Tuesday, October 29, 2013

Socially Responsible Investing Tips


What is it
Socially responsible investing or sustainable and responsible investing (SRI) involves investing in companies that take into consideration environmental, social and corporate governance criteria such as environmental controls, community development, workplace diversification, labor relations and human. Industries involved in SRI include hospitals, public and private sectors, nonprofit organizations and religious institutions.   

SRI Companies
Several companies’ use SRI investing strategies - the most popular company is Calvert. Other companies include GoodFunds, Krull and Company, Green Century and Domini. Some companies require a minimum investment of $250,000 while others offer customized portfolios on a retainer basis.

Tax Benefits
There are SRI funds with tax benefits and some without. I recommend investing in funds that offer tax benefits. Check with your financial advisor for specific details.

Pros and Cons
SRI funds are often perceived to be riskier because a higher percentage of shares are held in small and medium sized companies which tend to be more volatile.  Typical disadvantages include lack of diversification and poor performance. However, SRI investment strategies are competitive with non-SRI strategies and can still allow investors to meet their financial goals.

Investors may not be allowed to pull out money at will and may be required to keep the money in for a certain period of time.  Investors may also have limited control over how their money is used. Some SRI funds charge higher fees such as an annual expense ratio and upfront sales charge, however some do not.

Investing Tips
Here are 9 tips to help you decide on SRI investing.

  1. Decide where you want to invest, how you will invest, when you need the money, what you need the money for and how long you want to invest.
  2. Identify your top socially responsible views and invest in companies that support them.
  3. Diversify investments and ensure you are comfortable with the allocations.
  4. Allocate a small portion of investments to clean technology.
  5. Put pressure Congress to generate socially responsible policies.
  6. Define your risk tolerance, investment goals and objectives.
  7. Decide how you will implement your investment strategies:  direct investments, petitions and dialog, awareness, screenings, activism or other factors.
  8. Increase demands on companies to be socially responsible through shareholder resolutions and meetings.
  9. Ask fund managers whether or not they expect performance to be similar to standard benchmarks or considerably different.

Friday, October 25, 2013

Financial Advice for Domestic Violence Victims

October in National Domestic Violence Awareness Month.  Domestic Violence comes in many forms: physical, sexual, financial, emotional (verbal) or threats or violence.  Domestic violence also includes behavior that can intimidate, hurt, humiliate, injure, blame, scare or harass someone.  If you have been a victim get professional help via a counselor, therapist, pastor or psychiatrist.  Domestic violence can have a tremendous impact on your life and the life of your children.  Getting help is the only way to gain strength to prevent being abused again.  Every 9 seconds a woman is assaulted.  Most domestic violence cases are never reported to the police. Women ages 20-24 are at the greatest risk for domestic violence. I was a victim of domestic violence and didn’t tell anyone until after I ended the tumultuous relationship. I am so ashamed and embarrassed to tell anyone what I was going through.  I have recovered and am now aware of the warning signs. Luckily we did not live together so my finances were not affected.

If you are someone you know has been a victim of domestic violence encourage them to leave their current situation and get help. Here are some financial tips to help former or current victims of domestic violence.  According to the National Domestic Violence Hotline these are signs of domestic violence.

Emotional Abuse:

  • Calls you names, insults you or continually criticizes you.
  • Does not trust you and acts jealous or possessive.
  • Tries to isolate you from family or friends.
  • Monitors where you go, who you call and who you spend time with.
  • Watches your time, how you long it takes you to go somewhere and come back.
  • Does not want you to work.
  • Controls finances or refuses to share money.
  • Punishes you by withholding affection.
  • Expects you to ask permission to do something.
  • Threatens to hurt you, the children, your family or your pets.
  • Humiliates you in any way.
  • Yells at you and then later apologizes.

Physical Abuse:
  • Damages property when angry (throws objects, punches walls, kicked doors, etc.).
  • Pushed, slapped, bitten, kicked or chokes you.
  • Abandoned you in a dangerous or unfamiliar place.
  • Scared you by driving recklessly.
  • Used a weapon to threaten or hurt you.
  • Forced you to leave your home.
  • Trapped you in your home or kept you from leaving.
  • Prevented you from calling police or seeking medical attention.
  • Hurt your children.
  • Used physical force in sexual situations.

Sexual Abuse:
  • Views women as objects and believes in rigid gender roles.
  • Accuses you of cheating or is often jealous of your outside relationships.
  • Wants you to dress in a sexual way.
  • Insults you in sexual ways or calls you sexual names.
  • Has ever forced or manipulated you into to having sex or performing sexual acts.
  • Held you down during sex.
  • Demanded sex when you were sick, tired or after beating you.
  • Hurt you with weapons or objects during sex.
  • Involved other people in sexual activities with you.
  • Ignored your feelings regarding sex.

