Category Archives: Money

Saying Goodbye to Shampoo

Kamisuki (Combing the hair), A colour woodbloc...

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Conventional shampoos are no friend to you or to the environment.  They’re full of chemicals such as sodium lauryl sulfate and parabens that irritant your skin and strip your hair (in addition to posing other health risks).  These ingredients also pollute the air and water in their production and when you wash them down the drain.

So when I finally used up the huge bottle of Pantene I’ve had the last two years, I decided to try the “no ‘poo” method.  I’ve been cleaning my hair with baking soda and conditioning with apple cider vinegar for three weeks now.

The result?  My hair is no better and no worse than before.

On the plus side, my hair seems to need less washing.  I used to shampoo every other day but now every three or four days seems to be just fine, which makes me happy since I like being able to do less.  And besides not adding chemicals to my body or the environment, other benefits include buying fewer plastic bottles and saving money.  Baking soda and vinegar are pretty cheap!

But alas, all is not perfect with the no ‘poo method.  I need to mix the solutions each time I wash which is a bit of a pain.  I’ve tried pre-mixing but I hated pouring cold water over my head (especially in the winter).  In addition, I now have to separately condition my long hair when my old Pantene was a shampoo and conditioner in one.  And lastly, I have to admit that I miss the lather and the nice scent of shampoo.

But in the bigger scheme of things, I’m willing to live with these small downsides in light of the environmental and financial benefits of washing with baking soda and vinegar.

If you’re interested in trying this simple method,  here’s what I do:

  1. Mix 1 tablespoon of baking soda with 1 cup of warm or hot water.  Shake well.
  2. Wet hair with water.  Pour and massage baking soda solution onto scalp and hair.  It will not lather at all but may feel slippery.
  3. Rinse well
  4. If you want to condition, mix 1 tablespoon of apple cider vinegar with 1 cup of water.   Pour over your head and work into hair.
  5. Rinse well.  Don’t worry the vinegar smell will dissipate quickly.

It’s really quite easy but you may need to play with ingredients a bit to find something that suits you.  For instance, you may want to use less baking soda if 1 tablespoon is too drying.  Or if the smell of vinegar is really intolerable, you could replace it with lemon juice instead.  See this post for a detailed guide and FAQs regarding the no ‘poo method.  There’s also a forum devoted to this topic if you want more info.

If you try it, let me know how it goes!  If you don’t, at least consider switching to a more natural shampoo.  Your crowning glory and mother earth will thank you.

Impact Investing: Make Money While Doing Good

Slow Money

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How would you like to help a fair trade farmer in Costa Rica, or build affordable housing in Chicago, or provide venture capital to a solar lamp company in India, all while growing your money?  In the emerging field of impact investing, you can make a difference in the world while making money at the same time.

Impact Investing is a cross between philanthropy and investing.  You’re putting your money with businesses and organizations that not only seek to make a profit (or at least be self-sustaining in the case of a non-profit) but also do some social or environmental good.  It’s a way to harness private enterprise and private money in meeting some of the world’s toughest challenges.

With impact investing, your money generates not only financial returns but also social/environmental returns.  For instance, by supporting microenterprise, small farmers, or renewlable energy, you can help alleviate poverty, promote healthy agriculture and food systems, and reduce green house gas emissions.

It sounds great but before jumping in with both feet, you need to consider a few things:

  • Risk – these investment products are not insured or guaranteed in any way.  There’s a chance you can lose all your principle or make a lot of money.  It’s your responsibility to assess the risks involved and decide if it’s suitable for you.
  • Return – financial returns on these investments vary greatly, from very small (i.e. almost nothing) to hitting the jack pot.  As with all investments, the higher the risk, the higher the potential return is.  But in general, people are not in impact investments to make a huge profit.  It’s the triple bottom line of people, planet, and profits that matters.
  • Impact – how do you know your money is really making a difference?  This nascent field is still honing industry wide standards, ratings, and reporting tools to measure social and environmental results.  Regardless, every legitimate investment will provide regular documentation of its financial and social/environmental performance.  You should scrutinize these reports to see if the investment is measuring up to your standards.

With all that in mind, if you want to investigate further, your options depend on how much money you have.

At the level of the average middle class investor, the way to participate in impact investing is primarily through lending.  You lend money to an organization that provides funding for various purposes such as community development (affordable housing, small business start up, etc.) and international development (often microenterprise).  In return, you earn interest comparable to CDs.  From what I’ve seen recently, rates range from 0%-3%, depending on the terms of the loan.  But remember that unlike CDs, these loans are not insured but the risk of default is fairly low.

