A reminder at Christmas Time

I am having an interesting night tonight. As happens every year, I am given an awkward reminder of another time, with a Brisbane landmark that brings joy to many.

The King George Square Christmas Tree



Here is the Christmas Tree from King George Square that is erected every year, oddly enough, at Christmas. It seems happy enough. Decorating it is a 'thing' and it is unveiled every year at an event, and carols are sung.

 

I don't consider myself a Scrooge at Christmas, and so what you may ask am I reminded of?

 

Well, my wife sent me this photo today. A colleague of hers took it, and she told me when she sent me the photo via text that her friend had taken it, and that she had told him about Russell. (Names changed and all that).

 

Going back a few years, he was the guy who put the tree up every year. He was a client of mine, and an interesting one at that. He inherited some money, but really took it, and made the most of it. He used it to really 'do' something. But then he died.

 

He rang me one day to check that he had trauma insurance cover. After some back and forth over a bad phone line, I confirmed that he did, and reminded him of how difficult it had been to convince him to take it. He said that he was glad that he had listened, because he had been diagnosed with a tumour the size of a grape fruit, that totally surrounded his kidneys, and had a major artery engulfed in it as well.

 

Two oncologists and a vascular surgeon had agreed that there was no point in operating, and chemotherapy was little value. He was given 6 months to live, and he proved them wrong, but only just.

 

As an adviser, I have had a number of clients who have been sick, and even died, but for some reason, this client and his circumstances give me what I feel is an irrational emotional response. He was not a friend or family member, although we spoke about personal information, and laughed at things a fair bit.

 

It may be because it was so sudden. It may be because he was too young - mid 40's. It may be because he had changed his life with the inheritance, and his future, and those of his staff was bright. It is probably all of those things, plus me being a bit sentimental.

 

Anyway, as much as I like Christmas, that tree is a sorry reminder.

If you don't like the gun culture so much, why do you invest in it?

There has been enough discussion of recent events surrounding guns and weapons in other countries, that I am sure that I don't need to go into it here. Suffice to say that 'gun control' (or the lack thereof), continues to be an issue.

It now appears more likely than not, that in America at least, there will be no change to their gun laws, at least in the short term.

While the stats in the attached article are a few months old, they highlight the ease with which guns are available in America, and the way that they have been 'normalised' in society.

But in Australia, we have tighter gun laws. Phew. We don't own nearly as many guns per capita as other countries. But, whether you know it or not, you own the companies that make them.

A very quick skim through this Guardian article shows the largest manufacturers of arms in the world. There are many companies that have names that makes it impossible to know what they do (no doubt a coincidence), but there is one or two names in the top 20 that people will have heard of. General Electric, or GE is one of them. Now, GE is not the worlds biggest maker of arms (this report says 18th). And they don't even have a large percentage of their business revenue being generated by arms sales (a measly 3% of revenue according to this report). But, on the other hand, in 2010, they sold $4.3B US in arms. Further, fund managers are pretty tight with their share holdings, so I would imagine it is fair to say, without looking beyond the first page of the first fund manager I looked up, that this is not the only investment in weapons that js been made on behalf of Australian superannuation investors.

What's that got to do with you. A quick scan of one super provider QSuper shows that GE makes up a part of their international share portfolio. So investors utilising the services of Qsuper (public servants at the least, and many others in Queensland), own a part of the company.   For some, this would not be a problem, but for others, it may well be.

And that is where the concept of responsible investing plays a part in the financial planning process for individuals. You may have the ability to screen out the companies and sectors from your portfolio that operate in areas that you feel uncomfortable with, or even support those companies that produce products or services that you can get behind.

The above example with GE and QSuper is just one small look at the type of companies and products that people may unwittingly own. There is something you can do, and it starts with asking,

"What's my Money up to?"

Feel free to leave a comment and let me know what you think.