Here are 14 financial tips to help you get back on track with your finances.

  1. If you are entitled to child support and/or alimony get it
  2. Open a savings account and contribute regularly, save enough to cover bills for 12-18 months
  3. Pay bills online
  4. Use direct deposit
  5. Open a new checking account with overdraft protection
  6. Control your spending, reduce spending by 30-50%, trade in your luxury car for a cheaper model
  7. Start a retirement account
  8. Update beneficiary information yearly
  9. Open one new account in your name
  10. Close any joint accounts and cancel the cards
  11. Purchase life insurance for you and your children
  12. Remove your name as an authorized user from joint accounts
  13. Create a will
  14. Develop a support network to get advice, support and encouragement

Here are some resources to help you get out of your current situation.

  1. www.thehotline.org or call 800-799-7233
  2. ncadv.org/resources/StateCoalitionList.php
  3. ncadv.org/resources/OtherUSOrganizations.php

Monday, October 21, 2013

How to Survive with Bad Credit


Due to the recession and recent government shutdown some Americans have bad credit. If you have bad credit you will probably be denied for credit. However, there are some companies that may give approval but it will be at a high cost. 

Being in debt affects your credit score either negatively or positively.  If you pay your bills on time you credit score will increase, if you don’t it decreases.  Seventy-nine percent of all credit reports contain at least one error and 75% of all credit reports contain one major error which can lower your credit score.    

Bad credit is a score usually 670 or below but varies depending on the creditor.  Bad credit prevents you from getting approval for a student loan, mortgage loan, business loan, or personal loans.  Bad credit affects:  getting hired for a job, interest rates, terms and conditions, getting capital to start a business, insurance rates, renting, ability to generate wealth, ability to get access to programs tailored to those with good credit, affects your relationships and credibility with service providers and employers and thwarts you from achieving your financial goals.

Bad credit and being in debt can also cause you to lose focus, cause anger, anxiety, stress and health issues.  Debt can affect relationships with friends, family or your spouse.  One of the biggest causes of divorce is due to finances.  Paying down debt can eliminate those negative feelings and improve your relationships as well as your credit score.

Using credit is a balancing act and most Americans don’t balance it very well which is evidenced in the amount of debt owed by Americans and their low credit scores.  If is crucial that you pay back any debt owed starting with delinquent accounts, especially if you plan on applying for credit in the future.  Paying down debt also prevents legal action taken against you for an outstanding debt.

Some creditors assume that if you have bad credit you may be irresponsible in other areas of your life such as taking care of an apartment or showing up for a job, committing crimes, etc. If you are looking for a job a potential employer may see you as a security risk because you may be more likely to commit a crime, steal from the company or commit fraud.  This is usually not the case for those looking for work and is unfair but is the norm for some employers.
If you have bad credit you may pay hidden fees, are more likely to be a victim of predatory lending, may have to pay upfront fees and have no negotiating power and have take what is offered to you.  If you have bad credit you need to reevaluate your spending habits. Pay down debt as soon as possible to help increase your credit score and improve your financial future. Don’t let your credit hold you back.  Order a copy of your credit report at least once a year from the 3 major credit bureaus: Experian, Equifax, and TransUnion at annualcreditreport.com or call 877-322-8228. Here are 14 effective tips to help you when applying for credit or a loan with bad credit:

  1. Know your credit score - beware of predatory lending, fraud and scams based on your low credit score when applying for a loan or credit card
  2. Pay – pay for all items with cash, checks or money orders or prepaid cards
  3. Cash payments - do business with companies that accept cash payments
  4. Secured - apply for a secured credit card www.bankrate.com
  5. Renting – look for vacancies in the newspaper or Craigslist who may be more lenient with those with bad credit
  6. Mortgage – provide a 20% down payment or use manual underwriting which can be costly due to higher fees and interest rates
  7. Car – purchase from a private lender or classified ad, buy used vs. new, large down payment
  8. Cell phone – get a prepaid phone from company such as T-Mobile or Sprint
  9. Employment – not all employers view your credit report, notify a potential employer of any issues, specific industries may automatically deny you employment
  10. Get help - get a co-signer to sign for a loan or help you obtain a credit card
  11. Entrepreneur - start your own business if you can’t find a job
  12. Banking - get overdraft protection to avoid bank fees and prevent reporting in bad check systems such as Chek Systems or Tele Check
  13. Credit union - get credit union financing which may be more willing to work with a customer versus a traditional bank
  14. Alternative financing – use Peer to Peer Lending with sites such as: Prosper, Zopa, Dwolla, Lending Club