Here are a few resources if you’re interested in investigating further: Microplace allows you to invest as little as $25 to help fight poverty and promote fair trade and environmental initiatives in developing countries.  To make investments in the U.S., Slow Money (yes it’s related to the Slow Food movement) has a good list of possible investments for various income ranges.

If you’re a very wealthy and sophisticated investor, there are more options available to you.  As an accredited investor, you can invest directly in private equity, debt, and real estate.  Their social focus range widely, from land conservation to charter schools to clean technology.  Here the financial risk and return can be high.  It’s not uncommon to see required minimum investments of $100,000 that need to stay invested for 5+ years.

If you qualify as an accredited investor, get started by looking into Investor’s Circle, a membership organization of individuals and institutions focused on funding triple bottom line businesses.  Impact Assets has a list of 50 funds that focus on impact investing – another good place to start researching.

Now impact investing is not a replacement for charitable giving.  Philanthropy is important and necessary.  It’s probably the most appropriate way to combat problems that don’t lend themselves to market solutions such as domestic violence and disaster relief.  But philanthropy alone is not enough.

In 2010, total charitable giving in the U.S. was estimated to be $290.89 billion – this includes individual, foundation, and corporate giving.  In the same year, investable assets of U.S. households alone was $30.2 trillion.  This doesn’t include the funds of institutional investors such as endownments, pensions, and foundations.  If individual investors in the U.S. put just 1% of their money into impact investments, that’s an additional $300.2 billion that can be channeled towards positive change in the world.

So consider if impact investments have a place in your investment portfolio, both for your benefit and for the greater good.

Support Good People Doing Good Things

Cambodia Event (c) WWFMoeun Morn Joining Hand...

Image by Earth Hour Global (Cambodia) via Flickr

I came back from Cambodia a few days ago.  It was a lovely trip, full of ancient temples, tasty food, and friendly people.  Of course I also encountered some of the problems still facing Cambodian society.  Seeing victims of landmines with missing limbs as well as warnings about criminal penalties for having sex with children are stark reminders that serious problems persist.

Last week I wrote about giving to charity without opening your wallet.  But if you do have the ability, consider giving some money to organizations that address significant issues at home or abroad.

We all know that the world is rife with challenges, from pollution to violence to poverty.  Many good organizations exist to meet these challenges.  A blog post I once read said, “instead of complaining about bad people doing bad things, support good people doing good things.”  That’s precisely what your financial donation to sound charities can do.

I’ve been a long time supporter of the Global Fund for Women and the Environmental Defense Fund.  I’m not a big donor who gives thousands every year.  But I give what is appropriate for me and trust that my support contributes to the betterment of the world.

If you are unsure about what organizations to give to, ask yourself what causes you feel most strongly about and then find good non-profits that work in those areas.  Charity Navigator is a great site to help you find and evaluate charities.  See their video on how to choose a charity.

In addition, here are a couple of good articles from the New York Times:  Giving Where It Works highlights some great organizations that really have an impact in the U.S. or abroad.  Crowd Funding is about smaller scale giving, often directly to people in need, that provide you with more involvement and effectiveness for your funds.

You can make an impact with your financial resources, no matter the amount.  Lend a helping hand and together, we can make the world a better place.

Give to Charity Without Opening Your Wallet

The Giving Tree

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“We make a living by what we get, but we make a life by what we give.” – Winston Churchill

‘Tis the season of giving but in tough economic times, many of us find ourselves strapped for cash.  If donating money is difficult right now, don’t fret, you can still contribute to the greater good.  There are plenty of ways to give that doesn’t involve money directly.  Below are 5 ideas.

  1. Donate your stuff.  Declutter and give items in good condition to a non profit that can use them.  Some organizations such as a homeless shelter can use clothes or housewares directly but others such as Goodwill sell your donations to fund their programs.  Either way, call the non-profit first to find out what they need and what they cannot accept before you bring your things.
  1. Click on a website.  These site have sponsors that will give a penny or two to a good cause for each time you click on a button which leads to some ads.  Sure, it’s not a lot of money but it really adds up when lots of people click everyday.  Care2 has different causes you can click on along with informative articles about affecting change in the world.  For a more comprehensive listing of different click to donate sites, see One Click at a Time.
  1. Give a part of you.  Consider donating blood or register to be a bone marrow donor.   You can literally give someone a second chance at life.  The bone marrow registry is in particular need for people of non-European ancestry as patients have the best chance of a match from someone of their own ethic background.  If you’re squeamish about needles like I am but have long hair, consider giving your hair.   It can be made into wigs for women and children who’ve lost their hair from cancer treatments or other medical conditions.
  1. Donate miles.  If you find frequent flyer miles to be difficult to use like I do, why not donate them to a charity instead of letting them expire?  Many major airlines have donation programs that allow you to give miles to charities they partner with such as Doctors without Borders.  If your airline is not mentioned in the above link, go to the airline’s site and log into your frequent flyer account.  Look for “donate miles” as an option or search for the term.  Be aware that some airlines specify a minimum donation, such as 1,000 miles.
  1. Volunteer.  Your time and energy may be worth even more than your money.  Whether you have 10 minutes, half a day, or a whole weekend to spare, there’s a way to help.  Enter your interest and your city in Volunteer Match and the site will give you a list of opportunities.  If you’re super busy, try micro-volunteering online through Sparked.com.  You can help without even leaving your computer!

