Ethical investing gained the spotlight back in the 60’s during the civil rights movement and the boycotting of companies that either supported or were involved with the Vietnam War. People felt the push to align their investments and support companies that shared their personal ethics. Since 2005, we have seen the rise in popularity of ethical investing in the form of ESGs, this time with a broader focus which includes environmental, social, and governance factors, aimed to measure the sustainability of a company. There’s a certain “woke” element to ESGs driven by millennial investors around the world, but do these factors really encapsulate the morality of a company? Does it really help investors align with the companies that hold their same values?

ESGs are scored on factors like how a company effects the natural environment around it, if the company is meeting “green” legislation, how the company treats its employees and customers, if it supports the surrounding community, as well as the company’s diversity, its decision-making procedures, and its policies. In whole, an ESG score looks to grade a company on its direct and indirect effect it has on the wellbeing of others. On the surface, this seems like a great way to summarize how well a company may align with your personal ideals and beliefs. But, there are over 150 providers of ESG scores, with no regulated standard on how to grade a company. How do we know where a company’s ethics truly lie if each of these different providers use a different ideology to grade on? There are many unquantifiable factors involved, how are we to know what goes into the making of a company’s ESG rating?

MSCI, the largest provider of ESG ratings, posted on their website, “ESG ratings focus in on what’s significant to a company’s bottom line and compare it with its peer group.” And “we look at the company’s exposure to industry-specific risks, based on its business activities, size of its operations, and where it operates.”

There are many examples of companies receiving an upgraded score, even when they made no changes just because the ESG provider changed the focus or the way it weighted the score. For example, one fast food restaurant, whose emissions are greater than the whole country of Portugal, received an upgraded score. MSCI changed their grading focus by changing the rating of emissions from 5% to nothing, replacing it instead with an added environmental initiative. This “initiative” was the result of legislation mandating the restaurant to install recycling bins in select locations in Europe. In this situation, it looks like this company is making efforts to minimize its carbon footprint, but in reality its only maintaining the bare minimum requirements and receiving a higher score because of it. This makes it very difficult to analyze what a company’s ethical standing truly is. This is made even more difficult because companies aren’t required to track their ESG performance, allowing them to greenwash their companies and give a false impression.

In an interview done by Bloomberg, MSCI’s CEO was asked if he thinks investors have any idea that the entire system is based on the impact of the world on the company and not the impact of the company on the world, he responded no, he doesn’t think they have any idea. He even went on to say he thinks even investment managers who are putting these funds together don’t grasp it.

Another downside to ESG investing is its limits in diversification. You will have a much smaller pool of stocks to choose from which exposes you to the risks of those unique sectors. Portfolio managers may try to offset the higher risks by adding non-ESG or lower scoring ESG stocks. Many “green” investors may be surprised to find fossil fuel companies included in their ethical ESG mutual funds.

When investing, do your own research. Find the companies that align with your personal ideals.

The holiday season is upon us, and with it comes holiday shopping, party planning, and Christmas cards, which equals more spending. If you haven’t planned for all the extra spending in your budget and set that money aside your wallet could be in for a real tight squeeze. Let’s go over some money saving tips to help keep the holiday season merry and bright.

It may seem obvious, but the surest way to have more money is to eliminate your debts. One popular method is “snowballing” your debts. Focus on paying more on a single debt, once it’s paid off keep paying that same amount, but apply it to the next debt. By doing this your spending stays the same, but you continue to pay off your debts at an accelerated rate.

Another sure way of saving money is to stop paying for so many things. Cancel any extra or unnecessary subscriptions or services that are cluttering up your budget and sucking up your extra cash. We all enjoy having entertainment, but sometimes it’s easy to take that to extremes in today’s world where there are so many extra things available. Choose the one or two you use the most and cancel the others.

When budgeting time comes, many people are shocked to find out how much they spend on food, especially if you eat out regularly. A quick way to cut down at the grocery store is to stop purchasing the “little extras” like the extra bag of chips, cookies, or the eye catching goodies at the register. Those little purchases add up. When doing your grocery shopping, make a list of items you need (this usually requires a bit of meal planning), and only get the items on your list. Don’t be afraid to use coupons. Just like all those extra little purchases add up, so do the little savings here and there provided by coupons. Money not spent is money saved. There are also apps that will pay you for scanning your receipt. Every little bit helps.

When it comes to eating out, most people know that a restaurant meal costs way more than one cooked at home. One of the most satisfying ways to save money might just be to start cooking at home. While simple in idea, home cooked meals can save you quite a bit! We live in a fast paced world and quick and easy meals have become the norm. However, there is much to be said about a good old fashioned homecooked meal. Not only does it save money, but it brings family and friends together. It helps you take time to enjoy the moment, which brings even more value to those moments.

