bUSINESS & FINANCE
Previously, I discussed how stress can launch a physical and mental attack on our work and life. Gradually, stress can affect our behaviors by causing unrecognizable, irrational, out-of-control versions of ourselves to emerge. This impedes our productivity.
Clinical psychologist Naomi Quenk calls this condition being "in the grip" of stress, and "grip" experiences can cause Dr. Jekyll/Mr. Hyde-like transformations. The behaviors we exhibit are largely driven by our different personalities. Therefore, stress management techniques that take into account our unique personality preferences are helpful.
Personality And Mental Functioning
According to the Jungian model of personality and mental processing, we subconsciously differ in terms of how we each prefer to:
1. Gain mental energy
2. Gather information
3. Make decisions
Some gain their mental energy from inner ideas and experiences (introverts), while others gain it from external sources (extroverts). Being forced to experience your least preferred energy source can be a significant cause of mental fatigue and block your productivity.
Gathering Information In The Grip Of Stress
You gather information about what's going on around you largely through the mental functions of sensing (focusing on current realities through use of your five senses) or through intuition (focusing on the big picture). We all gather information using both methods. However, one is typically more dominant or preferred.
As long as you are devoting your energy to your dominant mental function, your inferior function is at rest. However, when circumstances such as illness, stress or fatigue set in, the least preferred mental function can come out of hibernation, forcing your mind to function in a way that is uncomfortable. Similar to being forced to write with your left hand when you are right-handed, being pushed to use your inferior mental function to gather information can place you in the grip of stress, slowing you down and decreasing the quality of your work.
Making Decisions In The Grip Of Stress
Decision-making is also a mental function, and you will typically make decisions through either thinking or feeling. If thinking is your preference, you may prefer to make decisions based on logical, focused, impartial, objective analyses of information. This would be your dominant mental function. Making decisions based on feelings would be your opposite (inferior) function and would typically receive the least amount of your energy. Again, we each make decisions using both methods. However, you are typically more comfortable using one over the other and may find yourself in the grip of stress when pushed to use your inferior decision-making function.
Personality-Based Stress Reduction Techniques
Before reading further, ask yourself:
1. Am I more mentally energized from within (introversion) or from the outside world (extroversion)?
2. When gathering information, do I feel more comfortable using sensing or intuition?
3. When making decisions, is thinking or feeling more natural for me?
Here are some stress reduction techniques specific to your preferred decision-making and information-gathering styles. Discover how your experiences of gathering information and making decisions in the grip can lead to personal growth.
When Gathering Information
Extroverted-sensing types can release the grip by:
• Having a backup plan
• Receiving help from others to remove doubt about dreaded consequences
• Receiving help with prioritizing
• Being heard without judgment
Gathering information in the grip can teach extroverted-sensors to:
• Reduce their fear of possibilities
• Embrace the unknown
• Tap into their intuition
Introverted-intuitive types can release the grip by:
• Seeking a change of scenery
• Taking quiet alone time to recharge
• Making their usual schedule lighter
• Not receiving advice or suggestions from others
Gathering information in the grip can teach introverted-intuitives to:
• Understand and accept people unlike them
• Better adapt to outside details
• Create more realistic goals
Introverted-sensing types can relieve stress by:
• Taking time alone to analyze or reflect
• Hitting the bottom to emerge renewed
• Being taken seriously without being patronized
• Receiving help with excessive details
Gathering information in the grip can teach introverted-sensors to:
• Have a broader perspective
• Have clearer values
• Be more flexible in relationships
Extroverted-intuitive types can relieve stress by:
• Taking time to analyze their grip experience
• Exercising, meditating or getting a massage
• Receiving support without being patronized or judged
Gathering information in the grip can teach extroverted-intuitives to:
• Have a broader perspective of expectations of self
• Appreciate facts and details
• Plan better and be more structured
• Identify and avoid grip-causing stress and fatigue
When Making Decisions
Extroverted-thinking types can ease stress by:
• Allowing themselves to experience their deep feelings
• Being allowed to vent
• Talking to a person they trust
Decision-making in the grip can teach extroverted-thinkers to:
• Know their limits
• Accept the irrational
• Understand the importance of close relationships
Introverted-feeling types can ease stress by:
• Allowing the experience to expire on its own
• Engaging in relaxing, distracting activities
• Receiving validation for their feelings
• Having time to reflect
• Being allowed to have their say until they are themselves again
Decision-making in the grip can teach introverted-feelers to:
• Accept their power needs
• Embrace their competencies
• Manage unrealistic ideals
Introverted-thinking types can ease stress by:
• Having their alone time and personal space (psychological and physical) respected by others
• Being excused from responsibilities
• Not being asked how they feel
Decision-making in the grip can teach introverted-thinkers to:
• Accept the illogical
• Embrace their vulnerability
• Express deep feelings
Extroverted-feeling types can ease stress by:
• Studying or journaling alone
• Starting a new project
• Being allowed to be left alone (to mentally work through things)
• Being taken seriously and allowed to vent
Decision-making in the grip can teach extroverted-feelers to:
• Decrease their need for harmony
• Trust their own logic
• Manage their response to adverse situations
Think of a grip experience you may have had recently. How will you better manage your stress to remain productive moving forward?
