Beating Broke

Investing for Social Good

March 8, 2016 By Shane Ede Leave a Comment

This post brought to you by American Century Investments. The content and opinions expressed below are that of Beating Broke.

What if you could invest your money knowing that your investments were making a difference? We all want to make a difference. We usually do so by volunteering our time or by making cash donations to a cause. We do it with intent. But, we have to actively do it as well. I’ve talked before about the benefits of passive income, or income that is generated with little to no work on your part. Can we do more through passive giving?

American Century Investments is an investment company. As of March 1, they manage nearly $140 Billion dollars in investment assets. But, that isn’t what makes them special. What makes them special is what they do with their profits.

ACI was founded by a man by the name of Jim Stowers in 1958. Jim was a cancer survivor, as is his wife. In 1994, they founded the Stowers Institute for Medical Research. To help fund that institute, they created an endowment of $2 Billion that was made up of some cash gifts, and a 40% equity (ownership) in American Century Investments. Why is that important?

Because of that ownership stake in ACI, more than 40 percent of American Century Investments profits have been distributed to the Stowers Institute for Medical Research, a non-profit basic biomedical research organization. The Institute is the controlling owner of American Century Investments and has received dividend payments totaling over $1 billion since 2000.

$1.2 Billion in dividend payments. I’m going to let you think about that for a minute.

$1.2 Billion dollars is a lot of money. And because of the social thinking of the Stowers’, that money is going towards medical research. Research that could provide clues to cure disease.

Now, I don’t want this to come out sounding like a sales pitch. I want you to do your research before you invest your money with anyone. I do. If you’ve got a financial planner, talk to them before you do anything. But, what I do want to say is that, all things equal, if you can invest with a company that does a great deal of social good and still get equivalent returns with equivalent expense ratios, then wouldn’t you do that?

Ultimately, any financial decision you make shouldn’t be based on emotion. It should be based on numbers and facts. 9 out of 10 times, if you make a decision based on emotion, it’s going to be the wrong one. I know that. You should too.

But, I also know that my grandmother is a cancer survivor. My mother is a cancer survivor. I lost an aunt to cancer. Knowing that a portion of the profits of the company that I invest my money with is going towards research that could someday make cancer a curable or preventable disease is a pretty powerful motivator. An emotional one, to be sure, but powerful nonetheless.

All things considered, when it comes time to choose investments in the future, I’m going to make sure that American Century Investments is included in the options. That doesn’t mean I’ll pick them every time (or at all), but because of their structure, and the chance to do a little passive social good, they’ve earned a spot in the selection process.

What about you? What do you think of the idea of passive social good? How about the idea of an investment company with a higher purpose?

5 Reasons Why You Should Declutter Your Home Once a Year

March 2, 2016 By MelissaB 3 Comments

When we moved from Chicago to Tucson 18 months ago, packing was a nightmare. We hadn’t had a good decluttering session in nearly 3.5 years, since our last move, which was local. We spent weeks, yes, literally weeks, giving away and selling junk that we just didn’t use anymore before we could even start packing our possessions.

When we moved to Tucson, I vowed to keep on top of the clutter and the household messes. However, when we prepared to go on vacation recently and knew that our tidy neighbors would be coming in and out of our house for two weeks to cat sit, we realized we had a problem. The clutter, and the messes, had returned since the move.

I spent several weeks decluttering again. Several bags of items went to the local kids’ resale shop; several boxes went in the garage earmarked for a garage sale later this year, and a lot of crap just got tossed in the garbage.

Now that we’re decluttered once again, I can’t believe how much better I feel. From here on out, we’re decluttering once a year. Here’s why:

Make Additional Money

I made nearly $100 at the kids’ resale shop. I opted for store credit to get 30% more money. I’ll use that over the next few months to get my kids clothes and birthday presents. (Yep, the store sells NEW toys at a fraction of retail.)

I also made another $150 selling items on eBay.

We haven’t had our garage sale yet, but based on what we have to sell, I think we’ll easily make at least another $100.

Sure, these amounts aren’t going to even buy us a month’s worth of groceries, but we now have several hundred more dollars than we had a few short weeks ago, AND our house is much tidier.

