Doing Business

[iamsoners]

I think most thoughtful mustachians have come to a moment where maximizing their savings (or investment gains) has come in conflict with other values they might have.  I'm wondering how you all handle that?

A few examples:
I currently bank with ING, which is now owned by Capital One.  I personally find Capital One to be incredibly slimy and part of the cabal whose recklessness helped crashed the economy in 2008.  The obvious alternative is a good local credit union but I've found that ING trumps the credit union significantly in both interest rate and conveinance.  So, the question becomes, is it more important to me to stick it to the man or to make an extra $15 or so a month in interest.  Despite really strong beliefs about the banking industry, I've had a really hard time overcoming my mustachian ways and making the leap.  But, I just filled out the application for our local credit union, so I'm on my way.

As another example, I recently had to rent a car while on vacation.  I'm a big supporter of "new economy" or "shareable" solutions and would have loved to use RelayRides.  But in the end, RelayRides was $20 more and a bigger pain in the ass so I went with Enterprise.

Maybe a more common example is choosing a paper towel made out of recycled paper instead of newly cut trees.  Or choosing quality clothes over cheap ones that wear out quickly.  Or swallowing the up-front costs of CFLs for the long-term savings.

In all of these things I find my mind is at war with itself--on one level I know what's better but on another level it's very hard to overcome what seems like a "deal."

So, how do you all handle these sorts of moral predicaments?  And what tools do you use to overcome mental battles like this?

[plantingourpennies]

This is a really tough question because of the number of situations like this that exist; there is no easy answer!

Mrs. Pop and I try to concentrate on the big stuff first, the low hanging fruit, and attack the other issues when we can. For example, I would have loved to use RelayRides as well, but not for an extra 20$ and a pain in the ass. I don't feel guilty about this because over the last year I've been able to negotiate working from home 2 days a week-this will have a much bigger impact on the environment (and my pocket book!) than picking what car rental place to use.

Same with paper towels-I may not buy the most environmentally friendly ones (actually, didn't know they existed till just now!), but since we switched to using towels in the kitchen, and rags in the garage, we don't buy many papertowels at all.

One last thing-read this article on Vimes boots when you can-it will help you mindset around paying more upfront.

http://www.goodreads.com/quotes/72745-the-reason-that-the-rich-were-so-rich-vimes-reasoned

TL/DR: Get the big stuff right first, don't sweat the small stuff that you can't make perfect. And don't let anybody (corporations, people, whatever), guilt you into thinking you should do this or that...

[mustachecat]

Oof, I run into this conflict all the time. I actually had the same problem with ING. My dislike for Capital One was compounded by an awful experience I had with them with my first credit card in college. Never again!

I ended up switching to Alliant Credit Union (www.alliantcreditunion.org), which has a national reach. The rate for a savings account is the same as ING, and the checking rate is better. I forget what ATM network they're on, but it's the same one as the pre-Capital One ING, so it was pretty easy to switch over. I do need to deposit a few checks each month, but I can do that via my smartphone (taking an image of the front and back through their app), or enter in the info online and mail it in (they provide the envelopes; can't remember about stamps, since now I only use the phone app). Their customer service is great too.

I do think that in many of your examples, there's a clear financial value to the moral choice. Yes, the upfront costs of CFLs are higher, but the energy savings over the long run will save you money. Skip paper towels altogether and use cloth; even with the costs associated with cleaning them, you'll come out ahead. Same if you pay three times as much for shoes that last ten times as long.

I get into trouble with things like ordering cat food from Amazon. If money weren't an issue, I'd buy from my local pet store and support them. But it's 20% more, so... Same thing with my local hardware store and garden center vs. Home Depot.

Anyhoo. For those situations were a higher initial cost leads to long-term savings, go for it! You have every moral and Mustachian reason to. For real cost vs. values trade-off, I'm still struggling too.

[ShavinItForLater]

Is your dilemma with ING for a savings account?  If so check out TIAA Direct, a relatively new entry into the market from TIAA/CREF that I think would qualify as non-slimy.  Right now they're offering 1.25% APY on savings accounts--higher than ING.  Much lower rates on checking though (.05-.15% depending on balance), so I suppose it depends on which accounts you're keeping the money in.

There may be a "third solution" like that which wins on both the moral and financial fronts more often than you think.  When there isn't, I consider it a value judgement and everyone may have different answers to specific situations, it really comes down to how much it's worth to you personally.  You can likely rationalize either side, and some would argue that's what really happens in your brain--you choose and then rationalize.

[arebelspy]

As another example, I recently had to rent a car while on vacation. I'm a big supporter of "new economy" or "shareable" solutions and would have loved to use RelayRides.  But in the end, RelayRides was $20 more and a bigger pain in the ass so I went with Enterprise.

I wouldn't call you a "big supporter."  We've found what that support was worth to you: less than $20 and some hassle.  Would you have done it if it was $10 more?  $5?  Only if it cost the same, but was more hassle?  We don't know, since the situation hasn't happened.  We know what it's not worth to you.

You have to take a good hard look at your values versus your spending in these situations.

This idea of ethical investing has come up a few times, you may want to check out these threads:
https://forum.mrmoneymustache.com/ask-a-mustachian/how-do-i-build-a-%27stache-without-harming-others/
https://forum.mrmoneymustache.com/ask-a-mustachian/morality-and-investing/
https://forum.mrmoneymustache.com/journals/fidjo-forecasts-a-fantastic-financial-future/

My response to the topic (from that last thread):
I think the answer is simple, though some don't like it.

One must necessarily invest in things they have more control over.

Real estate, businesses, etc.

It involves more risk, and more work.

On a continuum of investments that looks like this:
Paper Assets --- Real Estate --- Businesses

The risk goes up as you go from left to right, as does the return, as does the amount of work, as does the amount of control.

If one desires to be investing in something they have more control of, they need to focus on the latter two, or very specific paper assets (index funds don't cut it).

The reason why some don't like this idea is that it takes more work for them. They'd love to just invest in index funds and have all those companies act in a way that aligns perfectly with their ethics.  They'd love to get the highest possible returns and have all those companies act perfectly in accordance with how they would, ethically.

Won't happen.

Just as when you hold any ethics, it necessarily requires convictions, which often require more work and discipline.  Buy a commercial building and rent it to businesses with whose practices you agree with. Buy an apartment and rent it to a niche you feel you could be helping (say, teachers). Start your own business that organically raises vegetables and sells them at Farmer's Markets.  Or whatever interests you.

Those convictions will require tough decisions sometimes.  Do you want the highest return, or do you want to promote your ethics?  Do you want something easy, or do you want to promote your ethics?

All that being said, it's not a cute, easy "neat" solution, like "invest in ETF X,Y,Z."  But it is simple enough.  Just not easy.

[Devils Advocate]

Do what's easy...

I'm not here to save the world.

DA