Have you ever experienced the type of day-to-day distress that affects your productivity or even your health? Have you ever found yourself puzzled at how stress has caused you to act like a completely different person? Are you thinking, “I’ve heard this all before. I know stress. It's everywhere, so we just have to live with it.”
False! Stress is hazardous to your health, and it can sneak up on your life before you even see it coming.
Stress In Your Work-Life Overlap
When I find myself doing something that requires me to physically balance myself, like skating or riding a bike, I'll admit that I have found myself losing balance, wobbling back and forth, arms flailing, trying not to fall over. (Don't judge! I'm better at reading and research.)
This isn’t how we should be living our lives. In fact, many of the things that stress us out at work are rooted in the same challenges that also overwhelm us outside of work, like managing our daily habits, thinking habits, emotions, moods and biases.
These days, it seems that work and life do more overlapping than balancing, and stress likes to hide right in between that work-life overlap. In order to challenge stress, it helps to know where to look and what to look for.
'Good' Versus 'Bad' Stress
Stress is a natural reaction; in some form, it's actually good for you. Good stress or “eustress” is a positive motivator when it comes to things like job interviews, promotions or special celebrations. Our bodies are designed to react to stress in a way that not only keeps us energized in high-stakes situations but protects us when confronted with threats.
Bad stress or “distress” comes in three forms, and our individual experiences and responses to each type are all different.
• The most common type of stress is acute stress, which stems from the recent and anticipated demands of everyday life. This is what you feel when someone cuts you off in traffic or when you have an argument with a spouse. In large doses, this type of stress can be exhausting.
• Episodic acute stress occurs when acute stress becomes habitual. It plagues people who tend to have shorter tempers, are frequently rushed, overextended, tense or anxious. These characteristics are magnified even more in the workplace. At the episodic acute level, a person becomes so accustomed to these feelings that it becomes implanted into their personalities. They often attract a lifestyle of chaos, excessive worry, pessimism, irritability, anxiousness, anger, hostility and overcommitment.
• The highest levels of stress harm our mind, body and overall life. Long-term, untreated, episodic acute stress can morph into chronic stress in response to things like dysfunctional family situations, poverty, abuse, toxic work environments, trauma and other perpetually stressful situations.
When we experience a situation that causes us stress, our brains perceive it as a threat and sound an internal alarm. This alarm causes the release of hormones including adrenalin, which increases blood pressure and heart rate, and cortisol, the stress hormone responsible for communicating with the parts of the brain that control mood, fear and motivation. This is why stressful situations can literally make us feel as if we are being attacked.
For the most part, when stress hormones are activated, they return to normal levels once the “threat” has passed. However, when constant stressors keep our alarm systems activated, the hormone release continues, leading to overexposure. As a result, symptoms such as anxiety, depression, digestive issues, headaches, heart disease, problems with sleep and weight management often appear. In fact, prolonged exposure to the stress hormone cortisol has been found to shrink areas of the brain that control memory.
There are warning signs of different types of stress, and they can become bigger issues if they are not contained. We experience emotional and physical symptoms even when we aren’t paying attention, including:
• Short temper
• Muscle tension
• Dry mouth
• Stomach issues
• Loss of appetite
• Lack of focus
Many times, these symptoms are incorrectly attributed to other issues or even camouflaged by medication or other substances. Therefore, just because you don’t notice it, doesn’t mean that stress isn’t there.
At the acute (short-term) level, symptoms are manageable but can cause mood and concentration difficulties and interfere with your productivity.
At the episodic acute level, more serious health issues can begin to appear, and professional help may be needed in order to come up with an individualized plan of attack.
Left untreated, chronic stress can lead a person to feel as if they are trapped with no way out. Ultimately, a higher incidence of suicide, cancer, violence, heart attack and stroke make this the deadliest form of stress that people experience. (If you feel like your stress is headed to a critical level, discuss how you are feeling with your doctor or a licensed mental health professional.)
While there are many well-known methods of attacking stress, there really isn't a one-size-fits-all method of reducing it. We all differ in terms of how we live, how we interact with the world, how we gain energy, and how we respond to different situations. In fact, both genetics and life experiences affect how we respond to stress. This is why stress management techniques really need to be tailored to the individual. It's possible to gain clarity and take power over stress at the early stages by diving deep into your unique goals, thinking habits, personality preferences, emotional wellness and conflict modes.
In April 2019, Juana Velosa was excited for her upcoming work assignment in Africa. As part of her job, she would be spending three months on the continent.
As she packed her bags and prepared for the trip, she made sure to have a solid checklist in place to make sure she didn’t miss anything. This included making sure all of her bills would be paid in her absence, and logging into her credit card account and paying off the balance in full.
When she finally returned home in late July, she quickly got back into her normal routine. A few weeks later in early August, she went shopping for clothes and when she tried to check out, her store-brand credit card was declined due to an unpaid balance.
Perplexed, Velosa phoned the bank immediately to get more information. Her first instinct was that she was the victim of fraud. She was told that a purchase she made prior to her trip was not included in the statement balance she paid off (it was included on the following month’s total).