Find out more at www.sociallyresponsibleinvestment.com.au

 

Why having values may lead to better investment decisions

On a personal level, my wife and I started thinking about ethical and responsible investment shortly after our first child was born. Being responsible for someone other than ourselves really meant a review of our priorities, and the importance of a 'legacy', for want of a better term.

You got that right

On a professional level, it took a little longer to get started. As I have said in an earlier blog posting, I had a boss who thought that 'ethical investment' was for hippies (his words), and was not something that he wanted discussed again. So I let it 'sit', but still looked for opportunities to introduce it into the practise, if an opportunity arose.

This 'opportunity' really hit home one day when I was speaking to a surgeon who was distressed to find that his investment portfolio continued an exposure to Philip Morris. He said he spent a good portion of his working week operating on oesophagus's (oesophagi?!) and lungs burdened with cancer, and could not and would not make money from a company selling tobacco products.

It was at this point when I realised; this surgeon is no hippy.

Not a hippy
 

Investments play a part in your wealth creation strategy.  Taking your personally held values, and using them to inform your investment decisions can lead to more active ownership and engagement in the process of what it is your trying to achieve.

So you think you have no investments? Almost everyone of working age in Australia has SOME superannuation. If you want to meet your goals, then you'll also need to put SOME money SOME where at SOME time, to help you to achieve this. It is possible to take the things that are important to you, and incorporate them into the investment decisions that you are making.

You can be comfortable that your investment decisions meet your personally held values, and also assist you to meet your financial goals.

Now people, we have analytics. I can see that there are page views. I'd love it, if you could leave a comment or two, to get a discussion happening, or just to hear your thoughts.  

You call that a wealth creation strategy?

I had someone say that to me once. We had spent an hour going through their Statement of Advice, and when we turned to the pages that outlined the recommended investments and their performance, they looked at the 'one year' returns, and said

"You call that a wealth creation strategy?"

Well I did as a matter of fact.

Now this was some years back, in around 2001. Those with a long-ish memory may recall that markets had NOT acted that favourably in preceeding years. However, there are two point that bear noting here. They are:

• short term returns are generally not that relevant in a long term wealth creation strategy, and
• returns are wholly irrelevant, if you haven't got anything to get a return on.

There is a bigger picture at stake that goes beyond what is happening over the short term, and even what is happening with markets in general. That is, step 1 of creating wealth, is to spend less than you earn. Step 2 is to do something smart with the difference.

There is no step 2, without step 1.

You may have a lump sum in super, or access to some equity, but it is the ability to direct free cash flow to the things in your life that are important to you, that will determine the outcomes of your financial strategies. It is that, that will predominately drive your position to the rewards that lie ahead.

 In the end, the strategy that I had recommended for the coupe included cash management, income and asset protection, debt ideas, an estate planning overview, asset allocation decisions and more. And yes, the recommended investment has gone up significntly in the ensuing years. But that is NOT the 'prize', it is merely the icing on the cake.

Outcomes or Behaviour?

Control is a funny thing.

You want to sell your house? You can put it on the market, but you can't make anyone buy it. You want to get to work on time? You can leave early, but you can't control traffic.

What makes you think you can 'be financially independent' just because?

You can't wish yourself to making, building or protecting your intended lifestyle. There is no magic formula.  You can't control the outcome.

(See, I can't even control if someone takes down their video)

There are however, SOME things you can control. Behaviours.

You can't control interest rates, but making home loans payments is something you can manage. Investment market returns are volatile, but you can control how much you invest, and the structure you choose to utilise. You can't really control your health (although there are things that you can do to give yourself the best chance), but you can protect yourself from unforeseen events.

So here is an example of the difference:

Outcome Focus

• I am going to retire comfortably
• I'd like to go on a holiday next year.
• She'll be right

Behaviour Focus:

• I am going to invest $x into super and pay an extra $x off my home loan.
• I am going to put aside funds for a holiday
• I am going to protect myself from unexpected sickness /accident.

