Pope Francis and Eliminating Waste in Your Endowment or Retirement Account

A little over 1 year ago Pope Francis addressed “every person living on this planet” with his encyclical “Laudato Si”; Praise be to you, my Lord.

Many refer to it as an encyclical on the environment, but it is so much more than that! The Pope explained that extreme consumerism, materialism, and poverty are not really economic problems, but rather ethical and spiritual ones.

The Pope instructs us not to waste food or resources of any kind, not just for the sake of reducing our carbon footprint, but to build a culture of solidarity with the poor and as gratitude for this wonderful paradise God has given us to steward.

Production Line Waste

When we waste food, we waste money, resources and we directly harm the Earth. It’s a viscous cycle!

It’s more than putting leftovers in “doggie bag” bag. When we waste a meal, much more than food is wasted. Not only does $5.00 or $10.00 in food go in the garbage, it’s a huge waste of natural resources that simply disappear. The Pope is not just talking about money, but a complete waste of resources all the way down the production line. Some examples are:

1. Lack of respect for the 40- 60 hours of work each week parents dedicate to purchase food
2. Lack of respect to the person who prepares each meal
3. Lack of gratitude for the energy used to microwave or prepare food on the stove
4. Unaware of the resources used to transport, stock, insure and keep food fresh
5. Wasted energy to plant, water, fertilize, harvest, dry, store, insure, transport, mill, bake, package etc.

The Pope explained that extreme consumerism and poverty are not really economic problems, but rather, ethical and anthropological ones.

As an investment advisor, I feel called to challenge readers to spend 1% of one week looking for ways to uncover and eliminate 1% of waste in your retirement account or endowment fund. Depending on account size, a 1% savings can accumulate to six figures in about a decade.

The savings from wasted resources can be redirected to charitable endeavors like the Corporal Works of Mercy and other worthy causes. Depending on your age, you may not be able to draw money from your retirement account today; so do it for the poor person you meet in the future!

A 1% Spiritual Challenge: There are 168 hours in a week, so 1% of that is roughly 100 minutes trying to figure ways to reduce wasted expenses. Bring your investment statements in front of the Blessed Sacrament for 100 minutes and consider it a form of prayer. Most people can find ways to reduce their mutual fund fees by ½% of 1%; and their advisor fees by ½% of 1%.

Don’t worry, it’s worth it! It’s not just about finding a ½% here of ½% there. In some cases, depending on your account balance and the annual fees charged by the company holding your 401(k) or Individual Retirement Account, there can be savings of more than $500 per month, which if compounded at 6% annually can add up to a six figure savings over 10 years.

It’s not a one time savings; it becomes additive every year and compounds at the returns of the stock market. Your savings grow tax deferred in your retirement account.

In summary, we recall that Pope Francis wants us to put an end to our throw-away society and grow in solidarity with the poor.

The Pope says: “We must remember that when we waste or throw away food, it's as if we're stealing it from the table of the poor. From those who are hungry! I invite everyone to reflect upon this problem of waste, so that solutions to this problem can be faced with seriousness. May the solutions lead us to a culture of solidarity and sharing with those who need it most.”