We built Finite so that anyone with $500 could put their money to work for the climate, just by investing in their own future. That means we’re attracting some new investors who haven’t invested in funds before, or maybe haven’t invested at all.

If you’re one of those investors, we appreciate that you’re navigating a lot of new terminology. We wrote this piece so you don’t have to Google everything. Here’s how we explain SOLRX to our friends and family who aren’t already deep in the finance weeds.

(Note: you’ll notice that this article is peppered with disclosures and caveats required by our compliance team. It’s surprisingly difficult to write a piece that’s accessible to inexperienced investors without being required to include language that’s, well, not accessible to inexperienced investors…but that language is included for your protection, and we did our best to keep it simple. Thanks for bearing with us.)


So…what do these “investment funds” actually do?

Great place to start. Say for whatever reason, probably a good one, you’ve decided to start investing.

Welcome to analysis paralysis. You could pick one stock to start with, but what if it loses value? What are bonds, are they better than stocks? Who has time to do all this research? Can’t someone just do it for me?

That’s where investment funds come in. When you buy fund shares, you pool your money with other investors and let a team of experts decide how to invest it. Hopefully you’ll make up for any fees you pay with better returns than you’d get on your own. That’s the goal.

A fund’s performance isn’t just a factor of numbers rising or falling. Each fund compares its performance to a “benchmark,” or a group of stocks or bonds that represents the part of the economy where the fund invests. “Beating the market” means a fund outperformed its benchmark.

Some funds perform consistently. As of 3/31/22, these nearly 50 mutual funds beat their benchmarks for each of the last 1-, 3-, 5-, and 10-year periods.

(Compliance Note: these fund examples are not intended as a comparison to any other fund’s performance, including that of SOLRX. The examples are included for educational purposes, to illustrate that regardless of expertise, fund performance can vary significantly.)

Other funds are harder to predict. Imagine the most talked-about hypothetical fund manager of the modern era. Let’s say their flagship fund tracked its benchmark for a few years then exploded into headlines when its share price skyrocketed the same week lockdown hit. Let’s imagine that exactly 11 months later it abruptly started cratering, and the imaginary fund that people once thought was unstoppable just finished the first 3 months of 2022 with the worst performance of any stocks-focused fund in the entire country. We’ll see what the future holds for reality-based funds like this one.

If you’re a visual learner, this hypothetical fund manager wanted the dark green line to go up faster, and go down slower, than the light green line (the hypothetical benchmark).


The lesson here is that investing money always involves some risk, and not even the top funds can guarantee you otherwise, but we’ll explain why that’s not actually a problem. Now that you understand what funds do, we’ll show you how funds help people manage that risk.

(Compliance Note: the hypothetical fund pictured above is included for educational purposes only, to illustrate that fund manager expertise cannot protect investors from risk, and to demonstrate that past performance is not an indication of future performance. This is not intended as a comparison between imaginary fund performance and that of any other fund, including SOLRX.)


If funds can’t guarantee risk-free investing, then why would I invest at all?

Because risking some short-term investment losses can, potentially, shield you from broader financial risks that have devastating consequences over time. Risk is a fact of life – the key is how you manage it.

We can’t offer you investment advice, but we do want you to understand why people commit to long-term investing – it’s often from a defensive position and not always about chasing wealth.

A red and yellow medieval shield by Erik McLean on Unsplash.

Long-term investing could potentially protect you against inflation.

Inflation is the reason why a dollar today can’t buy as much stuff as it used to. It’s a decrease in the purchasing power of money, and it grew more than 8% in the last year – the steepest increase in more than four decades.

If you cashed your first $1,200 stimulus check and put it in a drawer for safe keeping, that money can only buy what about $1,070 would have gotten you in April 2020. That’s inflation. If you invested your money into something that grew faster than inflation it wouldn’t have lost that value.

Long-term investing can provide far better compounding interest than a savings account.

If you’re investing to protect yourself from inflation, your money might be earning interest. If you reinvest that interest in the same place, you’ll earn interest on that interest too. That’s called compounding interest.

