I have had a non-retirement account with Zecco and a Traditional IRA and Roth IRA with TradeKing for a few years, ironically, and have frequently mentioned both here.

At first I was surprised at the news, but I really shouldn’t have been surprised at all. The merger makes a lot of sense for the two companies – they offered identical prices for trades – $4.95 per stock or options trade and $9.95/$10 for mutual funds, both were strictly online brokers, and they are up against larger, well-funded, formidable competitors. Heck, the CEO’s of each respective company first met in middle school and then worked together at a prior employer, so perhaps it was destiny that they join forces again.

I don’t see any downsides to the merger just yet. Online discount brokers compete on price, service, features, and offerings. In this case, they have the same trading prices (and have confirmed they won’t change), both have good service and features, and the investment offerings should only expand with a merger.

I do have three questions that have not yet been answered through their merger FAQ’s yet:

1. Will the merged company adopt Zecco or TradeKing’s annual IRA fee? My IRA is with TradeKing because they don’t charge a fee, while Zecco charges a $30 fee. I hope they opt for TradeKing’s fee structure.
2. Which interface will they adopt? Both are good, but I prefer Zecco’s a bit more and the Zaptrade tool is pretty awesome.
3. Which customer service team do they model? TradeKing has been ranked #1 in customer service for three years in a row in SmartMoney magazine’s broker rankings (2010, 2011, 2012). My experiences with Zecco customer service have been great, but with TradeKing’s service reputation, it seems natural that they might adopt the TradeKing model.

Even though the merger has not been officially approved by regulators yet, it seems likely to go through as the combined company won’t have a new-found dominant market share in the brokerage industry. Assuming approval, I have a short wish list for the new company, which would benefit all users:

1. It would be great to see Zecco/TradeKing start to offer free ETF trading as Fidelity, Schwab, Vanguard, and others have started doing. Adding to ETF positions at $4.95 per trade is simply not cost effective. If you want to be a one-stop shop for investors, you really don’t have a choice.
2. Adopt the TradeKing $0 IRA fee and don’t institute inactivity fees.
3. Get rid of any account closing fees.

Can you tell I don’t like fees?

For the time being, it is business as usual for both companies.

What do you think about the Zecco and TradeKing merger, and what would you like to see from the new company in fees, features, service, etc.?

Related Posts:

• Zecco Review
• TradeKing Review

Zecco & TradeKing are Merging is copyrighted by 20somethingfinance.com without consent to republish.

30 awkward minutes of staring at the ceiling in order to avoid eye contact or looking directly into a blinding light while answering small talk questions as a complete stranger sticks their fingers and pointy tools into your mouth.

To continue the awkwardness, the dentist comes in to say hi and take a quick peek (if you’re lucky), and then you are sent on your way with a little white plastic bag filled with dental hygiene goodies and a paper appointment card that you will inevitably lose before they call to remind you in 6 months.

At least we all know what to expect.

Despite the awkward predictability, having your teeth looked at once or twice a year is a good idea, if for no other reason than preventative checkups to get a head start on fighting the development of periodontal disease, gingivitis, tooth decay and removal, etc., and the expensive treatments and/or surgery that could follow.

So why doesn’t everyone do it? It’s usually one of three reasons:

1. They are scared of the dentist.
2. They just don’t give a damn about their teeth or hate acknowledging a problem might exist.
3. They do not have dental insurance to cover the visit and don’t want to pay out-of-pocket.

Unfortunately, I can’t do much to help you with #1 or #2 other than simply telling you to “get over it”.

#3 is a big problem in the U.S. Only about 50% of Americans have dental insurance. And according to an ADA study, “Six in 10 Americans who have not visited a dentist in the past year (60%) say the cost of dental insurance is one of the primary reasons they do not visit a dentist.”

A Cheaper Alternative for those without Dental Insurance

For those folks without dental insurance, there may be a cheaper alternative to the costly dentist.

Credit goes out to my wife, who is attending nursing school at a local community college and discovered this awesome hack. The dental school at her college offers cheap dental care via visits to students enrolled in the dental hygiene program. A quick look around showed that a number of community colleges and vocational training schools offer the same service. Because they don’t have an advertising budget, the only way one might find out about these services is word-of-mouth.

