allows her to approach topics from a variety of perspectives in order to create products, assist people, and solve problems. She characterized challenges in a larger scope as an explorer, and she continued to look for solutions that would better human life. In addition to design, Tina is enthusiastic about women’s issues in society and animal welfare in various countries.

Peter is a Mobile Engineer with extensive experience in native iOS and Android app development. He has worked with various Fortune 500 companies across industries including fintech, transportation, human resources, energy, accounting, and pharmaceuticals. Being a lifelong learner he’s always eager to acquire new skills in various topics. He’s enthusiastic about different aspects of finance, and in his free time he enjoys working out.

Nick is a User Researcher based in Los Angeles, CA. After receiving his BA in Psychology, he moved on to receive a certificate in UX/UI from UCLA which set him on the path to understanding users. Nick approaches User Research with an empathetic lens, ensuring that every user’s needs are considered in each step of the process. Nick is passionate about providing sustainable change, and in his free time, he’s looking for another national park to check off the list.

Brian is a self-taught iOS developer based in Los Angeles, CA. Driven by a strong interest in finance and renewable energy, he takes pride in being part of a team that takes huge steps towards a greener future. Prior to joining FLIT, Brian played multiple competitive games such as League of Legends at a top-tier level- applying the same mindset of growth and improvement from gaming to his iOS development. Brian is often playing the piano in his free time and is extremely fascinated by artificial intelligence.

Rob is an impact investing analyst passionate about sustainability and its role in finance. Currently, he is a student at the University at Buffalo (UB), where he is the President of the UB Sustainable Business Association and a Board Member of the UB Equity Research Group. In his free time, you can catch Rob exercising or golfing.

Holly is a BSc Psychology with International Placement graduate from the University of Manchester, UK. She has worked and volunteered in the social care sector for 7 years and whilst at university, established an award-winning student zero-waste shop. She is passionate about social justice and environmental sustainability, and in her spare time volunteers as a Scout Leader and enjoys going for tea and cake with friends.

Jake is an entrepreneur, designer, and biologist passionate about sustainability. Previously, Jake founded VOSTIC, a company that manufactured and distributed a kelp-based replacement for plastic. Jake holds a master’s degree in Design Systems from Pacific Northwest College of Art and a bachelor’s degree in Biology from Lewis & Clark College. On weekends you might find him making music or snowboarding at Mt. Hood.