Her initial purchase was for $59.68, but it ballooned all the way to $169.99 due to three late charges and $7.31 in finance charges. In order to avoid being charged more fees, she immediately paid off the full balance including the fees (the bank waived the most recent late fee). Thinking this was now behind her, she moved on with her life.
It wasn’t until recently that the seemingly innocuous unpaid balance from her time in Africa began to haunt her again. She was hoping to refinance the mortgage on her home in order to take advantage of lower interest rates. She eagerly applied and was awaiting the approval when her loan officer called her with bad news: her application had been denied due to the snafu with her credit while she was in Africa. Her credit score had plummeted.
What started as a harmless shopping trip in April for $59.68 worth of clothing, may now cost her thousands of dollars in interest payments on her mortgage due to not qualifying for the refinancing. Refinancing a mortgage works the same way as refinancing student loans, which means that shaving a few points off of your interest rate can make a huge difference in the total amount paid over the life of the loan(s).
Velosa is frustrated because she claims she was never notified by the bank regarding the late fees or unpaid balance, and only found out when she coincidentally returned to the same store to make another purchase in August. If she wouldn’t have stopped in that day, the total balance could have easily grown to hundreds of dollars, without her realizing it.
Velosa’s story should serve as a cautionary tale for all credit card users, because it’s easy to see how this could happen to anyone. Even a single innocent misstep can have far-reaching financial consequences.
Here are a couple of things you can do in order to prevent something similar from happening to you and ruining your credit.
1. Check Your Credit Report Regularly
You can get your official credit report for free from AnnualCreditReport.com. By law, each of the three major credit reporting bureaus (Equifax, Experian and Transunion) must give you a free credit report every 12 months if you ask for it. I request one from a different credit bureau every three to four months throughout the year.
The most important things you should look for in your report are derogatory marks, accounts you don’t recognize or any inaccuracies. Making sure your credit report is accurate will go a long way to help you detect fraud and catch any missed payments early.
In addition to getting a free credit report, you can also get free credit scores. Sites and companies like Credit Karma, freecreditscore.com, Credit.com, Mint and Chase Credit Journey will all give you free scores. Some of them are estimates using their own models, but I’ve found them to be very accurate. I’ve used Credit Karma for years and also recently started using Chase Credit Journey. They all do a good job.
You should never need to pay for a credit report or a credit score. You can freeze your credit for free too.
2. Automate Your Payments
One way to avoid missing payments is to take the human element out of it by setting up automatic payments. You will still need to make sure your payment account has enough money in it to cover the full balance so that you don’t overdraft.
Auto-payments will help you avoid late fees and unwanted interest charges, which as we saw in Velosa’s case, can quickly spiral out of control.
Even as a personal finance writer, I used to occasionally forget to pay a utility bill on time, so beginning a few years ago, I began to automate as many payments as possible. From utilities, to credit cards, and even rent. It means I spend less time doing repetitive tasks every month and I never miss a payment. I have a credit score over 800 as a result.
It’s also important to remember that your credit score isn’t the most important thing when it comes to your personal finances.
As for Velosa, it remains to be seen whether her credit card company will heed her request to have the negative remarks removed from her report. Her mortgage refinancing hangs in the balance. Her plan for the money she was hoping to save in mortgage interest? Increase her retirement savings by maxing out her IRA.
Eighty-hour weeks. Demanding work. A high chance of failure. The startup world is gruelling. It's no surprise entrepreneurs (particularly founders) are up to 49% more likely to report a mental health condition than other workers.
Swede David Brudö is an example of an entrepreneur who turned this problem into a competitive advantage. An avid snowboarder, he describes startups as the "extreme sport" of the business world. During the early 2000s, he worked for several different startups and struggled with the grueling pace of work.
"Most startups fail, statistically, so the odds aren't the best. That, of course, has a mental toll on you because there's a constant pressure, more or less," he said.
The pressure Brudö felt was exacerbated by depression, a condition he has faced on and off since his teenage years. "I lived in Sweden; I had a roof over my head; I had food on my plate. I had more material stuff than I would ever need. But I wasn’t feeling grateful," he said.
"Instead I was feeling increased amounts of worry, anxiety, stress, much work related. That … took over me as a person." Brudö's wife suggested he see a psychologist to work through these challenges. At first, Brudö felt getting help was a sign of weakness.
"I STARTED TO READ BOOKS ON PERSONAL DEVELOPMENT. FORTUNATELY, HOWEVER, THIS INTERNAL INSIGHT JOURNEY … GOT ME TO UNDERSTAND THAT SEEING A SHRINK ISN'T THAT BAD."
After therapy, Brudö applied an analytical mind cultivated in the business world to addressing mental health. He was surprised to discover mental health conditions are a leading contributor to sick leave and that care mostly addresses the symptoms rather than the root cause.
"Mental health conditions cost more than cancer, cardiovascular disease, and diabetes put together," he said. "I thought I was just someone that wasn't able to cope with the pressure, but I realized I was not unique. So that led me on to thinking, 'Why can't we approach this from another direction?'"
That other direction led Brudö to set up Remente in 2011 with cofounder Niklas Forser. His team decided to create a pre-emptive tool for addressing mental health rather than one that helps people only after they experience burnout, stress and depression.
