A Pagan investing primer (which is actually for everybody)

A family friend recently asked me about the stock market. E knows it’s an important part of the economy, but is frustrated how little e was learning in school about it. “All I really know is that it’s where people make money,” e said. E knows it to be an important concept, but not important enough that it’s part of eir high school curriculum. That’s prompted me to think about what someone needs to know about the stock market by the time e enters adulthood. Two broad areas of knowledge are needed, I believe:

  1. an understanding of the relationships among capitalism, publicly-traded stocks, and morality, and
  2. an understanding of the risks, benefits, and advantages of investing in these kinds of corporations.

There are many people who could lay out the ecological, sociological, political, and moral impacts of putting one’s money in corporate coffers than I ever could. For that aspect, I will just point my young friend to choice posts on this and other sites, and information about how some people attempt to redirect that energy (or mitigate the damage) through socially-responsible investing. These are important questions to resolve for oneself.

Stock investment is steeped to the eyeballs in the idea that corporations are people. The word corporation itself means “body,” and the shares that one buys and sells are, I suppose, pieces of that body, which really sounds ghoulish. I find the idea that businesses are people to be extremely problematic, but at present it’s the major model recognized in law. Part of my curriculum — but not the first part, unless I want to bore em into never asking for the second — will be a discussion of that concept.

For my part, I’m going to try to lay out some of the hows and whys of the stock market, which e can then place in context of those other arguments. Here are some of the questions I think are worth answering:

  1. Can I get rich quick investing in the stock market?
    Good gods, no, and that false promise is one of the first forms of evil neophyte investors tend to encounter. The stock market is based on a really unwholesome tenet of capitalism, the idea that growth must be constant and unlimited in order to be healthy, which makes it pretty easy to sell that nonsensical get-rich-quick notion. In truth, what goes up must come down, and the value of any particular stock does rise and fall over time, meaning that it’s possible to buy a share of a corporation and then sell it at a loss. People can, and do, lose lots of money investing in stocks. The techniques used by ordinary (but educated) stock investors are intended to build wealth over the long haul. To be clear, even the most morally-minded investments in this area are a dip into the essence of capitalism.
  2. What is stock, anyway? Is it like chicken stock?
    Not quite, and if there’s a clear connection I haven’t had the time to root it out. I suppose if one considers chicken stock to be the basic unit of chicken it works intellectually, but it most assuredly does not work for the chicken. In this context, “stock” refers to the bits into which a corporation is sliced in order to buy and sell it piecemeal; more fully it’s “shares of stock.” If I create a corporation (Terrific Pendulous Wellingtons, Inc.) and declare that it has 100 shares of stock, then ownership stake in that corporation is divided 100 ways. I can sell the shares, and the money goes into a corporate account, presumably to fund development of those amazing, hanging boots. If my friend Betty buy five shares, she doesn’t have to retain them; the stock market exists to make it easier to find someone interested in buying them. Betty probably would like to sell them for more than she paid me, and if she finds someone who believes my hard work will result in amazing profits, she might do that; that’s how stock prices go up. On the other hand, if she can’t find anyone with confidence in my vision, and people think I will be a failure, she may only be able to sell the shares at a loss.
  3. How do I actually buy or sell shares of stock?
    Technically, anyone who owns shares of stock could sell them to anyone else, but these days nearly all of those transactions involve a broker, a middleman who snags a commission for clicking a few keys. Some of them offer advice, but that’s the topic of another question.
  4. What are dividends? Why would I want them?
    In theory, dividends are the reason why anyone buys stocks, because they’re payments made to shareholders representing a portion of the company’s profits. Companies where this is standard practice get their shares referred to as “income stocks” for that reason.
    However, dividends get taxes as ordinary income, which some people prefer to avoid. The other way to make money on stocks is easier on the taxes: investing for growth, or buying at a low price and selling when they cost more. Taxes only happen when the shares are sold, and for higher-income folks it’s at a lower rate.
    Share prices rise when more people want to buy then want to sell, which suggests a lot of people consider them valuable. That could be due to a handsome dividend, or maybe a new product was announced that investors believe will rake in the cash. Shares in Apple tend to rise or fall after one of their snazzy CEO product releases, depending on the wow-factor of this year’s iPhone and such.
  5. How can something called DRIP be a good thing?
    This acronym refers to dividend reinvestment programs, which address the biggest issue that anyone ever has with money: if it’s possible to spend it, it’s more likely to get it spent. DRIP stands for dividend reinvestment program, in which stock dividends, rather than being paid to the shareholder, are instead used to buy more shares of the same stock.
  6. What’s a split?
    This word means that a share of stock has been broken into more shares that cost less, and is used to keep the price of shares affordable. If a company’s stock, selling at $100 per share, is split two for one, the holder of one share will wake up one day the owner of two shares that sell for $50 each; the total value never changes in the split, but the price can be pushed up by people who think it matters for some reason. A only example of what stock prices look like when shares are never split is Berkshire Hathaway, as far as I know.
  7. Is it possible to be in the stock market and not be a terrible person?
    Maybe. The real problem is that C corporations — the ones shares in which are most commonly traded on public exchanges — are chartered to make money for shareholders, and directors and officers of such companies will use that as an excuse not to do anything that might slow down the cash, even if it means ignoring practices which are more ethical or sustainable. There are now corporations which are chartered with a mandate to focus on the so-called triple bottom line, which includes not only profit, but people and planet; very few of these B corprorations are publicly traded. However, there are mutual funds the managers of which seek out C corporations which are governed by such ethics. Another way to try to offset damage done by a company while benefiting from its profits is to engage in shareholder activism.
  8. How do I make hella money and fast?
    The best way to make beaucoup bucks insanely fast is to start with a few million already. Like attracts like and compound interest is incredibly powerful, which means that if — like me — you don’t have a lot of money, the more time you can allow your investments to grow the more likely you are to reach that point. Sorry.
  9. What’s the rule of 72?
    This is a simplified formula for determining how quickly an investment will double in value. Divide 72 by the rate of annual return to get the number of years this will take. There are more precise formulas, but this will get you in the ballpark. Keep in mind, however, that a higher rate of return is always tied to a higher chance that the investment will go bust, and all the money will be lost. All magic comes with a price.
  10. What are penny stocks, and how can I get in on that?
    That’s a term for stock which sell for less than a dollar — pennies — per share. Low prices do not necessarily denote bargains, however, and while the potential to make a lot of money when such a stock rises in price can be huge, these are companies more likely to go bust than boom. That would mean all the money invested goes away. Don’t invest in penny stocks unless you personally understand how that particular company operates. Don’t listen to brokers or sales dudes; if you’re not sure how to thoroughly research a company, then you have no business investing like this.
  11. Stocks and bonds, stocks and bonds. Why are they paired? How are they different?
    If you own shares of stock, you own a piece of the company, and thus a share of its profits. When you hold bonds, you have loaned money to the company which must get paid back before stockholders get their profits in the form of higher share prices or dividends. Bond owners get paid first, but over the long haul stockholders tend to get paid more. The value of stocks can go down as well as up, and it’s possible to lose money if shares are sold when they are very low in price. Bond payments tend to be the same, no matter what, which is why they are described as less risky than stocks: you know how much money you’re going to make, and when.
  12. What are mutual funds?
    These are pools of money into which many people chip, on the theory that going large is the best way to make money investing. Some of these are actively managed, meaning someone is paid to buy and sell; then there are index funds which are managed by a computer program to simply echo the proportions in a particular stock index. Over time, index funds are always the better deal for the little guy, because no money manager can beat the market averages year over year by enough to make up for paying that person’s salary as well as the taxes on that active trading.
  13. Then what’s an index?
    This is a compilation, such as the Dow Jones or the Standard & Poor’s 500, which is intended to represent what’s happening in the market overall. A bunch of stocks (30 in the former example, 500 in the latter) chosen by self-described experts to stand in for the market overall, a particular sector, or even some [theory]. One cannot invest in an index, because it’s a just a number compiled by plugging in the values of the member stocks into an arcane formula, but index funds exist which closely track just about any index ever conceived.
  14. Is it possible to change the system from the inside?
    Not everyone believes this is the case, and an argument against even trying is that one’s time and resources are better spent doing something else. However, I believe that my vote matters, and one path toward changing the system from within is becoming a shareholder activist, an owner of stock who votes those shares to follow one’s conscience at the annual meeting. Most stock shares carry voting privileges, and — this being the beating heart of capitalism — owning more shares means getting more votes. Shareholders may bring matters to the shareholders directly at those meetings, meaning that just owning the stock of a company with a nasty record pretty much guarantees a lot of shareholder-brought actions to impose board term limits, cap CEO pay, increase diversity, and follow higher environmental standards, among others. These resolutions get distributed to all shareholders in advance, along with a recommendation about each one from the directors (which is always AGAINST any proposal they didn’t offer themselves). This is also the way to try to get board members elected who might actually support things like human and non-human rights. It’s not the right choice for every person — particularly those looking for change to happen quickly — but it’s an option I think is worth exploring. With enough people shaking the rafters, something’s going to fall from the eves eventually.