Several years ago I did a winter coat drive at work which netted lots of warm clothing and it cost me only a little time and a little gas money to deliver the goods.  Giving to charity comes in so many forms.  It’s limited only by your imagination, not what’s in your wallet.  Pick what works for you and know that no matter what your financial circumstances, you can make a contribution to others.

Happy Holidays!

Creating Financial Stability Part IV – Generate Multiple Income Streams

Streams (Yourou Waterfall)

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This is the last post in a four part series on what you can do to cultivate stability and peace of mind in your financial life.

Cultivate additional income streams.  I used to think that people who are concerned about having multiple income sources are obsessed with money.  Don’t they have anything better to do?  But as time went on, I experienced unemployment myself and saw older people cobbling money together for retirement, I began to see the wisdom of having various sources of income.

Whether it’s a job, a business, or an investment, putting all your eggs in one basket is risky.  Almost all of us have experienced job loss, an investment that went under, or a business that failed.  To help increase your peace of mind, consider cultivating multiple income streams.

Here are a few ideas:

  • Get a second job if you have the time and energy.  However, don’t work yourself into exhaustion or you won’t be able to work at all.
  • Start a consulting business.  If you have expertise to share, this may be a good choice.  See this article if you’re considering consulting.
  • Earn money with your hobbies.  If you enjoy photography, you could free lance as a special occasion photographer.  If you like making stuff, sell your handicraft online at Etsy or Ebay.
  • Earn money from activities you’re already doing.  For instance, if you walk your dog, you could offer a dog walking service to your neighbors.  If you look after your own child, you could add another kid to make money and give your child a playmate.
  • Sell stuff.  What do you no longer need or want that you can sell?  Regular purging is good for you and your wallet.  You can also buy things for a bargain then turn around and sell them for a better price.  Scour garage sales and Craigslist for arbitrage opportunities.
  • Take part in clinical trials or research conducted by companies or schools.  Just be sure you read the fine print and know what you’re getting into.

It’s an investment of your time and energy to create additional income streams so think carefully about where you want to put that effort and what demand you can meet.

All the options suggested above involves working for money, essentially trading hours for dollars.  Your earning power is perhaps your biggest financial asset.  However, the day will probably come when you cannot or do not want to work for a living anymore.  Yes, government or employer pensions may be available but those are often not enough.  That’s when having other passive income is helpful.

What is passive income?  It’s money that comes in without you having to do much work  because you’ve already done the work upfront.  Be aware that it usually takes a lot of time or money or both to create and set up a passive income stream and it will still require at least a little maintenance work on an ongoing basis.  It probably also involves taking some risks and a willingness to learn and change on your part.  It is not easy or quick – if it were, everyone would be doing it.  But it can be definitely be done.

There are many ways to generate passive income.  Here are some examples:

  • owning stocks that pay dividends
  • having bonds that pay interest
  • owning real estate that generates a positive cash flow
  • writing a song or book that generates royalties with every play or sale.
  • creating content online such as videos, photos, articles, and getting paid by page views, use, or ad clicks on the site.

If you want to pursue passive income, pick strategies that are suitable for your personality and situation.  For instance, if you’re a very outgoing and socialable person, reputable network marketing strategies could be a good fit.  If you have a chunk of money laying around and a stomach for vacancies, investing in real estate might work for you.  If you’re very creative, inventing things to sell online or off could be the ticket.

To start educating yourself, Google “passive income ideas” or “passive income strategies.”  Responsible articles and sites will tell you the downsides and risks involved with any income generation technique.  Do plenty of research before you commit to anything.  Be sure not to fall for get rich quick schemes.  If it sounds too good to be true, it is.

The four main elements in this series of posts work together to build a financial safety net for you.  By living within your means, saving money for an emergency fund, getting adequate insurance, and cultivating multiple income streams, you’ll be in good shape to weather any financial storm.

Of course creating stability doesn’t happen overnight.  It’s a process that requires time and energy.  Where do you stand right now?  What do you have in place already?  What else needs to be done?  It can be overwhelming to tackle all these pieces at once so don’t.  Pick one small task that you know needs to be done and do it this week.  Pick another next week and so on.  You’ll have a strong safety net before you know it!