Today, Remente helps people set goals and improve areas of their personal life. These include: sleeping better, finding more friends at work, reading more books or cultivating a skill. It also helps people with problems like depression and attention-deficit hyperactivity disorder (ADHD). The company provided these services via a web app before launching a mobile version. It claims up to 2,000 new users a day and has surpassed 1.3 million users.
"Phones [and] the digital devices we use today … make us more depressed and stressed. What if we could use these devices to help us instead of the other way around?" Brudö asked.
His team was recently invited to speak at the American Psychiatric Association 2019 Annual Meeting in San Francisco as an example of mental health innovation. He couldn't have imagined this happening years ago.
"We feel it's really super cool, because when we started out, people said, 'You can't do this with an app. It's not possible.'" Today, the reality is quite different. "The whole process of the app is helping users understand where they are right now and where they want to be and help them get there."
"The whole process of the app is helping users understand where they are right now and where they want to be and help them get there."
Since founding Remente, Brudö and his wife have had two children. Today, he balances the demands of running a startup with a structured home life and snowboarding.
Brudö said about work-life balance:
Once you get into that process, things become so much simpler and … will relieve you from stress. Because you're in control, you're in the driver seat of your life.
Americans need a credit check.
A survey of more than 1,000 adults released this month from U.S. News and World Report reveals that Americans are extremely unaware of their credit card situation. Indeed, when asked “do you have credit card debt?” fully 21% answered “I don’t know,” the survey reveals.
How can this be? “Unfortunately, the reality is they are often choosing not to know … in most cases it is denial,” explains certified financial planner Bobbi Rebell, host of the Financial Grownup podcast and co-host of the Money with Friends. “A person who in their gut knows something they eat is high in calories will choose to not look at the number — because if they do they might not get the treat. In our gut we all [who have credit card debt] have at least a sense that we spent more money than we paid back.”
Certified financial planner Kimberly Foss, founder of Empyrion Wealth Management, notes that the “this isn’t that surprising, given the ease with which credit cards can be acquired online.” And Rebell adds that a lack of personal finance education may also play a role. Only five states currently require high-school students to take a personal-finance class, as MarketWatch explored this year.
Whatever the reasons, this comes as credit card debt hits new records: Indeed, by the end of 2018, U.S. credit card debt had hit $870 billion — the highest amount ever, according to the Federal Reserve. What’s more, we now have more than 480 million credit cards, which is up by more than 100 million since the recession.
Even people who know they have debt often don’t know what interest rate they’re paying. A CreditCards.com survey of more than 2,000 consumers revealed that nearly half of cardholders who carried a balance were either unsure or unaware of their card’s APR.
This knowledge gap is fixable, experts say. “The way to fix this issue is to dive headfirst into your finances. Get online and look at the account details for your credit cards,” says Beverly Harzog, credit card expert at U.S. News and World Report.
Should you discover you do have debt, create a plan for paying it off: One simple rule, slash your lifestyle expenses to free up money and then pay as much as you can on the highest interest card each month, the minimums on all others, and do this until all your debt is repaid. Harzog adds that you may also want to consider a balance transfer.
Many people are in the dark about what makes their credit scores rise and fall.
That’s the takeaway from a new survey by the Consumer Federation of America and VantageScore Solutions, which found that consumer knowledge about credit scores is at the lowest level in the past eight years.
“Consumers know less about credit scores but think they know more,” said Stephen Brobeck, a senior fellow at the Consumer Federation of America.
The standard advice for a healthy credit score is to avoid paying your bills late or letting your balances get too high. Yet other moves — some seemingly positive — can actually lower your score, experts say.
Paying off an old debt
It seems like you’re doing something good: An old, unpaid bill resurfaces and you make a partial payment on it.
However, sometimes these debts are already so old they’re not legally enforceable, said Katherine Lucas McKay, who focuses on consumer debt at the Aspen Institute.
Once the debt collector makes a record of your active payments, it’s legal in many states for the debt to be treated as new, Lucas McKay said.
Often the easiest thing to do, she said, is to pay off the balance completely. “Your score will start to rise again once that record is closed,” she said.
Sticking with one type of credit
If you believe the collection agency is acting inappropriately, file a public complaint through the Bureau of Consumer Financial Protection. For the debt collectors, she said, it’s often easier to just resolve the issue “rather than have their regulator look into the situation.”
Ten percent of your score is about the variety of your debt, said Matt Schulz, credit expert at CompareCards.com.
“If you’ve had a car loan, a personal loan, a credit card and a mortgage and handled them all well, you’re probably going to have a higher score than someone who has just had a credit card — all other things being equal,” Schulz said.
That’s because lenders have more data points to pull from to make their decisions.
You shouldn’t go out and get a loan you don’t want or need just to bump your score a bit, he said, but, “it is worth considering in some circumstances.”
Closing a line of credit
After you’ve paid off a credit card, you might close the line of credit.
Keep in mind that doing so will lower your overall credit limit, and therefore may increase your utilization rate — how much credit you’re using versus what’s available to you.
“There is some data from FICO that reveals people with credit scores above 800 commonly maintain a credit ratio below 10 percent,” said Bruce McClary, vice president of communications at the National Foundation of Credit Counseling.