Whether one considers the capital market to be a nexus of evil or the road to abundance, it’s an institution which, like democracy, must be studied by anyone living under its influence, because ignorance always begets suffering. These questions might be a beginning, but what lies ahead is a life of study, an obligation of every citizen. Get to work.

A child’s debt

My parents reared five children and helped them each with college. In the end, there wasn’t enough money left to keep my mother out of a Medicaid-funded nursing home. Many of the people who work there are unaccustomed to patients who are still aware of their surroundings, making the situation less than ideal for her.

When I think about debt owed to my parents, that’s the kind of debt I mean: the opportunity cost they paid by having just one more kid, me. I think I made out well, what with being alive and all, but it’s important to recognize the tremendous amount of sacrifice made on my behalf. Not only might the gray hairs have accumulated more slowly in my absence, it’s possible the money might have lasted a bit longer as well.

I owe something of a debt to Gaia on account of my life, as well, or perhaps that debt falls to my parents. There is no greater environmental impact a human being can have upon the earth than creating another human being to live upon the earth. I always enjoy spending time around children, yet I have never pursued procreation precisely for that reason. What could I possibly do to mitigate the impact of another life upon the planet, when I barely make a dent in my own debt? Even as I write this, I’m aware that some of the electricity powering my computer is derived by burning coal, and that the processors within contain rare-earth elements the extraction and disposal of which is highly problematic. My every breath impacts the world around me, and as a human my activities can change the world more, thanks to technology, than can an individual of pretty much any other species. I don’t think about that impact constantly, and even if I did it’s still incredibly difficult to have zero impact at all.

That is the sort of thinking which can lead to guilt and self-loathing. I mostly avoid doing that to myself. Suicide, which is the alternative most likely to be suggested if I whine about this on the internet, has impacts itself. Some of the people who love me may just call me on the carpet at their ancestor shrines if I were to pull that without telling them, and I am not interested in that having that conversation whether I am dead or alive, thank you very much. I’ve also had people propose the “solution” of having children and then teaching them my values. Which ones, exactly? It might be awkward to tell my offspring that I do not believe in having offspring, and I don’t think that they should, either.

It’s the debt to my parents which I sit with most, though, since I am not remotely contemplating a final solution for myself. Including public college, that’s now in excess of $350,000 in my part of the country according to this calculator. That could have paid for a heck of a lot of care. Unless there’s a lucky lottery ticket in my future, that’s not something I can pay back, not that either of my parents would ever have suggested such a thing. The very notion would likely offend, but I think it’s okay to contemplate the choices my parents made to give me life, and then to provide me with the upbringing that they could best afford without contemplating what it might cost them in turn. It’s really the minimum we expect of parents, and that’s a lot to ask considering how little thought is actually needed to create a child.