5 reasons to declutter your house — Original IMG credit: Dafne Cholet on Flickr.

Save Money

There were several items like my son’s arm shield for archery, our headphones for the computer, to name a few, that we were planning to replace because we couldn’t find them. Surprise, surprise, once we decluttered and cleaned up, we found these and many more things. We saved ourselves from buying duplicates. These small savings add up!

Kids Outgrow Things

Kids grow. . .A LOT! Pants that fit last winter may be two inches too short this winter. Games that they loved to play with last summer may be too babyish this summer. Why keep all these relics of previous phases of childhood? Clear them out so you have more room. If you have an enormous amount of stuff in your house that you know will never get touched again, then searching for “rolloffs in my area” to help get it all gone can prove to be a very shrewd choice, as it will save you plenty of going back and forth with trips to the dump.

More Satisfaction With Being At Home

My youngest two children and I had a particularly painful decluttering session when we tackled all the papers, toys, and little pieces that were littering the floor in front of their toy area. But how much better we all felt when we could see clean, empty floor in front of the toy shelves. In fact, my children started playing immediately in that space and had a great time.

I notice now that the master bedroom is cleaner, I feel lighter and happier when I walk into the suddenly much more open space.

It’s Easier To Maintain Your Home

We hope to stay in our home for many years, but the reality is that my husband may not have a job here in another year or two. Until he secures a permanent position, we feel like our home is ours temporarily, so it’s important to keep up a maintenance and cleaning routine in case we have to put it on the market some time. Having a clutter free home makes this much easier.

What benefits do you get from a less cluttered home?

5 Strategies to Buy a Used Car without Being Scammed

February 11, 2016 By MelissaB 1 Comment

Besides your home, one of the biggest expenses you will face is purchasing a car. Unlike a home, cars do not appreciate. They are a depreciating asset that lasts for a finite period. Choosing the correct type of car within the price range you can afford can have long lasting consequences on your finances over the years.

John (name changed) is a 21 year old college student. He was in the market for a new-to-him car, but he knew he didn’t want a car loan.

He found the perfect deal on Craigslist. The car was listed for $9,000, but John knew that it had a Kelley Blue Book value of $12,000. John met the owner, went for a test drive, and paid $9,000 in cash. John was proud of his deal—until he went to transfer the title and learned the great deal he had just bought was a stolen vehicle.

Now, John, the smart student who didn’t want to go in debt for a vehicle, is out $9,000.

Everyone knows that dealer prices for used cars are usually at Blue Book value or higher, but the up side is that if you buy from a dealer, you don’t have to worry that the vehicle is stolen.

But what should you do if you want to find a good deal and don’t want to rely on a dealership?

Used Car Scammed — Original Photo via John Lloyd on Flickr

The investigator on John’s case recommended taking these precautions:

Try to buy used vehicles from family or friends. The best thing you can do is buy a used car from family or friends who are upgrading their vehicles. You know that the vehicle isn’t stolen, and you also have a good idea how well the vehicle was maintained.

Be wary of a good deal that is significantly below Blue Book value. If a seller wants to sell a car for much less than it’s worth, be suspicious. In this case, you should think of the old adage, if something seems too good to be true, it probably is.

Don’t trust a seller who only has his cell phone number as his means of contact. If the seller won’t give you any personal details or ways to contact him besides his cell phone, he may have something to hide.

Run a CARFAX check. Running a CARFAX is a good idea no matter where you’re buying the vehicle. A CARFAX will tell you how many owners have had the car, whether it’s been in an accident, how it was maintained, among other information.

Run a VIN check. Using the free service VINCheck, you can see whether or not the vehicle you’re considering buying has been stolen. Had John done this, he would have been tipped off immediately that something was not right with the vehicle he wanted to buy. As it turns out, his vehicle had been shipped down to Mexico where the VIN was altered. The vehicle was then brought back to the U.S. When John went to register the title, he discovered that the VIN he had did not exist.

Buying a car from a private party can be worthwhile and save you money if you take the proper steps. If you don’t, you could find that the bargain you purchased was actually a very expensive lesson.

Have you ever had trouble buying a vehicle from a private party or know someone who had trouble doing so?