To offset the smaller credit limit, you should have a strategy for paying down the remaining balances as quickly as possible and bringing the utilization ratio back within an acceptable range, McClary said.
Also: Don’t rush to open a bunch of new cards at once. Doing so can lower your score.
Failing to check your credit report
Errors on your credit report can drag down your score, Schulz said. “It’s absolutely essential to review your credit report at least once a year to make sure that it is accurate,” he said.
If you see a potential problem — be it a reporting issue or sign of identity theft or fraud, let the credit reporting company know as soon as possible. “The resolution process probably won’t be fast or simple,” Schulz warned. “But it’s all worth it.
“You should never let someone else’s mistake damage your finances.”
The three big firms that generate credit reports for consumers are Experian, Equifax and TransUnion. You are allowed one free report from each of the three companies each year, according to the Federal Trade Commission.
You can also freeze your credit with these agencies for free to protect yourself from identity theft and other types of fraud.
I’m originally from Alabama, so a lot of folks I know have been watching intently in recent weeks as legislative bodies took their cues from religious faith in passing a new law on abortion. Some have been floored that a holy mantra could impact laws and the penal code, while others have cheered the developments as a sign of a new spiritual alignment.
You don’t have to relocate to Alabama, Georgia or Ohio to get your investment life in line with your personal faith, however. Believe it or not, there’s a fund for that.
Whether this segment of the Responsible Investment universe, generally referred to as Socially Responsible Investing or SRI, can beat the market is another matter.
Catholic-focused funds: There are a variety of Catholic-values funds available for individual investors. The $250 million Global X S&P 500 Catholic Values ETF CATH, +0.76% tracks the S&P 500 SPX, +0.85% with a faith-based overlay dictated by the Conference of Catholic Bishops, who have determined that Catholics should “never invest in businesses engaged in abortion, contraception, embryonic stem cell research, racial and gender discrimination, pornography, arms production or other morally wrong business activities.”
Likewise, the LKCM Aquinas Catholic Equity Fund AQEIX, +0.93% with a longer track record but only $50 million in assets under management, uses the same definition to exclude certain industries and businesses from its portfolio.
Ave Maria, which offers a variety of mutual funds from growth AVEGX, +1.11% to value AVEMX, +0.75% to bonds AVEFX, +0.18% is likely the largest Catholic fund complex available to investors, with north of $1 billion under management. The firm relies on advice from the funds’ Catholic Advisory Board for investment screening advice, resulting in a “pro-life and pro-family approach to investing.”
Jewish-focused funds: Investors who wish to align with their Jewish faith don’t have the wealth of opportunities of their Catholic brethren. In fact, the one fund offering available, the Six Thirteen Core Equity Fund both launched and closed in 2018. The fund was intended to “invest alongside Jewish Values, promoting the development and growth of the Israeli economy, while recognizing the importance of tzedakah.” The fund was to donate 10% of its profits to charitable causes.
For now, investors who want to focus integrating their Jewish faith into portfolios can do so only through the AMIDEX35 Israel Mutual Fund AMDAX, +0.39% which invests in listed Israeli companies.
Shariah-compliant funds: Funds that are Shariah-compliant will avoid alcohol, tobacco, pork-related products, conventional financial services, weapons and defense as well as entertainment stocks like hotels, casinos, cinema, pornography and music. Investment options include The Imam Fund IMANX, +1.08% and the Amana group of funds focusing on growth AMAGX, +0.99% income AMANX, +0.82% and the developing world AMDWX, +0.64% There are also ETFs listed on the London Stock Exchange, including iShares MSCI World Islamic ETF ISWD, -0.05% and the iShares MSCI USA Islamic ETF ISUS, +0.27%
With the exception of Amana’s funds — its growth and income funds have assets in the $1 to $2 billion range — most Shariah-complaint funds remain fairly small, however. The Imam fund boasts $121.78 million in assets under management, while the iShares products have $115 million and $72 million, respectively.
Bible- and Christian-focused funds: For those that may not affiliate with any of the specific religions above, there are additional faith-based fund options. For example, the Timothy Plan family of funds, which has a variety of funds in broad investment categories including U.S. equity and fixed income, offer investors screens that exclude businesses with ties to abortion, gambling, pornography, tobacco, non-family entertainment, alcohol, and non-traditional marriage. Within this framework, the fund family offers everything from small-cap value TPLNX, +1.32% to growth and income TGIAX, +0.40% to Israel Common Values TPAIX, +0.06%
Likewise, Guidestone, with over $12 billion in assets under management, offers a range of fund options, including real assets GREZX, +0.69% and target-date funds (such as GuideStone My Destination 202 GMWZX, +0.40% and screens for abortion, human trafficking, gambling, tobacco, and alcohol.
Eventide (Gilead Fund ETILX, +2.03% is its largest offering) and Crossmark Steward Funds (with a global equity income fund SGISX, +0.82% and another focused on bonds SEACX, -0.04% ) are additional variations on the theme. Among the ETF options is the Inspire Global Hope Large Cap ETF BLES, +0.92%
Of course, the big question is what does performance look like if God is on supposedly your side?
