Being a consumer puts you in a position of power. Each purchase you make throughout the day is, in effect, a vote for what you deem the best. When voting with your dollar, you are supporting a business, whether good or bad. A conscientious consumer thinks about the social and environmental aspects of any product or service before they choose to use it.?A wise consumer supports businesses that are doing more than just making a profit. This takes a bit more thought than pulling into Walmart or a few clicks on Amazon, but it’s well worth your time. Here are 6 reasons why you should support local business.
A local business owner is more likely to remember you and the products or services you purchase on a regular basis. This means that you get more personalized service. He or she is also more likely to have direct contact with all employees and a thorough knowledge of all products. Should any problems arise, you won’t have to stay on hold on some 800 number waiting for a faceless name to listen to your concerns.
2 – Increased Employment
Local and small businesses employ over 50% of the private sector workforce. Since the end of the Recession, small businesses are responsible 66% of all net jobs created. Local and small businesses are also more likely to hire locally increasing the employment base in your community. Keeping workers local decreases commutes and the environmental hazards that go with them.
3 – Improved Local Economy
Local businesses recirculate a far greater percentage of revenue locally compared to national chains or franchises. This is referred to as the “multiplier effect.” An average of 48% of the revenue from local businesses is recirculated into the local economy compared to only 14% from national chains.? Put simply, local businesses are more likely to purchase from other local businesses and use other local services. When you shop locally, you are actually investing in your community.
4 – Better, Healthier Products?
A marketplace of small businesses breeds competition. You are more likely to be able to acquire better quality products and services at local businesses. Local businesses have an element of transparency that faceless corporations don’t which holds them accountable to the quality of their products or services. In addition, purchasing from local farmers gives you access to healthier foods without the mass chemical spraying and preservatives required of corporate chains that have to mass produce and transport their produce over a long range.?Buying fresh, local and traceable foods is not only being a responsible consumer, but a healthy one.
5 – Property Value and Quality of Life
Local businesses give your community character. The uniqueness of a variety of local businesses is far superior to the bland monotony of ubiquitous national chains littering a cityscape. Because the businesses in your community make up a large part of its character, they also play a large part in both quality of life and property values. By supporting your community’s unique character rather than giving your money to national chains, you help to preserve its value.
6 – Socially and Environmentally Conscious Businesses
Local businesses are far more likely to be socially and environmentally conscious than big corps, especially when it comes to food. To begin with, local businesses reduce the carbon miles required from transport and may use local information to choose between suppliers. Local clothing stores are far less likely to purchase from mass fast fashion overseas suppliers. Due to consumer demand, small farm-to-table restaurants, regional banks, and small businesses are turning greener every day. In addition, because local businesses are invested in their community, they tend to take responsibility for their actions beyond simply bringing in revenue.
There are always knock-on effects to every product or service that you buy. Those effects begin with where you spend your dollar and what you spend your dollar on. While it may not seem evident on the surface, if you take a peak under the lid, you’ll understand both the direct and indirect impacts that each of your purchases has. Knowing where a product comes from is crucial to shopping sustainably. If there is a local option, choose it. Shop in season and don?t buy fruit that has more flyer miles than you do. Ask local shops where they buy their supplies from when it is not obvious.
When you buy products that are produced locally and sold by local businesses, there is a positive effect on the local economy. By contrast, when you buy food and clothing that is shipped in from thousands of miles away by a national retail chain, more often than not it is produced by workers who are exploited in a factory that has no environmental policy, and sold by a corporation that is not acting in a sustainable manner. This not only has a negative effect on local economies, but also on the world at large. Every purchase counts. Every purchase has an impact, whether we like or not. As the world is simply a collection of individuals, it’s up to each individual to make sure that their dollar 1) does no harm, 2) makes their community, and the world, a better place.
Banking is an industry where you might not expect to be able to find social or environmental conscious business practices. There are few banks where this is represented due to the longstanding traditions of banks and the fact that thinking in a social or environmentally beneficial manner from a commercial perspective is somewhat of a new thing. However, there are still some banks that fit the bill.
What is a Socially or Environmentally Conscious Bank?
Understanding what makes a bank conscious to people or the environment is key to understanding what a socially conscious bank is. The point of being socially conscious from a bank?s perspective is to carry on a sustainable way of working that benefits the people who use the bank as well as the area the bank is doing business in. The idea of sustainable banking is one that exists in certain countries more than it does others. For example, in a European country, there are local credit unions that everyone in the area is able to have an account in. Loans are made to people based on their savings and not on their creditworthiness, which is highly beneficial to low-income people and those struggling with different debts that might otherwise see them refused for a bank loan. In the US, credit unions exist but are limited to different industries and segments of society, such as a medical credit union or an automotive union workers credit union. These types of banks offer a sustainable banking option that is clearly socially conscious.