I know what you’re thinking… you may shiver at the thought of having a student-in-training put pointy objects in your or a loved one’s mouth. Fortunately, their work is carefully supervised by licensed dental hygiene faculty and a clinic dentist. As a result, you might even get a better cleaning and more attention than at a normal dental office because the students are being graded on their performance. And with the primary goal of a dentist visit being preventative checkups, you will have a professional dentist looking at your teeth closer than any dental office, to meet that goal.

How cheap is the dental work? As an example, her college’s dental school offers the following rates:

• Oral health screening: $0
• Comprehensive dental hygiene care: students, seniors, & children: $25, adults: $40-60
• Dental health instruction: $0 (part of hygiene appointment)
• Panorex or full-mouth X-rays ($35)

That is probably cheaper than what those of us with dental insurance are paying in premiums, ironically.

Restorative dentistry (fillings), oral surgery (removal of teeth), orthodontics (braces), or denture services are typically not offered, but the goal here is preventative health more than anything else, so that hopefully you can avoid those expensive procedures.

For those without insurance, this could be a sufficient and cheap alternative to the much riskier (and costlier down the road) avoidance route.

Have you had dental school work done? How was your experience?

Related Posts:

• How to Reach Health Insurance Nirvana with an HDHP & HSA
• What is an HSA?
• What is a HDHP?
• Death to the Cheapskate

How to Get Cheap Dental Care without Dental Insurance is copyrighted by 20somethingfinance.com without consent to republish.

A recent report on Gen Y spending behaviors (meant to be a retailer insight study which I have morphed into a more pertinent personal finance topic) showed some interesting findings:

• 80% of 2,000 respondents believe it is important to get the lowest price on most things they purchase (up from 69% in 2010).
• 60% are likely to choose a lower priced brand over their usual, if they can save money (up from 51% in 2010).
• 57% make a point to search online for discounts before shopping.
• 63% are now sticking to only those brands and stores they know they can afford.

WTF?!

Maybe Gen Y is earning a new moniker, “The Frugal Generation”.

Why is this happening? Here are my suspicions:

1. Financial Hardship

The study found that 25% of Gen Y respondents said they are not able to make ends meet, compared to 17% of Generation X’ers (ages 35-54), and 13% of Boomers (ages 55 and over).

If you can’t get raises, are underemployed, or can’t get a job in the first place, it is going to impact your purchasing behaviors, for starters.

But it probably goes deeper than that. Have you ever heard Boomers refer to folks who lived through the Great Depression as extremely frugal (miserly) because of the fact that they lived through the Great Depression?

Gen Y has lived through The Great Recession, the biggest economic decline since The Great Depression. Could it be that financial hardship has changed our purchasing habits forever, even in good economic times?

Financial hardship has already turned Gen Y into the Boomerang Generation. But who wants to live with their parents forever?

2. Personal Debts are at All-Time Highs

With education inflation, student loan debt is at an all time high – exceeding $1 trillion, and only increasing.

Gen Y has a much bigger hole to dig out of if we are blessed with the privilege of a secondary eduction.

Add in credit card debt and fresh mortgages and the result is a frothy debt cocktail that has forced us to be frugal in order to dodge the risk of losing everything.

3. No Inheritances to Bail us Out

Gen Y is starting to realize that there will be no inheritance gifted upon them from their Boomer parents.

The total average retirement savings per American approaching retirement is pitiful:

• Only 15% of respondents aged 44-54 have over $250,000 saved
• Only 19% aged 55+ have over $250,000 saved.
• 62% of those aged 44-54 have under $100,000 saved.
• 60% over the age of 55 have under $100,000 saved.
• 44% of those aged 44-54 have less than $10,000 in total savings.
• 29% of those aged 55+ have less than $10,000 in total savings.

Bailouts aren’t coming to all but a lucky few.

4. Stuff Can’t Buy Happiness?

Is it possible that we’ve seen previous generations fail miserably at trying to buy happiness through stuff and have actually learned from it? Are we becoming a generation of minimalist-consumers?