So to summarise, behaviours are things you do consistently. They are manageable, and things that you can control. They are things you can do now, and not have to wait for in the distant future.

There is no doubt that these behaviours have an outcome. but that isn't the focus. The 'outcome' is nothing more than a direction. and the behaviours are the little steps, taken often to get you and keep you on the right path.

Thanks Master Oogway.


Comment or connect. We'd love to hear your feedback.

 

Why, why, why, why, why?

Do you have values?

Great!! Have you ever stopped to think about them and why you have them?

Values come from who we think we are.We find out values when we ask questions of ourself like:

• Whats important?
• What's right?; and
• What should I do?

Values aren't things. We can't hold them or spend them, but if you think of yourself in a certain way, how did you feel the last time you acted in a way contrary to those 'values'. The worse you felt, probably correlates to how strongly you hold those values.

So how often do your actions match your values?

The '5 whys' system was initially used by Toyota. It is very simple, and can be very effective. Next time you want to do something, ask yourself why?

Why do I want to do this?

Here is an example from when I founded Viridian.

Why do I want to do this?
I think there is a better way of doing financial planning.

Why?
People deserve to be given advice that has their interests at the centre.

Why?
While planning your finances isn't 'life and death', wrong decsions can have a huge negative impact.

Why is that important?
A few small decisions, like paying off a home loan faster, saving for a rainy day or life insurance could have had a large positive impact on my parents.

Why does this matter regarding setting up a business?
I want people to not make the same mistakes.

So for me, that's why. Everytime I hear that someone has cancer, or has had a heart attack, I feel a littel stab. When people talk about the 'conventional wisdom' of making money that, unfortunately doesn't make sense, my stomach tightens, just a bit. So this is why I founded a financial planning business.

Why not give this a try with something you are doing, (or just as good, if something has gone wrong), but rmember: the only important thing is honesty.

We want to learn more about you. More important we think YOU should know more about you.

The value of advice over product

In financial planning, I find that there are things that people want to talk about, and things that they really need to talk about. 

Over the last few weeks, I have met a few new business owners, and we have spoken extensively about the importance of 'telling it like it is', even when sometimes that isn't what our potential clients want to hear.

Without using names for obvious privacy reasons, I have one recent example that springs to mind.

When I first met Daryl and Maggie (not their real names), they had been referred to me by another professional. We sat down and spoke, and they told me about all the exciting things they wanted to do financially. They had some ideas, and an interesting take on their positions. They also made it clear that they had a bad experience with a financial planner in the past, and that they did not wish to talk about insurance.

When I first started in this industry *profession*, I worked for a practice that specialised in planning, self managed super and insurance broking. I was grateful for the opportunity to get a start in the industry, but after some coaxing from the Managing Director, I told him that I wasn't interested in being a 'foot in the door' life insurance salesman. And more than ever, I still don't.

However, there can be no doubt, that your income is the engine that drives ALL of your other activities.  Without this, you can't repay your debt, contribute to super, or invest in property. You don't go on holidays or buy your kids their first car.

To repeat (and it sounds blatantly obvious), but without ongoing income, you don't get to do all of the fun stuff.

So I told Daryl and Maggie that I was down with the fun stuff, but without putting in place a strategy to protect 100 percent of their income, the fun stuff they wanted to do was built on a weak foundation.

It took quite a few meetings, and 3 months to convince them to agree, and then another 3 months to get their cover approved due to the health difficulties that they both had. Finally, it took a few more weeks to convince them to accept the increases in premiums, and the exclusions, and to re arrange how some of the premiums were to be paid, after the insurer finally agreed on what they would cover.

So it was with a sense of sadness, but also relief, when I received a call from Maggie less than 6 months later when she rang to inform me that Daryl had been diagnosed with lymphoma and that she felt she would have to sell their house. She felt this way because even though she remembered that he had income protection, Daryl was so sick, that she had to take time off work and she didn't think her policy (or his) covered that. I explained that we had arranged for sufficient cover to ensure that there was a lump sum available in the event of certain sickness, and that lymphoma was one of these. Daryl would receive a lump sum, and she could use this to fund her break from work, and income protection would cover Daryl's enforced lay off. They wouldn't have to sell their house.

