- Judy Esber, 37, is a former union organizer who became a personal finance coach in her second career.
- Her activism in the past reflects her views on investing, and she is a strong proponent of ethical investing.
- She believes that ESG index funds are a good entry point for ethical investing.
Before Judy Esber, 37, started listen to me about finance And as a personal finance coach for women and gender-nonconforming clients, she’s a union organizer running events for food service workers and stadium workers.
While Esber says her job as a union organizer is a labor of love, it’s very hard work.
“As a union organizer, it was really intense,” Esper said. “It’s long hours, and very high stress work — especially after Trump got elected. You’re working 15 or 16 hour days.”
Esber said she worked at her unit for about 11 years but eventually left it because the long days and heavy workload had a significant impact on her physical and mental health.
“It’s been hard for me,” Esper said, adding that she sees labor organizing as something she’ll do for the rest of her life. “Like, this is my mission – I’m changing the world. It’s an important job, so why should I do anything else?”
Over time, however, Esber found her career demands were becoming unsustainable, and she became increasingly aware that she could turn to a personal finance coach. She’s already started to develop frugal habits, and she’s organizing that has worked for her personally, like paying off $11,000 worth of credit card debt, and developing a super savings strategy that eventually helped her build up a $50,000 reserve in a year.
Considering her job at the time, it was no small feat.
“For a new organizer, it’s easy to go into debt because you end up eating out three meals and buying coffee,” Esper said. “You’re so tired. You don’t have time to go to the grocery store to prepare meals. It’s not a high-paying job either.”
That said, Esber was able to get into a sustainable state where she was able to find time to pack lunch and start making coffee at home.
“I also learned how to refinance my credit card debt and got a high-yield savings account,” Esper said, adding that other young organizers would start telling colleagues who were struggling financially to ask Esper sought advice because “Judy knows how to deal with money.”
After a particularly heated conversation with a friend, she did some self-reflection about what areas of work she was passionate about in addition to labor organizations, and concluded that she also enjoyed talking to people about money. Then she started researching whether it was something she could make a living from.
It turns out – she can. Things started to fall into place, and Esper’s sister connected her with a financial coach to help her get started.
“I started building my business step by step,” Esber said. “But when I started digging into the world, I realized that historically it tends to be more conservative. When I started, there weren’t a lot of activists or women of color in the world.”
Esper said she feels like that has changed a bit over the past three years, but the lack of diversity in the personal finance space means some popular ideas about money management may be a little outdated to her.
“They don’t look at money management from a social justice lens, so I’m excited to offer a different perspective in this area,” Esper said.
This background has made her an advocate for “ethical investing”, which is synonymous with the environmental, social and governance (ESG) investing world.
What is ESG investing?
ESG investing is a strategy some investors use when they want their portfolios to align with their ethics and values, thereby influencing global issues that are meaningful to them. This framework has been around for decades, but its popularity began to grow dramatically about 10 years ago as investors became more socially aware.
Each investment in the ESG portfolio is assessed by three criteria that make up the acronym, all of which are centered on corporate responsibility. Investors want to know the company’s impact on the environment – carbon footprint, land use, waste management, etc.
For social standards, investors want to know the company’s track record in labor practices, wages, and community relations.
Governance factors relate to the guiding philosophy and ethical framework that company executives adhere to, as well as board diversity and company compensation transparency.
In general, this type of investing falls under the umbrella of impact investing, which is a fairly easy entry point for investors who don’t have a lot of capital and want to get involved and leverage their portfolio for greater benefit.
“I actually have a course that teaches people to invest ethically,” Esper said, adding that the best place to start is to look for ESG index funds.
“Vanguard has a lot of really good ESG index fund options, and I believe Fidelity has it too,” Esper said. “There’s a lot of stuff right now.”
Vanguard has a popular ESG index fund called FTSE Social Index Fund (VFTAX)and there are two ESG index options from BlackRock iShares called iShares MSCI US ESG Select ETF (SUSA) and iShares Global Clean Energy ETF (ICLN).
Previously high fees begin to decline as demand for ESG rises
Esber said she doesn’t like every ESG fund on the market, and it’s important to evaluate factors such as fees, in addition to the portfolio itself, before investing.
“In the past, if you wanted to invest based on your values, you had to pay more — but that has changed,” Esper said. “The more people who actually invest in this space, the more these companies will want to offer better ESG options, both in terms of what the fund invests in, and in terms of fees.”
One of the reasons for this growth, Esber said, is that women are starting to invest at a higher rate than before, and Women are statistically more likely to invest based on their personal values.
“I believe that if we keep doing this, the choices will get better and better,” Esper said.
Another thing many critics say about ESG investing is that the returns aren’t that great, but Esber believes the topic needs to be balanced against other considerations
“So many investors say: ‘If you don’t invest in big oil, you can hardly make any money’ — what if I think it’s good to just make money? Some Make money from my investments? Esper said, adding that there are plenty of investments that can make money and “won’t destroy the world.”
“There are so many ethical investing index funds out there doing better now than the most popular index funds out there,” she said.
Like most other funds in the current bear market, many ESG funds have seen their year-to-date returns in 2022 decline, but Some research from last year Shows that ESG has been more resilient than traditional index funds since the recession, as ESG investors tend to be more long-term oriented.
Esber believes the relationship between working investors and other workers is inextricable
According to Esber, not only is ESG better for the environment, workplace diversity, and labor rights, but ESG investing can also be a source of empowerment when investors are members of the same communities affected by those investments.
“Investing based on your values is something I’m really passionate about, especially for communities of color,” Esper said. “We want to help the younger generation learn how to build wealth and invest. But if they put all their money into a company like Walmart — that’s giving our community bad, low-wage jobs with few benefits – Then there are still people who have to do those jobs. We’re just continuing the same cycle.
This leads to “some people in our community that are better off, but others are worse off,” Esper said, adding that without conscious investment, companies that make the world a worse place will only be will continue to grow.
“I really want to invest in companies that have high-paying jobs where workers have a union that provides benefits to employees,” Esper said. “And it’s hard to be perfect, but I do think that the more we invest based on our values, the more companies will take notice and start changing their practices to continue to attract investors.”
“This is the next phase of the personal finance movement,” she added.