The debt to my parents is, in fact, incalculable. It’s my duty to honor that choice, even as I choose for myself to make a different sacrifice. Unlike them, I may well die alone, as I have no blood issue, and do not wish to add the burden of another human life to this beleaguered planet. I wish more people would make that same sacrifice, but I recognize that when done correctly, either choice carries a high price.

Towards a drama-less year

After reading a few top ten lists of Pagan blog posts for 2013, I’m really very excited about this community.  It’s been so volatile, in such specific ways, that I think it’s poised for another evolution.

Two theater masks, one white and smiling, the other black and frowning, generally called the comedy and tragedy masks, overlaid by a red circle with a slash through it, a common sign for no.

The stuff that has gotten people really engaged has been about important questions:

These are the queries of a maturing religious movement.  In the early 1970s none of them could have been asked, because Paganism as practiced by the early revivers had a lot less diversity — and a lot less internet.  Communicating through mimeographed newsletters and almost entirely meeting as covens, those brave souls were the pioneers of a public Paganism in the modern age.  People didn’t leave Paganism (at least not with fanfare).  They were mostly in covens because Wicca was paved the way for other Pagan paths.  Atheists and polytheists (particularly reconstructionist hard polytheists) were all but unheard of.  Institutions were beyond imagining — and not entirely welcome.

It was a different time.

And the very fact that it was a different time — that Paganism has survived long enough, and been open enough, to evolve — is a testament to the passion and drive of those “early adopters” of contemporary Paganism.  The term now includes faiths that are wildly different from one another, so much so that some consider Pagan conversation to be interfaith work.

But can we have these conversations, these oft-painful conversations, without drama?  I believe so, but it’s going to take a deeper form of listening (reading, really, since so much of this takes place in written form) than most of us are exercising.  Deep listening, and responding in a way that reflects that listening.  From what I have gathered, much of the hurt feelings and umbrage comes from a sense of exclusion, or a presumption of inclusion.

My experience with magic might work as an example.  If it weren’t for the Pagans I met as a young adult, I wouldn’t know the concept even existed.  They were Wiccan, and their practice centered around using magic.  For the most part, mine never has.  I have used magic and continue to study it, but I do not “work with” my gods, I worship them.  So when I read an opinion that Paganism needs more formalized magical training, I think to myself, no, it doesn’t.  Maybe some forms of Paganism do, but there is a growing number of Pagans who don’t touch the stuff, or, like me, don’t consider it part of their religious practice.

That kind of wording can leave a reader feeling excluded, if they don’t practice magic themselves.  In the alternative, it can lead others to believe that all Pagans are included in under the “raise energy by invoking the Goddess” umbrella, when that simply isn’t the case.  The language is not reflective of deeply listening to the audience, so the point (which is certainly worthy of discussion) gets a bit lost.  It may be clumsier to use a phrase such as “those Pagans who incorporate magic into their religion,” but that kind of phrasing helps the piece find its intended audience.  (And if a clumsy phrase is used often enough, people are bound to shorten it.  I cringe at the thought of being called a PWIMITR, but we all have our burdens.)

Carelessly including those who do not belong, as well as excluding those who feel they do, leads to a lot of distracting, drama-riddled debate.  And once someone’s hot button is pushed, it’s very easy for the reaction to push someone else’s.  The fact that this is religion makes it all the more problematic, because my experience of Hermes may well be considered blasphemous to another of his worshipers.  Our beliefs are the result of long struggles, and challenges to them are often met with force (of words, not blows, but the results can be just as devastating).

We can have important conversations about the future of Paganism, with all the myriad meanings that phrase brings to mind.  To do so, we’re going to need to listen more deeply than most of us (myself readily included) are comfortable with.  Far, far deeper than drama allows.  So here’s to a year of deep listening, not drama.