I know it’s a stretch. I’m crossing my fingers…

What About You?

Why do you think Gen Y is becoming more frugal?

Is Gen Y Becoming the Frugal Generation? is copyrighted by 20somethingfinance.com without consent to republish.

1. saving money

2. making money

At its simplest level, optimizing each is what personal finance is all about.

The other day, I was thinking about which I found more fulfilling (because personal finance bloggers are sick like that…).

And I had a hard time coming up with an answer.

Savings Vs. Earnings: Fulfilling in their Own Ways

Even though they have an equal effect on your bottom line, the thrill of the act, motivation behind it, and sense of fulfillment can be completely different from person to person.

Doing things like cutting your electric bill, saving money on your auto insurance policy, or switching to one of the most fuel efficient cars can be extremely rewarding, kind of like winning a game. Call it the “thrill of the hack”. There’s also a minimalist appeal to saving money.

On the earning side, getting paid to build something from scratch, close a big deal, or make someone’s life better can be extremely rewarding as well. It is a form of validation or appreciation for all of your hard work. Providing for your family? Even better. And when your own money starts making money for you? Hot damn!

Taken to Extremes

At extremes, a love (or addiction) for one or the other can seem obvious:

An individual who turns down an income in favor of full-time extreme couponing so that they can store 200 tubes of Crest toothpaste in their basement is probably more fulfilled by saving money than they are by making money.

An individual who consciously goes into a field of work with the intention of making a ton of money while sacrificing personal time, relationships, and health so that you can afford a lavish lifestyle is probably more fulfilled by making money than they are by saving money.

But for everyone else, it is probably not quite as clear.

Which is More Fulfilling to you: Making Money or Saving Money?

I had such a hard time deciding which was more fulfilling, I thought it would make for an interesting reader debate. So debate away!

• Which do you think is more fulfilling? (take the poll below)
• Why? (comments)

Which is More Fulfilling: Saving Money or Making Money? (reader poll) is copyrighted by 20somethingfinance.com without consent to republish.

“What is the most convenient option?”

It has become second nature.

If our purchasing power doesn’t afford us the luxury of modern conveniences, then what good is it?

“Why am I working f’ing 60 hours a week to buy a less convenient option?!”

Most of the time, the question itself is what prompted the pursuit of the purchase in the first place.

Why wouldn’t we opt for convenience?

• Why ride a bike 2 miles to work and deal with sweat when you could drive in a nice air-conditioned vehicle?
• Why hard boil an egg when you can buy a fancy egg cooker for $30 that will do it in one less minute?
• Why use a hand crank can opener when you can buy an electric that does it without you having to move your fingers?
• Why learn how to cook when you can buy pre-made food from others?
• Why add razor blades to your grocery list when you can get them mailed to you monthly?
• Why refill an ink cartridge when you could just buy a new one?
• Why teach yourself how to drive a manual transmission car when there is automatic version?
• Why look up a recipe on how to unclog a sink with baking soda and vinegar when you could buy a jug of toxic chemicals and just dump it down the drain and be done with it?
• Why patch or sew up the article of clothing when you can buy a new one?
• Why use a push-reel mower that may require you to go over some spots twice when you could buy a gas-powered monster to take care of it in one pass?
• Why car-pool to work when you have your own car and no patience to wait for others?
• Why borrow a tool from a neighbor when you could add it to your buy list?
• Why think or learn of a clever way to solve a problem when you can simply buy something that solves it for you?
• Why make the trip to borrow free cd’s, books, and dvd’s from the library when you could have it shipped directly from Amazon to your doorstep?
• Why learn how to homebrew when you could buy your own beer?
• Why wait for your desired item to show up on Craigslist when you could get it NOW.
• Why learn how to do something on your own when you could have someone else come in and do it for you?
• Why turn off the lights or unplug the vampire appliance, when you could just sit on your ass instead?

… you get the idea.

Is Convenience Really all that Convenient?

