Financial Advice on How to Make Your 401(k) Plan Work for You –

Not only Fossil Free but Set-up free too!

Not only Fossil Free but Set-up free too!

Your 401(k) Contributions: Understanding the Options

October 21, 2014

By Rob Thomas

DailyWorth Expert

Founder of Social(k). Sustainable retirement planning entrepreneur

Congratulations, you are enrolled in the new 401(k) at your company. Now what? Here’s how to make your 401(k) plan work for you.

Find Out if You Can Auto-Enroll: Hopefully your employer uses the auto-enrollment function. This allows all eligible employees to be enrolled, with a set payroll deduction amount and fund choice made by the employer. Employees can change investment options, deduction amounts and tax status, and can opt out at will. However, by enrolling automatically, the big hurdle of getting started is avoided.

Take the Free Money: If your employer is offering a matching contribution, take it. With a match, when you put in 3 percent, they put in 3 percent, for example. The employer will set the match amount annually. In addition, vesting of the employer’s money is set by the employer, which can go from immediate vesting — the money is yours when it hits the account — to five years out with 20 percent per year vesting.

Decide, Pre-Tax or Post-Tax? Now you have to choose which contribution type is best for you. Do you want to pay now, or pay later? With the pre-tax option, you don’t have to pay taxes on the amount of money you contribute to your retirement fund; you only have to pay taxes on your earnings that are not put into the fund. Once you’ve retired, you will pay taxes on the final amount as you withdraw it.

The other contribution type is the Roth — aka post-tax— option, which requires you to pay taxes on the contributions when you earn them. We know, it sounds much less appealing because money is coming out of your pocket up front, but stick with us for a minute. If you pay taxes on your earnings now, at retirement the contributions and earnings come out tax-free. Yes, you heard us right! No taxes due on the withdrawals at retirement, ever! That’s the deal Uncle Sam made with you, if you choose that option.

Leave the Money Alone: A 401(k) is like a bar of soap: The more you touch it, the smaller it gets. Most company-sponsored retirement plans offer broad-based options, which allow individuals to invest in a diversified mix of stock and bond funds according to risk and thereby maintain a more diversified portfolio. Pick a broad strategy and stick with it through rebalancing.

Robert Thomas is a member of the DailyWorth Interface program. Read more about the program here.

Why ask GMO-free food company employees to invest in a retirement plan that includes Monsanto? Employee retirement plans should offer solid investments that also match the company’s spirit.  Social(K) –

via Financial Advice on How to Make Your 401(k) Plan Work for You –

Green Bonds Merge Investor Goals

Green Bonds Merge Investor Goals


When it comes to investing in the environment, it’s getting easier to be green.

Green Bonds have been around for a while: Washington State sold more than $3 billion worth in 2008 to combat climate change, and Massachusetts sold more than $100 million to improve energy efficiency in state buildings, river revitalization and land acquisition in June 2013.

But the space has grown since then, according to a July report by the Climate Bonds Initiative:

- The total universe of bonds linked to climate-change solutions amounts to $502.6 billion compared to $346 billion a year ago.

- $35.8 billion of that total is composed of green bonds issued by corporations and development banks.

“Investors are concerned about climate change,” Sean Kidney, chief executive officer of the Climate Bonds Initiative, wrote in the report.

“The investment opportunities we find are safe and secure investment-grade bonds. This is a Dull Green Market—just how pension funds and insurance funds like it.”

Green Bonds have underwritten projects that include transportation; clean, renewable energy (solar and wind); energy-efficient buildings and industry; agriculture and forestry; waste and pollution controls; clean water; and “brownfields” redevelopment (the development of land with environmental issues). Toyota, Nissan and Chevrolet have used them to develop electric and hybrid vehicles.

The report indicated urgency for such projects, noting the International Energy Agency has said the world has five to 10 years to avoid reaching “climate tipping points” and “trillions in additional finance will be needed.”

via Green Bonds Merge Investor Goals.