The average national cost of a chicken dinner at a restaurant is $16.80. To make chicken dinner at home, including 8 oz of chicken, a side of mashed potatoes, and a side of vegetables costs you about $3.20 a serving. If you multiply that by the size of a family of four you’re looking at over $67 (not including a tip or drinks) at a restaurant compared to just under $13 at home. That is a huge savings! If you were to normally eat out once a week, as a family of four for one month, you’d be paying about $335 compared to just $65 for the homecooked meal. That’s a difference of $270 over the course of the month for just one meal a week! Imagine if you ate the majority of your meals at home. The savings would pile up, cooking up quite a savory bottom line.

Try this old fashion chicken dinner recipe!

Ingredients

For the chicken:

4 boneless, skinless chicken breasts

1/2 cup flour

2-3 TBS vegetable shortening or cooking oil

1/2 tsp salt

1/4 tsp pepper

For the mashed potatoes:

2 lbs. Russet potatoes, peeled & cubed

3/4 cup Heavy cream

3 TBS Butter

Salt / pepper to taste

Instructions

Chicken:

Preheat oven to 350 degrees.

Preheat a large skillet on med. high with shortening or oil. In a medium sized bowl mix flour, salt, and pepper.

Cut chicken breasts into similar sized pieces

Dip each piece of chicken into the flour, gently turning until the chicken is completely covered. Carefully place the coated chicken into the hot pan. Brown sides evenly. Transfer chicken to a large baking dish. Add a little water to the bottom of the pan and cover with lid or foil. Bake for about 40 minutes, or until chicken juices run clear.

Mashed potatoes:

Place peeled and cubed potatoes in a large pot. Cover with water, add salt and boil until potatoes are tender, about 15-20 minutes.

Drain the water. Add cream and butter, then mash until potatoes are fluffy and smooth.

Top with butter or your favorite gravy.

Serve meal with your favorite vegetable.

*Chef’s note:

This recipe is easy to customize with different flavors! Try adding some fresh garlic, onions, or other aromatic herbs like rosemary, thyme, or parsley.

Everyone loves cookies at the holidays, well, most everyone. Here's a fun traditional Christmas cookie recipe, just like Grandma used to make!

¾ cup butter, softened

1 cup sugar

1 large egg

Cream butter and sugar together. Add egg and mix until combined. Add spices and molasses and mix thoroughly. Add the flour and mix a final time until everything is well combined.

Unbelievably, it’s almost the end of the year. Before you know it it’ll be Thanksgiving then Christmas, and in a blink it’ll be the new year and the end of the 2022 tax year. That makes now the perfect time to start going over and reviewing your tax information.

It’s always good to review your previous year’s tax return. Take note of any changes that have occurred since the last time you filed. Did you move, retire, switch jobs, or get married? Has your filing status or tax bracket changed? Each filing status comes with different tax bracket income thresholds, standard deductions, and eligibility of certain tax credits.

Tax deductions help to reduce your taxable income, which means you will have a lower tax bill, so you don’t want to miss out on any! However, you need to make sure you have proper paperwork. Having all your required documentation is necessary to claim your deductions and will help protect you if you get audited.

Take some time to find all the deductions you are eligible for, things like retirement contributions, educational expenses, medical bills, property taxes and mortgage interest, or charitable donations. Likewise, you want to be able to utilize any tax credits available to you. As with deductions, you will need to your documents in order to claim them. Planning ahead for the following year, if you don’t already, have a separate file for any paperwork or documentation relating to your taxes, this way you won’t miss any when it comes time to file.

Look back over your medical expenses for the year, they will only be eligible for deductions for the amount that exceeds 7.5% of your adjusted gross income. For example if your AGI is $65,000 and you had $8,000 in medical and/or dental expenses you would be able to deduct $3,125 (7.5% of $65,000 is $4,875. Take $8,000 expenses subtract $4,875 which equals $3,125 eligible for deduction). If you add all your medical expenses and they do not exceed the 7.5% threshold consider moving some dental/doctor visits, medical purchases or procedures to December in order to include them in the current tax year’s existing amount and give yourself that push over the 7.5% line. If you are nowhere near the 7.5% maybe consider the inverse and hold off on scheduling things until the new year, and make plans to maximize those expenses in the following tax year.

You will want to consider if your income will increase or decrease next year because it may change your tax bracket, which would change the percentages relating to your deductions. If you are looking at a significant increase, wait until the next year to take the deduction because it will be worth more as a percentage of the higher income. Likewise, if you will be making less money next year, you may want to accelerate purchases for the current year.

The end of the year is a great time to review your retirement plan. You may be eligible to deduct certain contributions to a traditional IRA. Pay attention to your annual contribution limits for accounts such as your 401(k) or 403(b).

As we round the corner into the next tax year make plans now so you can maximize your deductions and credits. You don’t want to leave yourself scrambling come April, you also don’t want to miss out on money you could be saving. As boring or redundant as it may seem, the best advice is always to plan ahead.