You can earn up to about 1.25% interest on a high-yield savings account today. If you deposited $500/month into that account for 30 years, your balance would be about $218,000. If you invested that same $500/month into a hypothetical fund that averaged 7.5% annual growth for that same 30 years (the stock market averaged 9.9% annually over the last 30 years, so 7.5% would be a fund that underperformed the market), your balance today could be closer to $667,498*.

That’s a difference of nearly $450,000 after setting aside the same $500 every month. If markets are temporarily down after 30 years you would have to wait to exit the fund until things recover. That is certainly a risk, but the long-term investor would view the wait for nearly half a million dollars as less risky than never having access to it in the first place.

Long-term investing can generate passive income, giving you a priceless commodity – time.

Some types of investments regularly pay you a little bit of cash. These payments are called dividends, and the IRS views many of them as taxable income**.

If you accumulate enough income-producing investments over time, those dividends could eventually support your living costs. That passive income could be the chance to quit your day job and travel or start a venture with your extra time. If you’re retiring, that passive income could protect you from having to draw down your retirement savings.

(Compliance Note: we aren’t allowed to draw the conclusion that not having to worry about drawing down retirement savings would offer peace of mind to retirees.)

Of course, we have to reiterate that income investing carries risk, and cannot guarantee you the income you’d be targeting – but this article isn’t about investment advice, it’s to educate you on the reasons why people often invest over the long term.

Many investment funds are purpose-built to help investors achieve these goals.

If you prioritize inflation protection, compounding interest, or passive income, there are funds explicitly designed to help get you there.

Investment funds do the heavy lifting for investors and help them manage risk. Some funds, like SOLRX, can even help you invest outside of typical stocks and bonds where you wouldn’t have access on your own.


Got it. So how does SOLRX aim to generate positive financial results for the Fund?

SOLRX primarily invests in two areas: solar loans and solar stocks. The full investment strategy is more nuanced than that, but today we’ll focus on the basics***.

Solar panels in front of battery storage.

Solar loans

To explain solar loans, let’s talk about why people “go solar” in the first place – it’s usually to save money on electricity.

Power bills can change a lot throughout the year. Imagine a hypothetical person who pays between $51 and $280 each month, depending on the season, with an average bill of $148. That person could take out a solar loan that covers the upfront cost of buying solar power equipment and having someone install it on their home.

Once installed, the person replaces their power bill with the solar loan payments. This time it could be a fixed payment of $121/month. Not only are they now saving 18% on power, but their monthly power costs are finally predictable. That’s a great deal.

SOLRX buys solar loans from the companies who do the lending. When a borrower makes their loan payment, some of it pays down the loan, and some of it goes to interest (like a car payment). That interest is a key source of income for SOLRX.

Solar stocks

Solar stocks are shares of publicly traded companies in the U.S. solar industry that you can buy on exchanges like the Nasdaq. These companies might sell solar panels, develop solar-related software, install and maintain the systems, or even manage solar farms and sell the power.

If SOLRX buys shares of a solar company, and the market price of those shares goes up, then it helps the share value of SOLRX go up too.

(Compliance Note: of course, funds take on investment risk the same as individual investors, so it’s possible those shares could lose value. U.S. Solar Companies face competition from traditional regulated electric utilities, from less-regulated third party energy service providers, other solar companies, and from new renewable energy companies. The solar energy and renewable energy industries are both highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete with large traditional utilities.)

Makes sense. So how does that financial performance get back to my account?

When SOLRX is successful, typically the fund either generates income, or the share value goes up, or both.

SOLRX doesn’t want to hold onto that income. The fund’s goal is to cover day-to-day costs then pass the rest to investors. If you own SOLRX shares, under normal circumstances you can look forward to payments every 3 months – those are the dividends we talked about.

(Compliance Note: the Fund intends to accrue and declare dividends daily and distribute them on a quarterly basis; however, the amount of distributions that the Fund may pay, if any, is uncertain. The Fund may pay distributions in significant part from sources that may not be available in the future and that are unrelated to the Fund’s performance, such as from offering proceeds and borrowings. A portion or all of any distribution of the Fund may consist of a return of capital and may result in potentially adverse tax consequences to the Fund or its shareholders. Any return of capital should not be considered by Shareholders as yield or total return on their investment in the Fund.)