I was grateful that the insurance provider was thorough but swift in their assessment, and paid the claim quickly (and even went beyond what they probably needed to do).

Money, of course, can not in itself help people to recover from sickness or accident, but financial security can mean that when the unforeseen strikes, money is one less (and large) thing NOT to have to worry about.

Does it cost money? You bet. Are there intrusive questions and maybe blood tests? Unfortunately.
Would you regret not having cover after a heart attack, stroke or cancer (and you would be horrified at the probability of having one of these three illnesses)? Probably.

In finishing, I want to reiterate that financial planning, when done properly, helps people to achieve financial goals,  with primary goals being to create and grow your wealth. But anyone who remembers Maslows needs hierarchy would remember that after food, water, sex and a few other things on the bottom rung of the ladder, security was an early need that required being met. Being able to sleep at night, knowing that you are protected from sickness and accident, is a real level of security.

A lot of people think that sickness is something that happens to older people, or that covering this is too expensive. Daryl was 41 when he was diagnosed with terminal lymphoma, and not obtaining cover would have been the most costly mistake possible.

As ever, I'd love some feedback. Feel free to comment, or share this with people you know.

Find a way or make one

I have been a financial planner now for about 14 years. I have been a business owner and manager for about 6 1/2 years.

I doubt that I ever thought that I would own a business when I started in planning. It really came to a head about 7 years ago, and for a number of reasons.

I was unhappy with the direction that the company I worked for was taking. I felt uncomfortable, to say the least, with the sales at all costs ethic, and what I guess I would consider a product first approach. I felt, and still do, that client needs come (waaay) before the 'product'.

Secondly, I was concerned about the compliance record. I personally did OK, but the practice had...issues. Compliance can be onerous at times, but it is in general for consumer protection, and important.

Finally, I had started to look into ethical and responsible investment. More to the point, it had started to make real sense personally, and from a business sense. Even more to the point, I was beginning to feel uncomfortable about the 'disconnect' between how I felt personally on issues, and what I was doing 'at work'. With regard to that, I don't feel that there is ANYTHING unethical or irresponsible with financial planning or investing per se (fancy, huh). But there can be unethical practices that underline this. Moreso, it is a problem if you (the invetor), aren't aware of the practices, and they are something that in general you wouldn't feel comfortable with (or worse, would actively avoid).

(Oh, OK, so you are aren't an investor? Just about any person under the age of 50 who has had a job has super. And it just might curl your lashes to see where they invest YOUR money).

It came to a head when I mentioned the idea of incorporating thses ideas into the practice. It did not go well. Hippy sh*t may have been mentioned, (as per a Brisbane Times article from a couple of years ago).

So putting the three together, I decided that the practice that I worked at was no longer for me. I couldn't see the point in working elsewhere, thinking that the lack of control would be the same everywhere.

In essence, I felt that the way forward was to go and do something else completely, or go and set out our 'own shingle'. That new business would have to have the clients interests at heart, ensure appropriate client protections were in place, and that we respected, and actively canvassed client values.

A few rushed months of rudimentary business planning later, and Viridian Wealth Management Pty Ltd was born.

Feel free to comment. I would love to hear what you think.

The Future of Financial Advice

Amongst talk of carbon taxes and MRRT's, there is some legislative discussion going on at the mmoment in Canberra looking at the future of financial advice (FoFA). In short, the bill is designed to improve acccess to financial advice. It covers quite a few areas including commissions on investment products, and opting - in to ongoing fees among other areas.

