You don’t need a big stash of cash to be an investor and get a higher rate of return than the pittance banks are offering on savings accounts and CDs. The Internet has opened up vast markets for those who want a more hands-on approach to investing and who want to invest in things they care about.
Socially Responsible Investing
Socially responsible investing seeks to couple doing well with doing good by recognizing corporate responsibility and societal benefit as valid investment objectives. Also known as “triple bottom line investing,” this type of investing seeks to simultaneously yield financial, social and environmental returns. The market for socially responsible investing has grown from $40 billion in 1984 to $3.07 trillion in 2012. There are many socially responsible mutual funds you can invest in just as you would any other mutual fund.
Microfinancing is an investment vehicle that pools funds from investors and uses the fund pool to make small loans to low-income individuals all over the world who do not have access to conventional banking services. Modern microfinancing was pioneered by Dr. Mohammad Yunus, a professor of economics at Chittagong University. He began by lending to poor women in the village of Jobra, Bangladesh, in the 1970s and went on to found Grameen Bank in 1983 and win the Nobel Peace Prize in 2006. Microplace is one of many organizations that provides online registration connecting those seeking to invest to those seeking to borrow.
Peer-to-peer is an online community-based lending business model. Companies like Prosper and Lending Club bypass the banking system and connect people who want to loan money with people who want to borrow. Borrowers fill out an application online that includes the purpose of the loan and are then screened for creditworthiness. If they qualify, their proposal is posted on the website for potential investors to view. By bypassing the banking system, peer-to-peer lending can offer better interest rates to borrowers and higher rates of return for investors.
Investing in solar panels for your home can pay dividends. The initial cost in the system can be substantially reduced through various rebates, tax credits and incentives. Once your system is up and running, you can sell the electricity it produces to your utility company. As of spring 2012, 42 states and the District of Columbia have laws requiring utility companies to buy power generated by individuals at the retail rate. This means the excess energy collected by your solar panels during the day is sent back to the grid, causing your meter to run backward. When you use electricity at night after the sun is down, you pull electricity from the grid. “Net-metering” is the difference between what you draw and what you send back, but the payoff doesn’t just come from saving on your utility bill. If you generate more electricity than you use, utility companies must pay you the difference -- in cash. Some states even allow you to be your own power broker by issuing certificates for every 1,000 kilowatts generated, which the utility companies will purchase from you.
Lisa Dorward was a corporate financial executive and business consultant for more than 15 years before becoming a writer in 2003. She has B.A. degrees in both history and creative writing and earned her M.F.A. in creative writing in 2008, specializing in novel-length historical fiction.