A funny thing occurred to me as I was creating the above list of modern “conveniences”. I realized that many were not all that convenient in the first place. Is it really more convenient if we:

• Drive a car to work instead of biking? We have to find a parking spot, pay for that spot, pay for the gas to drive me there, and in many cases, pay for the car itself.
• Get the high-powered gas mower vs. a push reel (or riding mower vs. a push)? We have to pay more again, maintain it more regularly, go out to buy fuel, and find or buy more space to store it.
• Go out to a restaurant vs. cook at home? That requires transportation to and from, the parking space problem again, multiple times the cost, and then the wait for the food.
• Borrow a tool from a neighbor? We simply have to admit, through our act of borrowing, that we don’t like pissing our money away. Isn’t that a redeeming quality?

We’ve been conditioned to think newer, more complex gadgets are more convenient.

But an egg boiler? An electric can opener? You have to go out and buy these items, they often break down, they take up more space, they use up more energy, and they save virtually no time at all. How is that the least bit convenient?

Oh, and the modern “convenience store”? They sell nothing but high margin, overpriced, unhealthy, pre-packaged sugar in liquid and solid forms.

In other cases, the effort (“inconvenience”?) to go the cheaper route will result in fitter health, greater self-reliance, and a cool new skill that you can share with your friends. And every time you make that effort, it becomes a little bit simpler.

So how did we get to this point?

Part clever marketing/advertising, part laziness, part herd mentality, part boredom, part approval-seeking.

The Lifetime Cost of Purchasing Convenience

Unfortunately, 99% of the time, the most convenient option is also the most expensive.

Whether it is monthly recurring costs, payment for specialized services, or the thousands of purchases you will make in your lifetime, the cost of going with the perceived most convenient alternative is SIGNIFICANT.

I am willing to bet that for many, that cost, when distributed over the life of the product or service, is easily in the upper hundreds, possibly thousands per month, per person, especially when you add in finance charges for the more convenience homes, vehicles, and credit card purchases.

The REAL expense to pay for all of these conveniences?

1. years, possibly decades of your life given to jobs that you probably don’t like
2. less free time for your family/friends/self
3. general unhappiness when you realize those purchases aren’t actually making you happier

Just remember that the next time you swipe or enter your card.

In fact, maybe we should all tape the question “Convenient?” to the front of our cards as a firm reminder.

The Funny thing About Convenience… is copyrighted by 20somethingfinance.com without consent to republish.

Stop and think for a moment about all of the personal identification information that can be taken from your mailbox: name, address, phone number, social security number, bank account number on outgoing checks, credit card number, account numbers at financial institutions, incoming checks, rebates, driver’s license… what can’t some dirtball find out about you through the mail?

It is easy for an identity thief to piece together the puzzle and steal your identity.

There are some easy measures you can take to protect yourself from mail ID theft and other forms of ID theft that come from a paper trail…

1. Cut Down on Junk Mail

Start by limiting inflow. Cut down on the amount of credit card and other offers that even your dog could get approved for:

• De-list your name from the Direct Marketing Association (DMA) list at dmachoice.org.
• Opt out of credit and insurance offers from the three major credit bureaus at optoutprescreen.com. You can opt out for five years or permanently, if you choose.
• Check out my post on how to stop junk mail dead in its tracks for more tips.

2. Shred the Mail you do Receive or Lock it up

Get yourself a good paper shredder, and open every piece of mail that you do get to see if there is anything in there that needs to be shredded. You can find a good one for $40 or less.

Everything that you keep should be kept in a locking file cabinet if you live with others (and even if you don’t).

3. Get a P.O Box or Lock Box

As mentioned earlier, this is one of the most fool-proof ways, if you are concerned about ID theft in your area. You can search for and buy a P.O. Box on the USPS site. Prices vary, but the smallest box option only costs $5/month. That’s not a bad price for the peace of mind it offers.

4. Get a Locking Mailbox

A locking mail box looks very similar to a normal mailbox, but it has a locking mechanism on it. Mail can be put in, but only those with a key can take it out.

This method does have a downside: your ability to send outgoing mail or receive larger packages in the mail is limited.