The FPA, while broadly supporting the initiatives, wants to delay implementation (which now seems to be happening), and has some concerns with some other areas. THE CEO of the FPA,  has been quoted today saying it was important that the legislation achieved the following benefits:

Consumer benefits

- To help consumers know how to find a financial planner who is appropriately qualified, educated and works to high professional standards, and clearly separate these professionals from others who give advice
 - To help consumers to easily understand what advice they’re getting, who they’re getting it from, how much they pay and how they will pay

Profession benefits

 - To make sure the professional standards of financial planners are increased over the coming years
 - To make sure that all who give advice put their clients’ interests first

I couldn't agree more.

In the midst of this talk for reform, maybe now is the time to talk about some other industry standards. It is my belief, and soon I will out it to a test, that the majority, no the vast majority, have no idea what happens to their money once it is put in the bank, sent to their super funds, or invested.

Having an ethical policy, or CSR page is good, but what is important in tranparency. Under the guise of commercial in confidence, there are a number of fund managers that will not reveal where they invest their funds. Errr, your funds.

How do you feel about mining? How about uranium mining? What about tobacco, or labour standards, or the use of child labourers by foreign multinationals? Regardless of what your personally held values might be, you should be able to invest in line with, free from the myth that your returns will be negatively effected by your decisions.

The vast majority of people fail to meet their retirement goals without advice. Clearly, returns are important, particularly in light of events over the last few years. However, even keeping this in mind, peoples priorities are changing. People are recycling, composting, growing their own vegies, and keeping some chooks in the back yard. On top of that, people are starting to become aware that there are industries that they don't want to support, and some that they do.

It is one of our guiding principles that we take peoples values into consideration. It would be nice to think that this might be the norm in the future, rather than the exception.

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Happy New Eco-year!!

Happy New Year everyone.

This year, we really saw in the New Year in style.

For us, the holiday period is really about spending time with family and friends, and we got the opportunity to spend 3 days at the eco retreat that is owned by some friends of ours. What's more, we got to enjoy their company, and that of another family of lovely people.

The retreat is only a 2 hour drive from Brisbane, and available for letting. There are mountains, walking tracks, swimming holes, clean air and fantastic views of the surrounds, and, on a clear night, the stars and planets.

The house (above) is situated on land overlooking a gorge. It has solar power, a composting toilet, and a great story on how it got to be where it is now.

Relaxing in the falls, and exploring the area was a great way to start the year and focus on the things that were really important.

In planning your finances, I believe that there are some basic fundamentals that don't change whether we are in the midst of a boom, or when times aren't so good. They are:

1. Spend less than you earn, and do something smart with the difference;
2. Use debt, but use it wisely, and to a level that is comfortable (and even conservative);
3. Ensure you are protected against the things that you can't control.

Being able to spend some time away from distractions with the people most important to me allows me to remember the reasons why I am doing what I am doing with our business, and ensures we keep our eyes on those fundamentals for our family, and for our clients.

Finding the balance between working and lifestyle can be tough, but a few days spent with family and friends in the fresh air has helped us to remember why we are doing all of this, and what is important to us.

Steve

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Viridian Wealth Management Pty Ltd: She'll be right - Part 1

Viridian Wealth Management Pty Ltd: She'll be right - Part 1: "Every quarter, the Association of Superannuation Funds Australia (ASFA) update their Westpac ASFA Retirement Standard . The standard benchma..."

But What Happens Next?

The rallies today in the major capitals calling for climate action were certainly encouraging. But what happens next?

As I have said in previous postings, marching in the streets and starting social media campaigns are certainly highly visible activities. But how much real change will they effect, and what else can be done.

The adshel situation showed that 'people power' could make an impact. However, within a day of returning the ads, they were being defaced in homophobic attacks. So, the ads were back, but maybe attitudes were not altered that much at all.

That is why we assist people to review where there investments are, particularly their super, and help them invest in line with their personally held values. By supporting companies financially that you support morally, they are financially encouraged to broaden the work they are doing. Avoiding and withdrawing from companies that you do  not support sends a real message that can affect companies at the share price.

Finally, you can go even further and and show your activism positions at the shareholders meetings, and put forward your point of view to the people who make decisions.