A New Opportunity For Investing In Productive Farmland | Social(k) client making a difference

A New Opportunity For Investing In Productive Farmland

Creating value by improving the land

by Adam Taggart

Sunday, August 10, 2014, 1:13 PM

Tags:Craig Wichner, farmland, Farmland LP, Organic, real estate investment trust, REIT, soil

Over the past few years, we’ve tracked the success of Farmland LP, a fund created to increase the economic yield of farmland through sustainable farming practices.

Their approach is notable in a number of ways. It seeks to improves the quality of the underlying land. To avoid use of fossil inputs. To increase the yield per acre. To enable the production of vegetables, grains, and meats on acreage that before was monocrop. To employ more farmers per farm. To be more profitable than conventional farming. To improve the food resiliency of the local community. To reduce its dependency on liquid fuel transport by serving local markets. To generate annual returns for its shareholders, plus appreciation on their share of the underlying farmland.

The team believes there is an arbitrage in value that can be unlocked by reversing the damage modern farming has done to the land. After visiting their largest property this spring, I put together a detailed write up of how exactly they’re pursuing this, which can be read here.

Today’s big news is that, while the initial LP fund closed to new investors last year, the same management team has just launched a new fund, this time structured as a real estate investment trust (REIT).

This is notable for several reasons. It’s a larger fund, which should enjoy greater economies of scale than the original one. And, the new REIT structure will eventually enable the fund to become publicly-traded (likely in 5 years or so, depending on key milestones). Once this happens, much smaller investors will be able to purchase shares — finally making the dream of participating in productive farmland an option for all.

Those who would like to learn more about Farmland’s operations and/or new REIT can send a request for more information here. Note that their REIT is available to accredited investors only and that Peak Prosperity has an existing business relationship with Farmland (full details will be provided when opening an account with the Fund or at any time upon request.)

Click the play button below to listen to Chris’ interview with Craig Wichner (24m:50s):

via A New Opportunity For Investing In Productive Farmland | Peak Prosperity.

Looking Ahead Responsibly

February 2014

Running the Fund:Looking Ahead Responsibly

Jing Wei

Experts anticipate the increasing importance of ESG for plan investors

Ask Adam Strauss, a portfolio manager at the Chicago-based Appleseed Fund, to describe the way he evaluates and selects investments, and he will give an answer similar to that of many active managers.

“We’re stock pickers, so what we’re looking for is to invest in high-quality companies with stocks that are significantly undervalued,” Strauss says. “And we look very closely at balance sheets. If a company experiences a temporary problem in the business but the balance sheet is strong, you’ve got lots of time on your side to turn things around. If it’s weak, then that’s working against you.”

It is only after discussing pricing power and competitive advantage that he brings up the term “sustainability” or “ESG,” short for environmental, social and governance. The term has become shorthand for investment methodologies that consider sustainability factors in assessing risk and return.

ESG considerations can involve anything from an investment’s carbon footprint to its sensitivity to potential resource or energy shortages. Other elements include investment chain alignment, transparency and active asset ownership.

Strauss says the Appleseed Fund incorporates ESG not only to ensure that shareholders own environmentally and socially responsible companies but also as a means of eliminating risk and boosting potential returns.

“Our goal is to beat the market, so we’re very focused on delivering returns and doing it with less risk,” Strauss says. “We’ve beaten the markets by several percentage points per year since starting in 2006, and we’ve also delivered an extremely low beta.”

Interestingly, it is the traditional risk and return factors that will be most important for ESG funds, as they are for all funds, when it comes to penetrating the retirement planning marketplace. That is because the Department of Labor (DOL) has affirmed in a number of advisory publications—especially two issued in 2008 by its Employee Benefits Security Administration (EBSA)—that ESG factors must be considered secondarily to the economics of any investment being contemplated by a plan under the Employee Retirement Income Security Act (ERISA).

In other words, according to the DOL, noneconomic factors can serve at most as a tiebreaker when retirement plan fiduciaries are considering investment choices. That holds true even for plans at issue-dedicated nonprofits and other social organizations, where participants may be more willing to consider ethics during the investment process.

Despite the fiduciary hurdle, experts anticipate certain ESG factors—namely, climate risk, energy pricing and resource scarcity—to become significantly more material in long-term investment analysis and therefore to become more important to retirement plan investors in the years ahead.

via – Looking Ahead Responsibly.