5. Protect Outgoing Mail

Not only should you safeguard against mail fraud for incoming mail, but you should also be concerned about the outgoing mail. In order of safest, to least safe methods of getting your mail out:

• Drop off at your post office.
• Drop in a collection box.
• Give directly to your mail carrier.
• Put outgoing in your mailbox.

The latter is the one you should probably avoid, particularly if cash or checks are involved.

6. Never Leave Mail in your Car or Laying Around Outside of your House

This one is pretty self explanatory.

7. Go Paperless and Track Incoming Bills and Tax Documents

Whenever possible, go paperless with your bills. Most companies are now offering small discounts on your bill (or abstaining from add-on fees) if you simply sign up for e-billing. Cutting down on the paper bills eliminates mail fraud potential, and helps the planet.

For bills or tax documents you can’t prevent, write down everything you should be receiving on an annual basis, and make sure you receive it. If you don’t receive what you were expecting, pay close attention to your credit report for unexpected credit inquiries or new accounts.

8. Get Free Credit Reports and Check them Consistently

You are entitled to three free credit reports annually through the government’s officially mandated site – annualcreditreport.com. Put it on your calendar to check one every 4 months.

Mail Identity Theft Discussion:

• Have you ever been a victim of mail theft or mail fraud? What happened?
• What else do you do to protect yourself from mail identity theft?

Related Posts:

• Lifelock Review
• How to Improve your Credit Score
• What to do when your Purse or Wallet is Stolen
• 10 Tips for Avoiding Travel Theft

8 Tips to Protect Yourself Against Mail Identity Theft & Fraud is copyrighted by 20somethingfinance.com without consent to republish.

Yeah, probably, to an extent. Or it can at least remove some unhappiness. We can all agree on that, right?

Better question: “at what $ amount can money no longer buy happiness?”

There’s been a number of studies that have attempted to answer this question by pinpointing a magical income number at which happiness is much easier to obtain.

A Gallup poll in 2010 pegged $75,000 as the magic household income at which happiness couldn’t be further influenced by additional income. I took a poll in September of 2010 where 75% of you said you needed over $75,000 to reach peak money/happiness (money hungry wolves!).

A more recent Marist College poll came to the conclusion that $50,000 was a key happiness landmark. Now don’t you feel greedy?

So there you go… just earn $50,000, keep your salary increases to the rate of inflation and every year you’ll have the hap, hap, happiest Christmas since Bing Crosby tap-danced with Danny f’ing Kaye. No?

Are these Money and Happiness Studies Legit?

I always find these money and happiness studies interesting, but they always leave me with a bit of a “hungry-for-more” feeling.

I am always left questioning three things:

1. Causation vs. Correlation: Perhaps confidence, location, gender, race, education level, or even age is a bigger determinate of happiness than income? In aggregate, those who achieve more than $50,000 in income are happier than those who achieve less. But is that happiness determined by the income or are there other factors that led to the lower happiness/income or higher happiness/income? A correlation between income level and happiness does not mean that the income level led to the happiness. Exhibit that even though the U.S. is the wealthiest nation, it’s citizens are not the happiest.
2. The Impact of Location: How does location impact happiness at different income levels? $50,000 will take you a long ways in Fort Wayne, but not very far in San Francisco. You can’t paint a broad brush across the entire U.S. when expense levels can vary so much by geography. What is the magic number when adjusted for cost of living? Nobody is looking at this.
3. The Impact of Expenses: How do spending habits influence happiness? Is someone who spends much more than peers in their geography less likely to be happy? Nobody is looking at this either.

What Can we Learn From Income and Happiness Studies?

Despite their weaknesses, I think that these studies do help add some credibility to the following assertions:

1. Meeting basic needs does influence happiness: just scraping by to put food on the table and pay for other basic needs is going to have an adverse impact on happiness. It would be hard to find people who disagree with this, but the numbers in these studies back this assertion.
2. Stuff does not equal happiness: at a certain level, more buying power (more stuff) does not lead to more happiness. Therefore, if happiness doesn’t increase infinitely with income, one would have to assume that stuff does not lead to happiness. So stop buying all that stuff!
3. Take comfort in enough: who doesn’t want to be happy? The pursuit of money for the goal of increasing happiness is something that most of us have bought in to. As a wage earner, take comfort in knowing that you don’t have to earn all that much to influence your happiness. $50,000 or $75,000 per household (divide by two for your personal number in a two-income household) can be reached by just about everyone.