This financial 'activism' is not nearly as visible as taking to the streets. However, it may be more long lasting, and effective in getting the message across to the decision makers, in a language that they understand.


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What else gets you riled up?

The last few days have seen some really powerful examples of, for want of a better term, people power. There have been some really evocative issues and people have put themselves out there to stand up for things they believe in.

First, there was 'slutwalk'. Then live exports of cattle became an issue. Then over the last day or so, there has been the adshel controversy. While there has been some debate as to the language used, and redeemability of the word slut, what can't be debated, is that these issues have struck a chord, and that people have chosen to act.

These three highlighted issues are important. Regardless of the wording, there is no excuse for rape, and no excuse to blame a victim for being raped. The treatment of the animals in the overseas abattoirs was appalling to watch. Finally, in 2011, are people still scared of seeing two men hug?

But thinking of the positive messages makes me question other things. I don't wish to take away from these issues, but it gets me to thinking about what else riles people up?

I noted the other day that the Australian Government (with your money) invests in companies that manufacture nuclear weapons for Indian submarines via the Future Fund. Is that enough to get you riled up? Or how about your super fund investing (again, with your money) in companies that make weapons, use child labour or damage the environment?  Is any of that enough to get you riled up?

Most people I know would not support weapons manufacture, child labour or degradation to the environment. Except, that they do passively via their superannuation investment. Most people I know would not eat chocolate produced by slave labour in West Africa , yet they own the companies that produce it.

Moreso, the Greens are now getting 10% and upwards in votes at elections, yet only 2.5% of money invested in Australia is done via ethical and responsible investment. Why the gap?

If these things rile you up, then by all means march in the street. Send an email to your MP. But don't support  these things passively. It is possible to support want you want to support, and avoid what you don't like without it affecting your end returns. You can continue your activism by withdrawing financial support for companies that conduct themselves in ways you don't agree with.

To try and find out a little more, I will be asking this over on the Facebook page tomorrow. I would really love your feedback, so please, comment below, or head over to the Facebook page.

PS. News has come through that one of the bus shelter ads has been defaced. Really?


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Food from the Yard

Our dog Violet likes to raid the bin and take food out into the yard, but this is different.

My wife has been working hard recently on edible gardens, and being able to produce food from the back yard. There is a fair bit more to go, and we are only at a early stage, but I thought I would give a brief update.

We have some raised garden beds, some barrels that we have planted potatoes in, some seedlings that have been propagated, and a 'Sweet Temptation' chilli plant, that has two chillis ready to eat.

As we do more, we will post some more details. To see more photos, click here.


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Australia Invests in Nuclear Weapons

The Future Fund, was set up by the Australian Government from the sale of their remaining stake in  Telstra in 2006, The Fund was intended to help the government pay it's future superannuation obligations. Recently released records (obtained under FOI laws) show that the Fund has invested over $130 million in companies that design, produce and maintain nuclear weapons. This includes investment in companies that are building nuclear armed submarines for India, a non signatory to the Nuclear Non Proliferation Treaty.

The good news is that recently the Future Fund sold out of their holdings of companies manufacturing cluster bombs.

The Future Fund was set up using the proceeds from the sale of the Governement's holding of Telstra. It is our money. So where else is 'our money' (read YOUR money) invested. A two minute search shows that investors in one of the largest and most well known super funds in Queensland invests in uranium mining. The same fund has investments in Exxon Mobil and BP.

As ever, if you are comfortable with these types of investments, then it is business as usual. However, if you are not, and do not wish to support them, or wish to actively activate against them, you can.

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Everything old is new again!!!

A key aspect of sustainability, and a catch cry is 'Reduce, Reuse, Recycle'. Recently, we have done just that, and I wanted to share the experience, and some of the reasons why.

We have a very old dining table sitting under our house (and every other house we have lived in for the last 20 years), that I estimate to be at least 100 years old. It is made of Silky Oak, a Grevillea that is extremely useful for windows and furniture, because it is resistant to rotting.

