Monday, January 3, 2011

you vote with your money every day.


Up until recently, the world's big banks were financing dirty energy. In 2009 Bank of America, Citi, and JP Morgan Chase collectively underwrote almost $70 billion for the coal, oil, and gas industries. JPMorgan was the leading US financier of companies that engage in mountaintop removal coal mining - including Massey Energy, the company that owns the Upper Big Branch mine where 29 miners died last year. While some banks have dropped out of the game, PNC bank is still in it.

At the time that these banks - my big bank included - were making these investments, I was aware that I was using my dollars to support environmental destruction. It didn't feel good, but I didn't do anything to change the way that I was voting with my money.

That changed this past summer, when I found myself involved in a scary personal identity theft situation. Even my big bank told me that I had likely been the victim of an inside job - definitely time to end that seven-year relationship!



As a result, I finally checked out Ariana Huffington's Move Your Money campaign:



I then did my research on big bank alternatives: community banks and credit unions. I then picked one, and MOVED MY MONEY.

In addition to using a community bank or a credit union for your checking, savings, credit card, and loan needs, I just discovered peer to peer (p2p) lending/investments. Check out the social lending networking websites Lending Club and Prosper.

Lending Club members directly invest in and borrow from each other, avoiding the cost and complexity of the banking system. The savings are passed onto members - better rates for borrowers, and better returns for investors. There's no fee to join, and for lenders there's no minimum investment requirement. Lenders can invest in 3-year or 5-year notes/loans made to pre-screened borrowers. Returns have been over 9.5%. As you receive monthly payments, you can reinvest or withdraw these payments at any time. Plus, you can combine the Lending Club returns with the tax advantages of an Individual Retirement Account. Lending Club offers Traditional IRA, Roth IRA, SEP IRA, or Simple IRA with rollovers from your current IRA or 401k.

Here's an intro to Prosper and p2p lending:



A pretty detailed summary of how Lending Club works:



I have to teach myself a lot more about p2p lending as an investment option, but this blog post is a start:)

If you're still banking with a big bank, I highly encourage you to move your money. It's really not that difficult, and you'll feel SO GOOD after you do it:) I absolutely love my new bank, and I feel good every time I do business in the branch or pull out my plastic cards to make purchases. Can't beat that:)

2 comments:

  1. Nicole,

    I just came across this article. I think you would be interested in a project I just launched on kickstarter:

    http://www.kickstarter.com/projects/filtericious/filtericious-the-open-source-search-engine?ref=category

    We have created an open-source search engine with the intention that it be used as a way for people to vote their money and "give capitalism a conscious". It deals with everything you are talking about here. If we don't get conscious about where the money is flowing, we will always be on the losing end of the deal. But if we can start to command the flow, as you are doing, I think we can affect real positive change.

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  2. Hi Alex! Thanks so much for finding the post and for the comment. I watched your Kickstarter video - really nice. Good luck!!

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