A Challenge to Researchers

I have a theory. We know that expenses are very strongly influenced by geography. We also know that the ability to meet expenses has an impact on happiness levels. So instead of looking at income (which varies by geography), maybe we should look at a different number: personal savings rate.

A household that makes $75,000 and spends $100,000 is probably going to be pretty unhappy, right? And one that makes $50,000 with only $10,000 in expenses? Much happier (in most cases). But the money/happiness studies don’t consider expenses at all. Looking at a household’s personal savings rate in relation to happiness already goes one step beyond income – expenses and geography are automatically factored in.

I would be willing to bet there is a stronger correlation between personal savings rate (maybe even expenses) and happiness than there is between income and happiness.

So then the question becomes: at what personal savings rate is happiness maxed out?

What do you think?

Related Posts:

• Money Can’t Buy Happiness, but it Can Buy..
• What would you do if Money were Not an Issue?
• Finding Happiness in Financial Goals
• Money Vs. Career Satisfaction

Income & Happiness Studies: How much is Enough? is copyrighted by 20somethingfinance.com without consent to republish.

The following is an example of a promotion that I am affiliated with where I think the offering provides a strong value for a certain subset of 20somethingfinance readers – those with credit card debt. If you don’t have credit card debt, you can stop reading now.

A few months back, I highlighted a no-transfer fee card from Discover as a potential solution for readers looking to stop accruing interest and pay down their debt faster. The Discover is no longer available, but a shout goes out to reader, Sun, who mentioned that there is another no transfer-fee card out there, the Chase Slate no transfer fee version.

The Slate is very similar to the Discover, but it holds a longer intro. period (15 vs. 12 months).

Why promote this card? It used to be that you could easily find 0% APR balance transfer cards everywhere with no transfer fee. Today, you’ll see a number of credit cards that tout 0% APR interest on balance transfers, but if you read the fine print (always read the fine print), most of these cards get you with a balance transfer fee usually at 3-5% of your transferred balance.

The Chase Slate offers both a 0% APR and no balance transfer fee.

If you hold credit card debt, this presents an interesting debt-payoff strategy opportunity for you.

Here are the details on the card…

Chase Slate No Transfer Fee Specs

The goal here is debt payoff, and the Chase Slate excels with that goal in mind – with no fees. Here are the official specs on the card:

• No balance transfer fee . Note that you must transfer your higher rate balances during the first 30 days your account is open to avoid the balance transfer fee. After that, the balance transfer fee is 3% of the amount transferred with a minimum of $5.
• 0% intro APR for 15 months on purchases and balance transfers, so you avoid further interest from accumulating and can pay down your balance faster.
• Zero liability on unauthorized purchases.
• No annual fee.

Who is a 0% APR/0% Balance Transfer Fee Card Good for?

Anyone holding credit card debt with high interest payments who wants to get rid of that debt. You have to pay off that freaking credit card debt!!! No exceptions.

If you hold credit card debt, odds are you are paying an outrageously high interest rate to hold that debt – usually somewhere between 13-25%.

Switching to another card with zero transfer fees and a 0% interest rate gives you an opportunity to pay off your debt faster without accruing additional debt.

Essentially, you’re getting an interest-free loan on your credit card debt for a specified period of time. This could be a great opportunity for someone who is digging out of credit card debt and needs a break on the interest piling up.

Are there Any Risks?

You would be moving from high-interest rate on your existing credit card debt to a 0% interest rate on that debt. From a numbers standpoint, there really is no risk because you are cutting down interest payments and potentially saving a lot of money.

If you have $20,000 in credit card debt, for example, and are paying 20% annual APR on that, you’re paying approximately $4,000 a year in interest to the credit card company, which is compounding on top of the original debt. This card gives you a 15-month break on the interest from accruing, which would present approximately a $5,000 savings(!) in this scenario.

However, if you look at this opportunity as an excuse to buy more stuff and/or simply hold off on paying your debts, you are making a mistake.