On a traditional sized banking aspect, sustainable banking can be one that has other business interests that they leverage to create the bank. An example is the Co-op bank in the United Kingdom, which also has a wing that deals in agricultural farming of animals. This allows the customers to know what the bank supports and customers feel that by banking with the Co-op bank, they are helping to improve their society, farming in particular.
Another type of benefit that a bank can offer to be considered socially conscious is to set the repayment on any loan to a predetermined amount rather than allowing interest to be compounded or the repayment sum to be increased. Through offering this type of banking, the customer does not face any nasty surprises in the future when their payment doubles or the amount of time it takes them to repay is extended from changing interest rates.
Traditional Banking Options
When considering the everyday bank account, trying to find a bank that is socially conscious can be difficult because the aspects that make a bank conscious might not be advertised very well. One thing that a person can do is to use a bank that loans to small businesses and microloans for citizens of developing countries. The ability for a bank to make the lives of much better cannot be understated and banks such as the Charity Bank that offer these services can be seen to be making a real difference.
The term green bank has been coined in the US to denote sustainable banking, particularly in California where the New Resource Bank operates. Many customers have checking accounts with the bank, including the state of California itself, and in turn, the bank uses the deposited funds to fund new businesses in the renewable or green sectors. The bank would loan to organic food companies, people wishing to go solar on their home or people wishing to open a sustainable business. In this cyclic way, the bank ensures that they are making a positive impact, which is a draw to socially and environmentally conscious consumers, which then further supports more green/sustainable projects. It?s a positive feedback loop of banking and sustainability.
Taking where you bank into consideration is hugely important if you are looking to be more conscious. Having a checking or savings account, or a mortgage is a form of shopping and one that involves a lot more cash flow. Customers must pay for the privilege of using whichever bank they do, so in turn, it should be noted what the bank does with their profits. Making a difference by choosing is at the core of socially and environmentally conscious sustainable banking solutions. It is likely the most important choice a person wishing to make an impact can have. When a bank chooses to help out small businesses that are trying to make a difference in their community as well as in their own lives, the ongoing positive result from such loans reaches much further than loans made to businesses with no social foresight. There is a global push for banks to think sustainably and act upon their corporate social responsibility.
Investing for retirement is something that every person should be thinking about. While it might not be easy to save due to low wages and/or high bills, the ability to put something aside for retirement is one of the most important things we can do to secure our future. There are many options available for people who want to begin investing for their retirement now. Be warned, this blog has a lot of finance jargon but take your time, look up any terms that you don?t already know and by the time you finish you?ll have a much better idea of what goes into investing for retirement.
The investing arena is filled with investors that have different needs. But one constant is the desire to provide for themselves or their families financially after retirement. Creating ongoing financial returns from investments can help create a stream of income for retirees. It is a means of securing financial freedom while no longer being in the workforce. While certain strategies might be used widely in finance, they might not be suitable for a person that is trying to gain a retirement level of income. Knowing what different options are available and why different people choose them is a great place to start ensuring the investment you choose for your retirement fits your needs.
How to Invest for Retirement
The first step in determining a strategy to investing is to figure out where you are in the process. If you are younger, you have more time to take higher risks in your investment portfolio. This is only because you still have the time to recoup any loss if an investment doesn?t work out. You also have more time to take advantage of compound interest growth. The older you get, the less time you have to recoup losses or change course, and therefore the less risk you want to see in your investment portfolio.
The most important aspect is to set aside a portion of every wage or income stream for retirement purposes every month. You’ve heard of “pay yourself first”. This is very important. No matter what else is going on your life, find a way to set aside something (even as little as $50 per month) for your retirement. The amount you can contribute will be determined by income and expenses.?In general, a good rule of thumb is to save 15% of your income every year, starting at 25. But even 5-10% will create a noticeable benefit, especially if you have time on your side.
Another rule of thumb: by age 30, the goal is to have 1x your income saved for retirement and invested stocks and bonds. By age 40, it is 3x your salary saved. By 50, it jumps to 6x. And by 60, you’d be looking at having 8x your salary saved and invested for retirement.
Why Tax Deferred Accounts Are Good
Most retirement accounts are tax deferred accounts. Why are tax deferred accounts good? Two reasons:
If you put money into a tax deferred retirement account like a 401k or IRA, that money grows tax free until you take it out.?When you withdraw the money, the investment gains made on that money will be taxed at your then current tax rate. That means that if your tax rate is lower in retirement (it usually is) v. your current tax rate, it makes sense to defer paying taxes on those gains until later in life.