One of the most common assertions made against Responsible Investments in general and SRI, which utilize negative screening as described above to exclude companies or sectors based on a value or belief system, is that, while it may be good for your conscience, it may not good for your wallet.
The evidence shows that increasingly isn’t the case for indexes and funds focused on Environmental, Social and Governance (ESG) issues, which generally do not eliminate potential investments wholesale. Instead ESG funds look for “best of breed” companies across sectors where strong ESG characteristics could enhance a firm’s sustainability or profitability.
Performance for faith-based funds, however, has been mixed. For example, the LKCM Aquinas Catholic Equity Fund AQEIX, +0.93% has underperformed its benchmark index and 90% of its peers, and Global X S&P 500 Catholic Values ETF CATH, +0.76% has underperformed its index since inception. Ave Maria’s growth and bond funds have consistently outperformed the S&P 500, while the value, world equity and rising dividend funds have underperformed since inception and produced mixed results in intervening years.
In 2019, Guidestone won Lipper’s award for Best Overall Small Fund Family based on risk adjusted returns, while the Inspire Global Large Cap ETF has underperformed the MSCI ACWI Large Cap Index since inception.
One relatively recent academic study on the performance of religious-themed investment funds found “that faith-based funds do not systematically underperform similar secular SRI or conventional funds. Faith-based funds tend to be small and share with similarly-sized conventional funds the challenge of attaining sufficient size to fully exploit economies of scale in investing.”
It’s certainly true that many of these funds are relatively new to the market, and it remains to be seen what long-term performance might look like. In fact, the study on faith-based fund performance was based on only 24 funds with less than 10-year histories.
Equally, restricting investment in and access to birth control, for example, may have macroeconomic repercussions that impact more than just a single fund. The World Economic Forum has estimated that “[f]or every dollar invested in reproductive health services, $2.20 is saved in pregnancy-related health-care costs. Moreover, the longer a woman waits to have children, the longer she can participate in the paid labor force, thereby boosting the economic health and prosperity of poor communities.”
But for those investors who do want Jesus (or the religious figure of their choice) to take the wheel of their investment portfolio, they generally won’t be short of options.
When it's several decades away, you might categorize saving for retirement as a back-burner concern.
And when you're younger, contributing to an individual retirement account might seem like an impossible stretch. Yet people who made the leap generally say they're sorry they didn't start earlier.
Millennials seem particularly drawn to Roth IRAs, which are showing an across-the-board uptick from all age groups.
Drawing on investor data, Fidelity found more than half of IRA contributions going into Roth IRAs, and especially from people age 23 to 38. "Millennials opened 41 percent of new Roth IRA accounts in 2018, and 74 percent of their contribution dollars are going into Roths," said Maura Cassidy, vice president of retirement at Fidelity.
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Ashley Sproul, 40, started her Roth IRA when she was 34 and wishes she'd started sooner. "My dad said to start right away, but I didn't get the importance of tax-free growth."
Sarah Lindsay Miller, 29, maxes out her Roth IRA every year. "I would have funded mine in high school and college if I had known about it," said Miller, an office manager in Estes Park, Colorado.
The accounts are especially valuable when they are the sole source of retirement savings. Miller's employer does not provide a 401(k). However, she put in the maximum savings possible even when she was contributing to a workplace retirement plan with a former job.
Roth IRA advantages
For younger people, 30 or 40 years seems like a very long time to not be able to touch the money. Since Roth contributions are made with after-tax dollars, that's not a concern.
"The benefits of the Roth are that you can tap into the contributions you've made tax-free and penalty-free," Cassidy said. "People are finally really understanding that."
You have to forgo the tempting, immediately available tax break, but you get something better in return, says Mike Hoffman, a director at Verdence Capital Advisors in Maryland: "The contributions and, most importantly, the 30-plus years of earnings, will be tax-free in retirement," Hoffman said.
"This is the year that millennials are estimated to be a larger population than boomers," Fidelity's Cassidy said. "The older millennials are in their 30s, stable in their careers, saving for multiple goals.
"It's great to see them saving for their future," she added.
For her part, Roth owner Sproul said that, although she loves "that it grows tax-free," she's less enthusiastic about the annual contribution limit.
Since the IRS has raised IRA contribution limits, you can contribute $6,000 annually. If you are over age 50 and making catch-up contributions, you can put in an additional $1,000, for a total of $7,000 per year.
"Those are great little bump-ups to take advantage of additional savings," Cassidy said.
You can also earn more and still contribute to a Roth IRA – the income cut-off is $137,000 for single filers, up from $135,000 for single filers in 2018.
If you're still deciding which type of IRA to go with, Hoffman says the traditional IRA is a form of instant gratification because of the upfront tax refund.
"But if you're truly thinking long-term, and what will be better for you and your family many years from now, then you would pick the Roth IRA in most cases," Hoffman said.
Source: Yahoo Finance
Three years ago, I hit financial rock bottom.
Rent was due and, once again, I didn’t have it. I did, however, have three maxed-out credit cards, a negative account balance, and a closet full of useless junk I’d bought during a 2 a.m. online shopping binge a few weeks prior.