Credit card companies offer this, not out of generosity, but because they want you to transfer your profitable (for them) debt from another company to theirs.

Apply 100% of your interest savings and then some towards paying down your balance or pay it off completely. If you can stick to that, the Chase Slate is a great card.

As always, read the fine print and details before applying.

Related Posts:

• Chase Freedom Review
• The Best Grocery Rewards Card

Chase Slate No Balance Transfer Fee, 0% APR Promotion is copyrighted by 20somethingfinance.com without consent to republish.

The discussion prompted reader, Bill, to write in with a great question,

“I assume that you invest a lot of that savings, but isn’t an investment in a company essentially just a vote of confidence that they will continue to produce products or services and continue to be profitable doing so? The money you earn isn’t going anywhere unless you burn it, so won’t it all just be turned back into stuff eventually one way or another?”

My response to Bill was:

“Great question with a complicated answer that I could literally write for hours about, so I’ll try to keep it simple:
1. I am not against business or capitalism. My environmental stance does not = no investing, because:
2. There are a lot of businesses that do things ethically and/or make the world a better place. You WON’T find me investing in BP, but you might find me investing in solar.
3. There’s also something to be said for me to invest, grow my wealth, so that I may donate it or reapply myself in areas where I am making the world a better place.

I think socially responsible investing (SRI) is a great thing. You may have just prompted an entire post…”

Here is that post!

What is Social Responsible Investing?

The sentiment raised by Bill has prompted an entire category of investment focus called socially responsible investing, or SRI.

While it may be tempting for those with an environmental, social, political, or other aversion to investing to dig a hole in the ground and bury their cash, to do so over the long run would be suicide.

A fear of investing can lead to an erosion of your cash value as inflation eats at your savings over time.

You HAVE to invest in order to grow your net worth and reach and maintain any sort of financial independence.

So how do you ensure your financial future through investing while at the same time not wanting to jump off a ledge out of self-conscious guilt for contributing to the destruction of the entire world from capatalistic greed? Socially responsible investing.

The Origins of Socially Responsible Investing

The first counts of socially responsible investing dates back to religious influences in the 1700′s. The Religious Society of Friends (the Quakers) prohibited members from participating in the slave trade.

One of the first written accounts comes from Methodist founder John Wesley (1703–1791), as he gave a sermon on “The Use of Money” where he outlined his basic tenets of social investing such as not harming your neighbor through your business practices and to avoid industries like tanning and chemical production.

Later, religious leaders encouraged members to avoid sinful companies, such as those that produced products like firearms, alcohol, and tobacco.

Social investing then made a move to political territory with the use of labor union pension funds and even helping to end apartheid in South Africa.

SRI Today

Socially responsible investing today still has a focus on avoiding firearms, alcohol, gambling, defense industry, and tobacco, but there is an increasingly larger focus on human rights issues and community investing (putting money into under-served communities as an investment strategy) as well.

You can buy SRI focused mutual funds, index funds, ETF’s, or even implement your own socially responsible investment strategy.

SRI has been turned to by many for its focus on environmental issues as global warming and other environmental threats compound with economic growth. Institutional and individual investors have been doing this in a number of ways:

• by screening out oil, coal, gas, and other fossil fuels
• by screening out companies that don’t have a strong environmental track record
• by favoring companies that use more alternative and renewable energy versus their peers
• by favoring companies that manufacture alternative and renewable energy solutions

Not Just for Charity

Whatever the purpose, SRI has become EXTREMELY big business. According to the Forum for Sustainable and Responsible Investment, $3.07 trillion out of $25.2 trillion in the U.S. Assets are growing much faster than non-SRI focused assets.

According to Kiplinger Magazine, there are now 493 mutual funds with assets of $569 billion versus 55 funds and $12 billion in assets 20 years ago.

When I first learned about socially responsible investing 8 or so years ago, the performance was not there versus the broader market. Today, however, that’s no longer the case. It is possible to have a social investing conscious without having to pay a tax or fee in the form of poor performance. For example, one of the SRI giants, the Calvert Equity Fund (CSIEX), has gained 6.9% annually over the past 15 years, vs. 5.5% for the S&P.