No Recession Here

The 32nd annual Natural Products Expo, the largest on record with more than 60,000 industry members and over 2,000 exhibiting companies, filled more than 1 million square feet at the Anaheim Convention Center March 8 – 11, 2012.

Happy Booth

The Yellow 108 hat booth was a popular stop

My first Expo West was 1999. Freshly licensed as financial advisor I set out to establish my value. Shared interests and habits brought me to this community, and I’ve been here since. These businesses offer a simple but monumental improvement over the traditional offering of a single bottom line for-profit. Instead of gearing revenue toward the benefit of shareholders, they make sure it benefits all stakeholders. That means shareholders, employees, and the community at large.

Organic, Natural, and Fair Trade, these widely adopted terms express the values of the community I set out to do business with. I was looking for clients who agreed that screens for social responsibility on their long term investments was what their stakeholders wanted. More than a decade ago, at Expo West, I knew I had found my tribe.

Honest Tea, Numi Tea, Sambazon, Guayaki, Organic Trade Association, Tierra Farm and Oregon Tilth are a few of the companies that I met early on and began long standing relationships. Every year I returned since 1999 I found new, like-minded clients. This year I came back again, and thrilled to see how hugely the community had grown.

For all the wrong reasons I missed the last five years of Expo West. A few visits to Expo East, the smaller version of the show, and a full travel calendar kept me away. Those days are over. Expo West 2012 was the largest Natural Products Expo to date and every person I spoke with said business was booming. Attendance was up 13% from 2011 with over 58,000 industry-related people and 3,000 exhibitors. The show is the second largest at The Anaheim Convention Center.

That larger show, held by The National Association of Music Merchants, has been around three times longer than ours, for 110 years. Unlike the Natural Products Expo, NAMM represents an industry composed of almost 100% discretionary spending. Seems to me like we’ll be #1 in no time.

Organic, Natural, and Fair-Trade products are now consumer staples. Every time people go to the store they realize that they do not want products or services rendered at the expense of others. A healthier profit can be made by taking care of every stakeholder affected by your business–employees, communities, and shareholders.

Being able to provide for this particular community at Expo West makes me smile everyday. Thanks everyone.

Rob Thomas
President & Founder

Social(k) Smarts: Keeping Score

Video: Social(k) Smarts: Keeping Score How are you keeping score?

Some people watch baseball and do line scoring. Others keep score with box scores. Line score is similar to single bottom line accounting. Box score is like triple bottom line accounting. How do you keep score of your financial returns?  How do you keep score of the way the game was played?

Keeping score using line score, or single line accounting, measures returns only.  $100 goes in and $125 comes out.  Financial wizards can measure financial returns with great precision.  They can even measure the amount of risk taken for the return.  But at the end of the game it is a line score.  What is harder to measure is how the game was played, how the returns were made.  If you want to really understand the dynamics of a specific game you use box scores.  This brings much more depth to the story of the game, or the investment.

We know Portfolio 21, a mutual fund, returned 2.99% annually, over the last five years as of Dec 31, 2010.  We know The Vice Fund, also a mutual fund, returned 2.43% annually, for the same time frame.  Very similar returns as seen from the line scores.

Let’s look at the box scores.  What companies do they look at to invest in?

The Vice Fund invests in companies, both domestic and foreign, engaged in the aerospace and defense industries, owners and operators, gaming facilities as well as manufacturers of gaming equipment, manufactures of tobacco products and producers of alcoholic beverages.”

Portfolio 21 invests in companies designing ecologically superior products, using renewable energy, and developing efficient production methods. Portfolio 21 companies seek to prosper in the 21st Century by recognizing environmental sustainability as a fundamental human challenge and a tremendous business opportunity.”

The box scores add a deeper understanding of the game. Triple bottom line accounting adds a deeper understanding of the investment.

How are you keeping score of your investments?  Are you measuring success by dollars only? Isn’t wealth more than cash in the bank? Returns at any cost, certainly not.  We can each use our own values and beliefs to decide what is important to measure, but we should be measuring more than the simple return.