Investors are king. They are an anonymous mob (when banks like it) that can move around their money inflating and deflating parts of the economy. Banks say they need protection, of course they are a major source of income for banks, who like to fleece them if they are small, and use the bullying power if they are big.
It may have been a dutch invention, the East India Company emitted shares and thus financed it’s endeavours in the East. It was one of the first of the boom/bust pump and dump scams of which many have since followed. The main reason is that a share of a company can have more or less value, even without looking at divident. The New York exchange even had so called phantom shares, of companies that no longer existed until the regulators decided to split the profits and remove them.
Investors can do many different things, but the investment market is structured such that most will opt for a fund or share or something like that, offered to them by neat bank employees accompanied with a neat prospectus. What does investment in a share mean? That you in theory have part ownership of the company, that you can see returns if more people want to own the shares. Existing shares have no influence on the companies themselves, at least not if the company is not deeply in debt. Only when they are sold does it matter to the company what you think of it. Afterwards it will only care when it wants to sell more shares. It can go bust, your money has been collected already. This is why there was a .com bubble. The companies collected cash, and ‘burned it’ at a ‘burn rate’ (and investors accepted this as a good thing!) crashing, then leaving the investors with worthless shares!
Today there is a much better option, but it has not been structured for the public in the optimal way yet. It is of course renewable energy and storage, climate action in general. If you accept that fossil is on its way out and would like to survive the next century (3/4 of humanity is now expected to go extinct in the next 100 years!), you would do well to put every cent in renewables. Saving money is not meaningfull if your money is carbon credit. You want to create the means to keep you alive by investing, this is the key to survival and a good pension.
If you keep betting on all kinds of wastefull economic plans sold to you by the neat looking bankers, you’ll find that farmland will dry up, floods, rains and hales will destroy your car, house, roofs. Fossil will run out and society will stratify into a majority of desperate people and a tiny elite that doesn’t care about them (Trump sets the trend). Don’t expect to belong to that elite. You need to invest in what will make the future work, which is not fossil, not gas, oil or coal, not intensive farming, not big industry.
Even with current incentives solar yields more than 6% annually, so it is a no brainer compared to a savings account. But you are not beyond comprehending the real play of this century, which is to extract yourself from any fossil fuel dependence, because then you can 1. Own your food and wealth security 2. Prevent having to deal with all kinds of problems as now expected. 3. Have a better return, because you don’t only get the actual return but also the reduction/elimination of negative side effects and prices.
You can argue that solar prices keep dropping and you will not get your investment back, but you will be profiting from the cheaper solar what is invested in after you do, because the energy they produce will make products and services cheaper. The money you get in return will go further until you will find that government decides to give you a basic income based on renewables. But you need to invest. You need to ask your pension fund to invest also in the energy sources that will be used to make what you need when you want to spend your pension money.
We need to simplify the system a bit. Investment has to be channeled so it goes to productive or resource increasing activities. Now a lot of investment is meant to disappear money (your money) in order to reduce fossil fuel consumption. You should be able to invest in a global solar fund which builds solar PV and Themal installations at a return of about 5%, maybe more. In fact most renewable technologies can be standardized, say solar, wind, geothermal, wave, tidal systems are all pretty much evolved to a level where you can know what they can do. Then you should be able to invest in the wholesale transiton of your own region, which is the smartest thing to do because this is where you will be spending your future money.
If we look at all assets in terms of wealth creation, and I mean not the creation of expensive products, but of usefull resources like food, water, arable land, timber, then you will find that the financial system selling you investments is actually a big machine that tries to achieve as little as possible while destroying natural resources. Why? Because if you have consolidated a cycle of real wealth creation and destruction by consumption, the demand for fossil fuels, and thus fossil fuel credit, will die.
Some authority, maybe the UN, should create a small number of funds to invest in, with a clear return (just for your anxiety). They should invest directly, without bank invervention in wind, solar, wave etc. More or less standardized installations. The land used must be owned by the countries involved, not in some private hands that will push up the price. Then of course there still can be tenders for the work. You can also invest in specific regions.
The investment/return model as we know it today is not sustainable as we transition away from renewables, unless you for instance invest in wind/fertilizer plants in Ethiopia and the grains are shipped to where you are. Investment has been an abstract multiplier (for some, not for most), and this will change. You will see that it starts to matter more what you actually know about the real world, and as you invest, you may see that your investing real assets already owned, not money. Until we get there there must be an attempt to channel your funds now ready for investment so it is not put into ‘storage’ (long term bonds) or projects that will increase emissions and extend the domination of banks and fossil fuels.
Tesla shows that a enormous amount of money is waiting in the sidelines, but usually in small quanties of so called ‘cash’, which is money that doesn’t have to have a return or does not have to be returned as payment for debt. This money, that individual citizens can control without interference, is the key to a rapid transition. Put it into projects that produce real wealth. And vote for people that propose to make rules that force you and banks to do so.