It is quite possible to build for your future while not hating yourself, after all.

On the flip side, SRI is not the only way to do this. Every time you make a purchase or give a company money, you are directly influencing their business. As a consumer, you wield a lot of power (i.e. don’t like big oil or gas guzzlers, switch to a more fuel efficient car or bike).

Others make the argument that you should invest where you get the highest return on investment and then use your proceeds in responsible ways to have an even bigger impact.

Why not practice all three?

SRI Discussion:

• Have you invested in socially responsible investment strategies yet? Why or why not?
• Have you avoided investing altogether for ethical reasons?
• If you are using SRI, what have you invested in?

Related Posts:

• Consumers Need 12-Step Programs Too
• How to Start an Online Investing Account

What is SRI? An Intro to Socially Responsible Investing is copyrighted by 20somethingfinance.com without consent to republish.

“You’re such a cheapskate.”

“Why are you so cheap?”

“What a cheap-ass!”

How many times have you said, heard, or received the biting sting of one of these zingers?

I have been called a “cheapskate” or less appealing synonym in an insulting way a number of times. And most of those times it resulted in me wanting to do a flying elbow drop from the top of a kitchen table onto that person’s temple.

Sadly, Americans have been conditioned to throw one of these verbal jabs when someone they are spending time with doesn’t do what they want them to do, when that something involves spending money in a wasteful manner.

Visions of Scrooge McDuck diving into a pile of gold start popping up in people’s heads. “This cheapskate must be absolutely miserable! And how dare they make me second guess my wastefulness?!”

So the jabs start flying…

Don’t want to fly half way across the country to a golf resort when there are 20 courses in a 15 mile radius? “Cheapskate!”

Don’t want to pay $75 for floor seats to catch that 80′s hair band you loved 20 years ago? “Cheap-ass!”

No cable TV? “You’re so cheap!”

Don’t want to go out and pay $5 per watered down pint when you have an awesome homebrew in the fridge? “You cheap bastard!”

Is there Even Such a thing as a Cheapskate?

The irony is… there really is rarely a TRUE “cheapskate”, in the literal definition of the word. When might you actually be a cheapskate?

• If you don’t patch a hole in the roof that needs patching because you don’t want to spend the money you have to do so, you’re a cheapskate.
• If your electricity gets shut off because it’s too painful to send the electric company $30, you’re a cheap-ass.
• If you get all your condiments for home from fast food restaurants, you’re cheap.
• If you don’t eat anything but WonderBread and Jif in order to save money… probably a cheap bastard.

But how many so called “cheapskates” actually fit these examples versus the former? Very few.

People are only “cheap” (I prefer “frugal”, “resourceful”, or just “smart”) in our country if they have priorities, values, and goals that they place higher than the $1,000 round of golf, $75 nostalgia, or $5 beer.

And the sad thing about it is that 75%+ of those who use the derogatory phrases actually believe it. And many who are on the receiving end start to believe it and get down on themselves, and even start giving in to the wastefulness.

Occasionally, very occasionally, the term is used in an endearing way with no passive aggressiveness or insult intended. But that is rare.

Death to the Cheapskate Phrase

So, I’m declaring death to the cheapskate phrase. Here’s how you can help make it happen:

• If you ever get the urge to say it to another, bite your tongue and have understanding of their situation and values. Then complement them on how smart they are and how much more you’ll enjoy hanging out with them when you both retire early.
• If you ever get called a cheapskate in an insulting way, realize that the person calling you it is just kind of a dick, and don’t give in to the peer pressure to waste your money.
• If they call you it again, say, “I’m not cheap, I’m just smarter with my money than you are.” Then seriously consider whether you want that friendship and the awkward peer pressure it will continue to present to go on. Who wants to be friends with a wasteful jerk anyways?
• If they call you it again after that, say, “Prepare yourself for the flying atomic elbow drop.”

However, you can still reserve full right to pridefully call yourself a cheapskate.

Death to the Cheapskate is copyrighted by 20somethingfinance.com without consent to republish.