When you move some of your income into a tax deferred retirement account, it lowers your overall adjusted gross income (AGI) in that year. That means you will pay lower taxes on the rest of your income that year.
Consideration must be given as to whether you are self-employed or have access to a pension pot and/or also can contribute into a voluntary contribution scheme,?like a 401k.
If you work for a company and they offer a 401k plan, find out if the company matches contributions into your 401k. Many companies encourage their employees to save for retirement via the 401k program by matching up to a certain percentage of your salary. For example, 3%. But it’s called a match for a reason. It means you need to put in at least 3% of your income into the 401k retirement account in order to get their 3% match. We cannot underscore this enough: make sure to max out your 401k contributions each year. If you cannot, then at least put in up to the company match. Why? Because it is free money. The company is literally offering to match your contributions for retirement. That’s separate from your salary, bonus or equity. In other words, don’t leave free money on the table.
Individual Retirement Accounts (IRAs) are also popular for retirement investment. There two types of IRAs: Traditional IRA and Roth IRA. Both have a $5,500 contribution limit per year for 2018. Here we will provide a quick overview of the Traditional IRA. IRAs? are available to both self employed and company employees.?Like 401ks, Traditional IRAs have the benefit of being tax deferred for amounts up to a certain level per year, which makes them doubly advantageous.
There is also no limit to how long an investment can grow in these accounts past the age of retirement, there is a requirement to start withdrawing money by 70.5. With upfront tax deductions available as well as the tax credit deferral, the Traditional IRA is another good choice for retirement investing.
If you are self-employed there are other retirement contribution schemes available. These include a SEP IRA, i401k (Individual 401K) or Simple IRA. We will profile the SEP IRA in this section.
SEP stands for Simplified Employee Pension. With a SEP IRA, your business (not the individual) funds the account. Any small business owner with one or more employees, or a freelancer can set up a SEP Account. One of the main advantages of a SEP IRA over Traditional or Roth IRAs: your contribution limits are much higher. In 2018, the contribution limit is $58,000. That means that you can put in up to $58K in tax deferred income every year. And it doesn’t have to be the same amount every year. In a lean year, you can put in a much smaller amount. In a great year, you can load up and defer a significant amount in tax payment.
Guaranteed income annuities, cash value life insurance plans, non-qualified deferred contribution plans and real estate investing all investment vehicles that are set up for investing for retirement. But be careful, some of these products carry many hidden fees. For example, some annuities will charge 50% of your premiums in the first few years as a commission fee for the salesperson. Make sure you fully understand the terms before signing up.
The main factor to remember is to consider what you have at present and how long you have to make a gain or handle a loss. The closer you are to retiring, the less risk you want to take with your investments. High-risk investing is for younger people with the time to recoup their losses in the future. Choosing solid and stable investments later in life will help to create consistent income and see you able to retire when ready, a guarantee not everyone has.
As a beginner in the investment arena, there are so many options that you might have an overload of information. Choosing the right type of investment for your needs is the most important aspect of investment. Helping yourself is central to that, of course, but there are ways that investing can be done to the greater benefit of others as well. Knowing where to find these types of opportunities can transition you from a mere investor to one that has an environmental and social impact, a conscious investor wielding capital for profit and progress.
It is a good idea to figure out how much money you have to invest, whether or not you could afford to lose it or not, and how long it would take you to recoup that investment stake should any investment not pan out. Younger people have more time to make mistakes in investing and therefore can consider riskier investments with more ease than an older investor would. Socially responsible investing is something that can be done to ensure there is a positive impact from your investment. This would include companies that promote diversity, consumer protection, human rights or environmental stewardship.
One of the best way to invest is through sustainable investing; ensuring that you receive a dividend on your investment while knowing that your money is being put to a good use. A great example of this is the microloan or microfinance. There are a number of websites that can put an ethical investor in touch with a person that needs a loan to give their family a chance at a sustainable life. Microloans can be used by people in developing parts of the world to buy stock of some kind, perhaps animals for a farm or raw materials to make products to sell from. The investment will benefit the individual and the investor alike.
Also, an investment that acts to improve the local community or the environment can bring both purpose and profit. Whenever possible, investing in either the local area or in an area of need is a wonderful way to use your voice as a consumer and investor, while ensuring that you will have a stable chance at an ongoing dividend and gain on your initial investment.
Make small investments and spread the amount you have to invest in several diverse types of investments, thereby creating a diversified portfolio. This way, if one investment suffers, the others will help to keep the dividends or gains coming in and you won?t lose all your investment in one swoop.