I wasn’t financially illiterate. I knew how credit scores can be damaged and interest charges accumulate over time thanks to my mom, a single parent who taught me to prioritize financial independence and frequently references the teachings of financial expert and lesbian style icon Suze Orman.
I fully understood what I was supposed to be doing with my money, and that I didn’t have much of it. As a freelance writer, I don’t make the kind of money to support a fun, quirky shopping addiction a la ”Confessions Of A Shopaholic.” I wasn’t trying to live out a broke-but-fabulous Carrie Bradshaw fantasy, and I was way past the point in my 20s when being broke stops being cute.
My credit tanked as I kept racking up online shopping debt I knew I couldn’t pay off, and I couldn’t stop. I also couldn’t sleep, but I didn’t need to. Sitting in front of my computer all night impulse-buying clothes, shoes, gimmicky skincare products, or a high-end espresso machine gave me an undeniable rush. It didn’t matter what I bought, only that I wanted this stuff because this stuff would make me feel better, and somehow the details of how I would pay for it would all work themselves out.
I felt unstoppable, untouchable, until the rush died down, and I’d crawl into bed for the next five days terrified by the depth of the financial hole I’d dug myself into—an exhausting cycle that started in my early 20s and seemed like it would never end until I ruined myself financially.
Around this time, I started seeing a therapist to help me cope with the constant anxiety of my mounting money problems. I told her about my ongoing financial problems, and the euphoria I sometimes felt that seemed to come in waves before an eventual crash into severe depression that lasted for weeks until the cycle began again. But most of the time I could barely get out of bed.
After a few sessions, she referred me to a psychiatrist who explained that drastic and unpredictable mood shifts like mine—periods of high energy, hyperactivity, and loss of touch followed by depressive episodes—are typically associated with bipolar disorder.
Not only that, but the feelings of impulsivity, restlessness and delusion that often accompany these manic periods can lead some people with bipolar toward risk-taking behaviors like self-harm, unsafe sex, and in some instances, shopping binges and spending sprees. I learned that most people who live with bipolar manage their symptoms through a combination of medication and talk therapy, and fortunately, I was able to start a course of treatment.
Though classic symptoms of a bipolar disorder can include what some people might describe simply as “highs” and “lows,” or what pop culture portrays as a “split personality,” getting a diagnosis and learning to live with these symptoms is much more complex.
Compulsive shopping isn’t typically discussed in relation to bipolar, and “financial destruction” doesn’t typically show up on the lists of common symptoms. However, chronic overspending is fairly common among people living with bipolar disorder, and it can be just as destructive to long-term health and wellbeing as any other behavioral symptom left untreated.
Before I was formally diagnosed, I never suspected I could be experiencing symptoms of bipolar disorder. Instead, I told myself I was just bad with money, bad at relationships, terrible at my job, and that my fluctuating moods were just bad PMS (that somehow lasted for months on end.) I believed recklessness and impulsivity were just part of my personality, rather than a symptom of a common and highly treatable mental illness.
I do occasionally behave in ways that could be described as reckless, impulsive, and financially irresponsible that have nothing to do with having bipolar, but before I sought treatment, these impulses were much more difficult to control.
Bipolar disorder can complicate work, relationships and other aspects of everyday life in a variety of ways, but the financial consequences can be some of the most devastating and most stigmatized.
Living with mental illness of any kind is shockingly expensive. The cost of therapy, medications and missed work days can add up, fueling the cycle of depression and instability. The double stigma of struggling with both mental illness and financial instability can feel embarrassing or shameful.
I not only live with a bipolar disorder, which itself is highly stigmatized and stereotyped, I’ve also made some remarkably irresponsible financial decisions that had substantial, long-lasting consequences. Credit and debt can take years to rebuild and pay off, not to mention how long it can take to set aside money for a savings account.
After experimenting with a few different combinations of medication with the help of my psychiatrist, my symptoms are generally under control. I still see my therapist for regular visits to help me cope and stay focused on my progress, financial or otherwise. I still feel the urge to spend when I’m anxious, stressed, or even feeling exceptionally good, but now those compulsions feel more like background noise I can easily tune out. I also deleted the shopping apps from my phone and unsaved my credit card information from the websites I visited regularly, so I’ll be less tempted the next time I hit a rough patch.
I’m steadily making progress toward improving my credit score, paying bills on time, spending far less and adding to my savings. The impact of my mental illness on my financial health security will likely follow me into future financial decisions and possibly my personal relationships, but I’m not ashamed to admit that I’ve struggled with mental illness, or that living with bipolar disorder complicates my financial present and future.
Money talk can be embarrassing, but it also sheds light on the complexities of bipolar beyond a surface-level understanding of “highs” and “lows.” Radical transparency is critical to eliminating shame and stigma surrounding both mental illness and financial instability.
I am one of 582 million people, almost 8% of the global population, who have devoted their lives to entrepreneurship. This means that for the past decade I have been in the process of either starting or running my own business. But what are the implications of this identity as an entrepreneur on my psychological well-being - and the well-being of the global community?
An entrepreneur has been described as someone who passionately and creatively pursues an idea from concept to actualization as a result of a discovered need or challenge in the market. Or in the words of the iconic Steve Jobs: "The people who are crazy enough to think they can change the world are the ones who do."