SOLRX investors can use their dividends to automatically buy more SOLRX shares****. The goal is to then earn interest on the original shares, plus interest on the new shares that were purchased with…interest. Rinse and repeat successfully and you’ve got compounding interest. You could also opt into collecting those dividends as cash, and there’s your passive income.


What if I’m ready to cash out?

If you’re ready to convert your SOLRX shares back to cash, you can sell at least some of them back to the fund once per quarter. Correct – this is not like being able to sell stocks or ETFs at a moment’s notice, and there are a couple reasons why.

The first is a question of a term called “liquidity.” Liquidity describes how easy it is to sell something quickly at fair market value. For example, if you wanted to sell someone a car for $10,000, and they offered you cash, you’d probably take it on the spot. If instead, they wanted to offer you rare mint-condition unwrapped baseball cards worth a verified $10,000, you’d still probably want more than $10,000 worth. You’d ask for the extra cards because you wouldn’t be sure you could find a buyer and sell them right away. After all, you can’t put baseball cards into a machine on your corner like you can with an ATM (where you literally pay fees to get cash out instantly).

It’s similar in the investing world. You usually pay a little extra for the option of being able to pull your money out immediately. We want to give investors the choice to skip that daily cash-out cost if they’re planning on holding the investment for 5+ years anyway – and SOLRX is only intended as a long-term investment.

The second is a question of regulation. If SOLRX wants to give you the ability to cash out on a daily basis, then the fund wouldn’t be able to invest as much into less-liquid solar loans. We would have to invest a much larger share of money into things like stocks and bonds in order to sell them when people want to cash out. It would defeat the purpose of this investment strategy.

You need to make your own judgment on how quickly you’ll need to pull money out to decide if SOLRX is right for you. One advantage we offer is that many (not all) funds invested in these types of private assets can require many millions upfront to invest, and can keep your money locked up for years. Being able to invest in similarly private assets with $500 upfront, and being able to apply to get at least some of your money out every 3 months, seems like a good deal to us. At least, that’s part of why we built SOLRX.

Once you sell your SOLRX shares, if the share value grew since you first invested, then congratulations – that’s a gain on your investment. You can probably deduce this yourself, but if the share value decreases from the time you buy to the time you sell, that could represent a loss. Yes. Investing has risk.

We hope this guide helps build your confidence in navigating the world of fund investing. If you decide to invest in SOLRX, we hope this helps you make sense of your statements.



*This example does not represent an actual investment, and is not investment advice, nor a forecast or guarantee of future results. Illustrations of hypothetical principles have inherent limitations and cannot account for future economic conditions. The example is presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors.


**Finite does not provide tax or legal advice. Of course, you should consult with your individual tax or legal professional before taking any actions that could have tax or legal implications.


***The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its Managed Assets, directly or indirectly, in alternative-lending related securities and other investments issued primarily for solar financing, including credit instruments related to the development, purchase or installation of solar energy equipment or the purchase and lease of renewably generated electricity and securities of solar finance companies, specialty finance companies and other solar industry participants.

The residential solar energy industry is constantly evolving, which makes it difficult for Solar Loan Originators to evaluate prospects. Solar Loan Originators cannot be certain if historical growth rates reflect future opportunities or whether growth anticipated by the Solar Loan Originator or industry analysts will be realized. If the markets for residential solar energy do not develop at the rate expected, a Solar Loan Originator’s business may be adversely affected.

The alternative energy industry can be significantly affected by obsolescence of existing technology, short product lifecycles, falling prices and profits, competition from new market entrants and general economic conditions. This industry can also be significantly affected by fluctuations in energy prices and supply and demand of alternative energy fuels, energy conservation, the success of exploration projects, tax incentives, subsidies and other government regulations and policies.


****Any distributions reinvested will nevertheless remain subject to U.S. federal (and applicable state and local) taxation to Shareholders. There can be no assurance that the Fund will be able to pay distributions at a specific rate or at all. The amount of actual distributions that the Fund may pay, if any, is uncertain. The distributions will be paid from net investment income (including excess gains taxable as ordinary income), if any, and net capital gains, if any, with the balance (which may comprise the entire distribution) representing return of capital. Also, distributions will be prohibited at any time dividends on the Fund’s preferred stock, if any, are in arrears.