A few months ago, we decided to gift our existing table to some good friends, and rather than buy another one, agreed that as a family, we could restore the old one. We felt that this was an ideal way to show our daughter that we could take something that we did not use anymore, and turn it into something useful, if not beautiful.

One of the primary reasons that it was important, is that even though Silky Oak is relatively drought resistant and fast growing, the harvesting of Silky Oak is severely resticted due to the depletion of stocks. In effect, it is endangered, and we felt it was important to utilise it, rather than let it go to waste.

Over the coming weeks we did a lot of research. We read the Green Magazine, as well as The Green Pages to find products that we felt comfortable with using. Finally, we chose an oil and a varnish from Bio Products. Because we have kids that would eat off the table, we wanted non toxic paints, and those that would limit the release of V.O.C.'s. For us, the Bio Product range available from Hand Made Naturals in Highgate Hill, Brisbane, fit the bill.

Over the next few weeks, we sanded the table, oiled it, and varnished it, just in time for Mothers day lunch.

In the end, we have a beautiful functional tale, but more than that, we have re-used a depleted resource, and restored it in a way that we feel comfortable with. All the while, we have helped our daughter to see the benefits of reusing, rather that just dumping.

To look at a few more photos, look here. It could use another coat or two, and maybe a light sand. However, responsibility and sustainability for our family are more than just the big issues like climate change, and resource depletion. For us it is a series of little issues every day, so while we are happy with the results, we are even happier with the process.

Nuclear Power. When Chinese Proverbs go bad!!!

I must say that I am partial to a good Chinese Proverb. But recent events have led me to be believe that they are, in fact, fallible.

The Proverb in mind is "The rose has thorns only for those who would gather it".

To me this would mean that if you left it alone, you don't get pricked. However, I think the photo above shows a rose that has thorns for everyone, whether we 'pick' it, or not.

I have the utmost sympathy for the people of Japan right now. Sincerely. And I would not want to be seen as being insensitive, but within days of the tragic events, we had people repeating that if we want to reduce our carbon emissions in Australia, the only reasonable option is nuclear power, and that to not use it, is in fact hypocritical.

Earlier today, a major Australian newspaper reported that fallout had reached Europe, and particularly Russia. How's that for irony. Further, radiation has been detected in food in Japan, and certain items have been banned from being imported into the USA. That is a lot of people being stuck by thorns they did not grasp.

I am concerned by the prospect of nuclear power being introduced into Australia. I don't believe that it is safe. It produces less carbon outputs than burning coal, but at what potential cost. I want to advocate against nuclear power, and support other renewables, and I choose to help others to do the same. You can march in the streets, write a letter to your member of parliament, or even invest your superannuation so that you don't support something that you don't want to.

As a final point, before starting this entry I quickly searched the Internet, under Japanese Nuclear Disaster. I read a paragraph or two on one of the articles about how the disaster has been classified as the worst since Chernobyl. Two people have died. It was then that I realised that there had been no mention of the earthquake, and I read the date of the article and saw that it was from 1999, and the disaster wasn't Fukushima, but Tokaimura, in 1999. The cause of that disaster was classified by the IAEA as human error and serious breach of safety protocol.

I don't want to grasp the 'rose' of nuclear power, and I don't want to be stung sitting idly by either.

Carbon Tax - What it really means

Last night, I spent an hour driving back from a clients house, listening to the radio. There was a talk back show, and the discussion was about the Carbon Tax. At, least, it was in a roundabout sort of way.

The question posed was, because Prime Minister Gillard lied before the election about the introduction of a carbon tax, can we trust her now. The response, was, in my humble opinion, astonishing.