Thought leaders around the world, including those who gathered in Davos earlier this year, recognize the extraordinary value that entrepreneurship adds to job creation, economic growth and the commercialisation of innovation. The largest global data set on entrepreneurship from the World Bank shows a statistically highly significant and positive effect of start-ups on GDP per capita, exports per GDP, patents per population and job creation.
In the US alone, start-ups create approximately 43% of new jobs annually based on data released by the Census Bureau’s Business Dynamic Statistics (BDS). The Small Business Administration has calculated that from 2000 to 2017, small businesses created 8.4 million net new jobs as opposed to 4.4 million jobs created by large corporations. In 2015 there was a total of 30.2 million small businesses, representing 99.9% of all firms.
But while the data sets have historically focused on the macro wellbeing of local and global economies, they have failed to measure the pernicious impact that mental health disorders have on the micro well-being of founders. Fortunately, the focus of the value analysis has begun to change.
The mental health crisis in start-ups
According to Dr Paul Hokemeyer, an expert in elite identity constructs: “Given the extraordinary impact entrepreneurs have on our world economy, it’s critically important they operate in a state of optimum emotional and relational health. Unfortunately, in our current zeitgeist of founder burnout as a benchmark of entrepreneurial excellence, such has not been the case.”
A recent study by the University of San Francisco researcher Michael A. Freeman focused on the mental health crisis that is raging, acknowledged but ineffectively addressed, among the men and women who comprise the entrepreneurial community.
According to this study, approximately one half (49%) of entrepreneurs suffer from at least one form of mental health condition during their lifetimes. These include ADHD, bipolar disorder and a host of addictive disorders.
Freeman’s research has shown that start-up founders are:
- Twice as likely to suffer from depression
- Six times more likely to suffer from ADHD
- Three times more likely to suffer from substance abuse
- 10 times more likely to suffer from bipolar disorder
- Twice as likely to have a psychiatric hospitalization
- Twice as likely to have suicidal thoughts
These findings are actually conservative in the clinical experience of Dr Hokemeyer: “In my clinical practice, I see percentages in the range of 80% of entrepreneurs who struggle with a host of personality disorders such as narcissism, sudden wealth syndrome and the impostor syndrome.
“These conditions erode not just the effectiveness of start-up founders; they also have a negative impact on the endeavours that these highly intelligent human beings have risked their financial, relational, intellectual and emotional capital to pursue.”
When asked to explain why he thought that is, Dr Hokemeyer explained: “Entrepreneurs are trained to ignore the qualitative needs of their well-being measured in meaningful and authentic relationships, overall life satisfaction and happiness. The message they have internalised from the field’s most celebrated entrepreneurs is the outdated prescription of 'no pain, no gain' and a pernicious message that success is purely measured in quantitative returns, return on investment and profit.
“For these highly intelligent individuals, quantitative returns trump qualitative considerations. Unfortunately, in this paradigm entrepreneurs crumble, struggling to calibrate the dissonance between their internal awareness that their physical and emotional distress compromises their performance with the industry standard of cutthroat competitiveness that has defined the field for centuries.”
Fortunately, there is a solution. At this year’s World Economic Forum meeting in Davos, thought leaders and luminaries such as the UK's Prince William, the CEO of Kaiser Permanente Bernard Tyson, and John Flint, CEO of HSBC, among others, have begun discussing mental health issues in a curative and non-stigmatising light. But while awareness is important, concrete steps are critical to minimising the mental health risks while maximising the social and cultural benefits of entrepreneurial endeavors.
Our action plan
To build on the momentum of Davos, Dr Hokemeyer and I have come up with tangible steps to mitigate the damage caused by founder burnout and other mental health challenges.
1. Destigmatisation: Investors need to lead by example, by showing founders that it’s OK to be vulnerable and open up about their mental health challenges. The process of openly communicating and showing support for founders can start as early as in the due diligence process of start-ups. A great way for investors to support this initiative is to take the Investors Pledge developed by Erin Frey and Ti Zhao. It is a public commitment to take an active role in mental health.
2. Wellbeing resources: The global investment community must change their mindset by expanding their horizon beyond financial and other key performance indicators by also taking into account the mental and physical wellbeing of their most important asset, the founders. Just because a start-up has raised $2 million or more doesn’t mean that the founders have the means to seek support and help. It is the investor’s responsibility to allow founders to spend a fraction of the investment on their personal wellbeing.
3. Investor support: Investment funds need to include mental health professionals in their organizational ecosystem to serve as support systems and to implement empirically proven, enhancing and curative strategies for the leadership of the human beings who are stewarding their investments.
Given the volatile state of the geopolitical climate within which entrepreneurs are striving to create social and economic value, it is critically important that their valuations of success include qualitative measures of mental health in addition to quantitative measures of financial return on investment. To do this we need to work as a global community to incorporate established tools such as the WHOQOL to measure the psychological and relational health of individuals and communities.
The stage was set for this expansion in Davos. We now need to populate this stage with activists who will expand the traditional boundaries of valuations from the purely quantitative to a mixture of quantitative and qualitative returns.
Source: World Economic Forum
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