Creating Financial Stability Part III – Get Necessary Insurance

Category F5 tornado (upgraded from initial est...

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This is the third post in a four part series on what you can do to cultivate stability and peace of mind in your financial life.

Get adequate insurance.  Illnesses and accidents can happen to anyone.  Without appropriate insurance, you put your financial health at great risk.  More than a few families have gone bankrupt due to lack of insurance in times of need.   Protect yourself and your family from major expenses and large decreases in income.  Having adequate insurance really can avert financial disaster.

One major category of insurance concerns your health: medical, disability, long term care, and life insurance.  They help cover expenses or provide an income in case you can’t work.

The other major category of insurance involves things you own: car, motorcycle, boat, and homeowner’s or renter’s insurance.  They cover damage to your property and also liability if you caused injury to others.

Insurance is a complex topic.  Each of the different types have their own rules and quirks.  It’s very important to become educated about insurance so you can purchase policies that are right for you.  Here are a couple of resources to help you get started: Consumer Action’s Insurance Center and the National Association of Insurance Commissioner’s Insure U.

Besides being complicated, another common complaint about insurance is the cost.  Yes, those premiums do add up.  But don’t be penny wise and pound foolish by skipping necessary coverage.  Here are some strategies for keeping costs under control.

  • Only buy necessary insurance.  Remember, the point of insurance is to protect against big financial losses and expenses.  Life insurance for children, for instance, is an example of unnecessary insurance.  Loss of a child is emotionally devastating but unless your child is a star and her earnings are supporting the family, her death will not create a huge financial loss.
  • Get the coverage you need and nothing more.  Over insuring is a waste of money.  Review your coverage every couple of years to make sure you’re not over or under insured.  If the current replacement cost for your home is $200,000, don’t get a policy that covers $300,000 in replacement costs.  If you’ve had the same life insurance for the last twenty years, you probably need less or none at all now that your kids are grown and on their own.  But if you’ve just had a baby, you might need to get or to increase life insurance coverage.   Also eliminate any duplicate coverage.
  • Self insure for small losses such as a broken window or a doctor’s visit.  Save the insurance for bigger expenses such as fires or surgery.  Filing claims will drive up your insurance premium so pay for the smaller things yourself.  If you increase your deductible (the amount you pay before insurance kicks in), you’ll also lower your premium.  Just make sure you have money allocated in your spending plan for these smaller expenses.
  • Use the same insurance company as much as possible for all your insurance needs.  You’ll get discounts for having multiple policies.  Also be sure to ask what other discounts are available to make sure you’re getting the lowest rate possible.  Every couple of years, comparison shop to see if you can get better rates else where for the same coverage.  Just be sure the insurance company is highly rated for financial strength.  It’ll do you no good to get a cheap policy from a company that can’t pay benefits.
  • Take care of what you’re insuring.  If you maintain good health, your medical and life insurance will be cheaper.  If you maintain your car, you’re less likely to have an accident due to mechanical failure.  If you take good care of your house, it’ll stand up better to the elements and natural disasters.

Here are some resources to help you shop around for insurance.  Be aware that you do need to provide some personal information to get quotes and insurance agents will follow up with you.

General: insweb.com, insure.com
Auto: insurancerates.com
Life: accuquote.com
Home: accucoverage.com

It may seem like a waste of money to pay for insurance when everything is fine but you’ll be glad you did if anything unexpected should happen.

Creating Financial Stability Part II – Build An Emergency Fund

A Peach-faced Lovebird putting a coin into a p...

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This is the second in a four part series on what you can do to cultivate stability and peace of mind in your financial life.

Have an emergency fund.  It helps you meet any large unexpected expenses and ties you over in case of job loss or income reduction if you’re self-employed.  Financial pros often recommend having 3 to 6 months of expenses saved up.  You’ll have to look at your own situation to determine if that’s appropriate for you.

If you’re in a line of work where you’re in very high demand and you can easily find another job or customer, then perhaps you only need 3 months of expenses saved up.  But if you’re one of five paleontologists in the country, you should probably have one year of expenses saved up.

If you’re married, you should also look at your spouse’s work situation.  If they’re in a different field and their income stability and prospects are good, a smaller emergency fund for the family may be good enough.  If they’re in the same line of work as you and vulnerable to the same economic cycles, a larger emergency fund is necessary since you may both be out of work at the same time.

Keep your emergency money in a savings account or in cash equivalents such as CD’s and money market accounts.  Because you may need it at any time, you don’t want to invest this money in something that can fluctuate wildly in value or be inaccessible when you need it such as stocks or real estate.

Stay tuned.  In the next post I’ll cover insurance, another key to financial stability.  It may not be sexy or exciting but it is important.