The most recent data released by the Labor Department revealed the largest quarterly drop in productivity since 1947, decreasing at an annualized rate of 7.5%. The drop in productivity was concurrent with the largest rise (11.6%) in labor costs since 1982. Both of these measures are also indicators of inflationary pressures for both companies and consumers. Many companies have been passing along higher costs to consumers, raising prices across the country faster than they have in the last 40 years. Eventually prices will be forced to level out because of competition between companies which will hold prices steady which will require these companies to absorb the higher costs. This could lead to decreased levels of hiring and lower wages as companies struggle to maintain profitability levels.

Data surrounding labor during the pandemic has been considered unreliable and inconsistent by many economists, meaning that the true effects of the COVID-19 pandemic and worker retention are still not certain. An essential data set is labor productivity, which is a measure of how efficiently companies are utilizing workers to produce products and services. This year, the largest four-quarter drop in labor productivity was observed since the fourth quarter of 1993 according to the Bureau of Labor Statistics, marking a historic decline in productivity. Another Labor Department report showed that jobless claims increased to 200,000 at the end of April, the overall number falling to 1.38 million, the lowest level since January of 1970.

Federal Reserve survey results, reported in the Fed’s Beige Book, have identified that a growing number of manufacturers and industrial companies are

increasingly moving towards automation, replacing previously desired workers with robotic gear. Rising wages and a dwindling labor pool have forced some companies to resort to machines instead of hiring workers.

When managing your personal finances, we’ve talked about how important it is to pay yourself first-to put money into savings and then budget and spend what is left over. This creates a stable financial foundation to build from and rely on. When running a business, it’s important to follow the same principle and put your profit first. To have a successful business you need to make a profit. The strength and longevity of your business only lasts while it’s profitable. When you put your profit first you are determining to stay in business.

What does it mean to put your profit first? Traditional accounting says, expenses are deducted from sales and what is left over is considered your profit.

[Sales – Expenses = Profit]

But, just like paying yourself first, you take a percentage from each sale as profit and then use the remainder to pay for expenses.

[Sales – Profit = Expenses]

The overall goal is to develop a system that will build your business in a sustainable way in order to create long term success. Big picture, you would be grouping portions of the business sales and putting them into separate accounts. These will be comprised of profit, taxes, operating expenses, and owner’s pay. To make this system work you will put predetermined percentages of your sales into the various bank accounts starting with the profit account. How much you put into each account is determined by your Target Allocation Percentages (TAPs). This will be a shift from the Current Allocation Percentages (CAPs).

At first this may be a difficult thing to do, as it goes against the traditional model, but making the shift mentally and committing to the future of your business will make all the difference. When you consciously put money into your separate accounts it makes you more aware of how you are spending your money and helps you to spend more wisely. All of the accounts together can help give you a visual map of where your company is at and help you see how to get to where you want your company to go.

Perhaps the hardest part of this process is managing your expenses. Initially, you may need to cut back on your unnecessary expenses. This is a hard thing to do, but remember it’s a lot easier to cut expenses than it is to conjure up new sales. When making purchases or analyzing expenses the key thing is asking yourself, “do I (or my business) really need this?” If you’re able to determine that it isn’t necessary, or could potentially hurt your profits, cut it from your spending. It could take a few months to pay down debts, but by whittling down your expenses and being more conscientious you will start to build your cash reserves.

Eventually the goal is to learn how to enjoy saving your money as much, if not more, than spending it. When something makes you happy, you’ll keep doing it. Celebrate the moments when you opt out of spending unnecessary money, make it a big deal. Over time, you’ll build momentum and you will enjoy those moments and establish good, healthy money management.

When pandemic assistance funds were first issued, a lot of people thought it was great to have the extra money. Unfortunately, there’s no such thing as free money. Now that those extra funds have been spent, and many people are making less or are unemployed, consumers are turning to savings and credit to pay for essentials. For those consumers that managed to save their stimulus funds, they’re finding the need to tap into those savings in order to keep up with inflation. Now many consumers have exhausted their cash reserves and turning to easy credit as the answer. This lead to consumer credit usage that escalated by $38 billion in April, bringing credit card debit to record levels.

Even though overall wages have risen roughly 6% over the past year according to Labor Department data, the increase is still not enough to keep up with an even higher inflation running at over 9.1%, the highest we’ve seen in America in 40 years. As households start to experience shortfalls, many resort to credit to meet their month-to-month expenses paying for things like bills, gasoline, and food.

Auto loans and credit card debt have seen the largest usage increases as tracked by the Federal Reserve over the past few months.

Mortgage debt has also risen, but mostly at the upper end of the credit score scale. Credit scores on newly originated mortgages remain relatively high, reflecting continuing high lending standards by lenders. The median credit score of newly originated mortgages was 776 during the first quarter of 2022. Analysts also believe that median credit scores may possibly begin to fall as consumers exhaust their cash savings and tap credit cards.

Image by Jaleigh Morris