What became clear to me was that everyone ringing had little or no idea about the concept of a carbon tax. Whether you agree with a carbon tax as a solution to climate change, or in fact, whether you even believe in human induced climate change, it would be nice if people had an understanding of the issue. I am not so concerned with the 'lying' of our PM (not the first political porkie, and not likely to be the last), but that:
1). Our politicians do not go to sufficient lengths to properly explain the issues in front of the, and conversely, us, and
2). Voters, in general, seem to make very little effort to understand what is happening.

I don't know whether this is because most people are so tied to voting along party lines that they are prepared to accept what is said by their 'leader' or not, but, again, I would love to see people care enough to find out what is happening.

So, I am no economist (phew), but here goes. A Carbon Tax (in brief).

The theory is, that pollution is an economic 'external cost'. That is, a product which causes pollution produces a cost to society that is not factored into the price. As a result, it is overproduced, because the producer of the product does not have to take into consideration this cost when producing the good.

A carbon tax, then, allows a regulator to impose this cost on the producer who causes the pollution, increasing their costs, and also increasing or improving the competitiveness of non carbon technologies.

When people say that is will increase the cost of electricity, the answer is, Yes, it is designed to, providing of course that the electricity is produced through the burning of coal. A caller on the radio last night complained that the Alumina smelter at Gladstone would be negatively affected by the Carbon Tax, because they are powered by a coal burning generator, whereas the Tasmanian smelters are powered by hydro-electricity. Rather than being a negative, this is specifically what it is supposed to do.

More to the point, in my mind, this is simple supply and demand economics. A market based solution to a problem within a competitive market. Ironic then that it is being pushed by the so called 'socialists' on the left, and shouted down by the supposed free market supporters on the right.

Giving the Government a helping hand

Governments of the world continue to grapple with action and solutions for addressing climate change and the environment. Whatever solutions they finally agree on will have an impact on the profitability of companies all over the world. Those companies that are helping to reduce carbon will receive benefits, both financial (competitive advantage, efficiency gains), and social (reputational benefits and employee loyalty).

Responsible investment gives you the chance to do what governments of the world have not or will not. RI is a way to ensure that your money is directed towards those companies that are making a positive impact on the environment, and away from those companies that cause harm. You can directly encourage good corporate behaviour by directing your investments and super into companies whose practices you support.

The most common reasons why people become responsible investors are:

• To generate positive returns while making a difference.
• To direct their money to companies making a positive difference while avoiding those that cause harm
• To influence corporate behaviours, and push for greater accountability on issues like sustainability and governance.
• To take their activism to another level.

There are RI solutions for every risk profile, time frame and stage of life. You can make a difference and help to contribute to causes and issues that you believe in. Or you can wait for the Governments of the world to act. We are having enough problems with even deciding on one.

Demand for Responsible Investment is increasing

The Global Financial Crisis has made more people aware of the importance of considering good corporate ethics, governance and environmental issues when examining the future worth of any investment.

Once upon a time responsible investment (RI) was considered a niche market. Today responsible investors come from all walks of life and the issues that motivate them are universal.

• They may have an interest in social issues, be a member of community, environmental, political or human rights groups.
• They could have a science background and be passionate about new energy technologies as a way of solving the problem of climate change.
• They may belong to a faith based or other spiritual organisation, or they might want to be close to nature and might just want to ensure its' preservation.

RI appeals to people from all age groups and all social backgrounds.

The most common reasons why people decide to become responsible investors are:

• To generate competitive returns whilst making a difference to the environment or society.
  
• To ensure your money is directed towards companies making a positive difference to the environment and the impact of climate change whilst avoiding those that cause harm.
  
• As a way to influence corporate behaviour and push for greater accountability on issues like employment and trade conditions, environmental sustainability and good corporate governance.
  
• To take your social or consumer activism to the next level.
  

As far as the GFC is concerned, adopting an RI strategy is an excellent way to facilitate improvements in corporate responsibility.

In summary then, the way you invest inside and outside of super can help you make competitive returns, as well as having a positive impact on the environment, socisal issues, and corporate behaviour.

That only leaves one question; What is YOUR money up to?