Wondering About Social Investing

MoneyEnvironmental and social issues loom larger in our lives. If you are like many people, you alter your consumer decisions to do some good in the world. You can do the same when investing.

Impact investing (aka socially responsible investing) is growing for many reasons, including increased awareness of environmental problems. As an impact investor conscious of such green issues, you might look for investments concerning breakthrough technologies that don’t depend on fossil fuels.

The first supporters of electric car manufacturer Tesla Motors (TSLA) exemplified green impact investors, though some likely looked first at return on investment. Another example: venture capital leader Khosla Ventures supporting the startup Liquid Metal Battery Corp., now Ambri, which develops massive batteries to store electricity and back up our power grid during peak use.

One new strategy: the social impact bond (SIB), which pays a small return based on the issuing company or entity achieving beneficial results. The investment firm Goldman Sachs continues to contribute hundreds of millions of dollars to SIBs for revamping the Detroit waterfront and bettering education nationwide, among other causes.

Great for goliaths with mountains of capital to back their good intentions, but what can you the individual investor do?

First, search online for different opportunities and information outlets to match your favorite issue. For environmental news and opinion, for instance, TreeHugger, Grist, The New York Times Dot Earth blog, Ecogeek, Autobloggreen and Mother Nature Network  are just a handful of the top websites.

Mutual funds like those from Calvert Investments or Green Century Funds invest only in companies with environment-friendly policies; weapons manufacturers and tobacco or paper companies, to name a few, are excluded from these funds. Similarly, the Parnassus Workplace Fund only invests in companies that take care of employees.

Responsible investing is also no ticket to drab returns. The domestic variant of one of the more long-established funds for impact investing, the iShares MSCI USA ESG Select (KLD) comprises companies with high environmental, social and governance (ESG) ratings – and nearly doubled its share price over the past five years.

You can find more examples of such funds and managers at the finance news site SocialFunds.com. The Corporate Social Responsibility Newswire also covers sustainability and corporate responsibility investing.

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Handling Your Credit Cards

Credit CardsMost people have credit cards. Your credit score matters, so don’t take it for granted. And if it is low, here are ways to give it a turbo boost.

The most commonly used credit score is from FICO, and it is vital to your financial health. Fair Isaac Corp. created the FICO credit score in 1958, and it has stood the test of time. By the company’s measure, scientific analysis and calculation, the highest score is 850. Congratulations to all of you are at that level.

However, most people’s score does not reach those heights. Each lender has its own way of interpreting the score. Most lenders agree that any score above 750 is excellent, around 650 is fair and under 600 is poor. The closer you are to a 750 score, or above, the more likely a lender will approve you and charge you lower interest rates.

The first and most important is to pay all your bills on time. Late and skipped payments can really hurt your score. Next, keep balances on credit cards as low as possible. Paying off debt is a much wiser choice than moving debt from credit card to credit card.

Pay off the credit cards with the highest interest rates first. Every time you apply for and open a new credit account, your score goes down, so be wise with those applications received in your mailbox. Raise your score by maintaining having balances lower than your credit limit.

Your FICO score summarizes your credit risk and is based on your credit report. You must request and inspect your credit report at least annually. Each year you can receive a free copy of your credit report from www.annualcreditreport.com. There are a number of other websites that say you will receive a free credit report, but if you have to provide a credit card to get a free report then it is not really free.

Only this site provides no-strings-attached reports. Reports are provided from the three major credit reporting agencies (Equifax, Experian and TransUnion). Once you have your reports in hand, do not stop because you still have work to do.

Verify the reports and determine if there are inaccuracies. Clear up anything that is not correct by contacting the credit reporting agencies with the correct information. Inaccurate information can lead to denying you credit or paying a higher interest rate.

The ideal person, in the eyes of the credit bureaus, is someone who holds a job for some time, owns a home or rents an apartment for several years and holds just a few cards that are paid on time. They also like those who carry some balances, usually 30% or less of the credit limit, because card issuer make money from interest payments.

A low credit score can cost you significant time and money. Get a higher score for a winning financial life.

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