?Investments to Avoid
For an environmentally and socially conscious person, there is more to an investment than simply making a return. If you want to help the world at the same time, avoid investments in the gun industry, fossil fuels, alcohol or tobacco or many raw materials including diamond mining or another type of physical mining of raw materials in underdeveloped countries. Any investment that has the knock-on impact of creating a negative situation for someone else or somewhere else is not a good investment. Any industry that historically causes environmental damage is one to avoid, as well as any that have shown they do not care about the human rights of the people where they take their materials from.
The reason that investments exist at all is that there is always a need by companies to gain funding to further more projects. They sell the desirability of owning stock in their company by ensuring a good dividend or return is paid out ongoing. Even the most corporate of businesses act on this premise. It is not charity to invest in areas which can be shown to be of benefit to other people, it is just a sustainable investing option that helps others as well as you. Knowing what type of investment that can make an impact while delivering the safety and an expected dividend an investor requires is easy to do.
All investing should be done after a great deal of research, no matter what the investment is in. Taking all factors into consideration and weighing up the benefits and cost of the investment with the resulting use of the investment by others while result in a socially conscious investor. The best way of furthering positive activity globally while doing our own parts in reducing the harm that is done is by not helping the harmful companies do more harm. Being sure that your investment does not harm the workers of the company who will be producing the product you invest in is one aspect, as is making sure that the investment does not harm your neighbors and those around you.
Conscious capitalism has gained a global understanding within the past 10 years. The history of the conscious capitalism movement is important. To build a foundation of knowledge on and to know how to leverage the model correctly
It would be difficult to put an exact date on the origins of conscious capitalism because there have always been conscientious businesses working within industries that are generally wracked with unconscious ownership and material gain centered activities. Business has traditionally been focused on one thing: Profit Above All Else. However, many people would attribute the first public comments on the issue in modern times to Muhammad Yunus, 2006 winner of the Nobel Peace Prize, who spoke about inspiring the next generation to change the world. In 2007, Kip Tindell and John Mackey created the Conscious Capitalism Alliance. They then copyrighted the term?conscious capitalism.
There are four basic principles to conscious capitalism: purpose, culture, stakeholder, and leadership. The purpose has to be higher than just making money. The purpose must be the main focus of the business, beyond profit. Stakeholders, not shareholders mind you, in consciously capitalist businesses must understand that the business is an ecosystem and that it will not thrive without all aspects of the system being in harmony, which includes all the stakeholders including the employees and the customers. Leadership in a business that practices conscious capitalism understands that their role is to balance the needs of the business, the stakeholders, and acting as part of the team to inspire. Culture is a term that is comprised of the principles and practices of the business as well as their values.
Conscious Capitalism Movement
The conscious capitalism movement is built on the basic tenets of capitalism. Free trade, competition, entrepreneurship and voluntary exchange all being hallmarks. The movement asks business leaders to consider the reasons that they exist. To give acknowledgment to the fact that they play a role in the global marketplace. The movement works to change the basic capitalist business mindset that has formed in the past. ? Tending to the needs of all parties involved in their business, from employee to consumer. The bottom line is not the bottom line anymore. The idea of not polluting the world is also paramount while the conscious capitalism movement pushes businesses to consider how they sell the products that they sell, whether they are made of recyclable material, where they made and does that mean there are lots of food miles to be able to provide that product at a set price.
The working conditions of the workers who work for the suppliers of the products being sold by businesses are coming to the forefront, with a newfound focus on corporate social responsibility. This makes businesses give back to the local area that they operate in and any other area that they do business in which affects the society of that place. An example: clothing retailers building school in third world countries. These retailers import their products from these locations and have a benefit to the labor that they buy for the minimal price. The wages of these workers are also much in dispute. Businesses trying to meet the conscious capitalist criteria will seek to improve the lives of those who provide the products. These products are the foundation of the business, and the foundation of those products are the people.
Areas of business where the conscious capitalism movement is gaining traction include the travel industry, airlines, and grocers. In travel, there is worry about the impact of the tourist on the lives of the locals and landscape. These destinations rely on tourism but are also where natural disasters are common. Grocers are a constant source of focus. Poor working conditions in certain third world countries that harvest the produce, as well as the carbon footprint of the distance food must travel to be sold. The fair-trade movement is but one of many that are focused on changes in the food industry, to bring a better standard of life to the workers and areas where raw materials are grown and to even the playing field between the company that always profited and the land and people who were negatively affected by that profit.
There is enough financial and social pressure on many industries to move to a more conscious way of doing business. Many have realized that their existence and daily operations have a huge ripple effect on people around the globe. The power to affect greater change is theirs. They are writing the history of conscious capitalism now.