Patagonia Makes Headlines For Holiday Donation

By Kristin Peixotto

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The predicted $655 billion holiday shopping seasons kicked off with Black Friday last week, and consumers are protesting with anti-consumerism hashtags like “buy nothing day” and REI’s “opt outside.” Environmentally concerned company Patagonia, made world news as it committed to donating 100% of Black Friday sales to help the environment.

This effort generated an estimated $2 million donation, in addition, to the 1% of the company’s annual sales since 1985 (a total of $74 million). This money will go to the non-profit 1% For Our Planet, which connects companies with thousands of nonprofit organizations that help save land, protect forests, rivers and oceans, make agricultural and energy production more sustainable, getting toxics out of the environment, plastics out of the oceans and more.

This effort generated an estimated $2 million donation, in addition, to the 1% of the company’s annual sales since 1985 (a total of $74 million). This money will go to the non-profit 1% For Our Planet, which connects companies with thousands of nonprofit organizations that help save land, protect forests, rivers and oceans, make agricultural and energy production more sustainable, getting toxics out of the environment, plastics out of the oceans and more.

Company CEO, Rose Marcario said, “During a difficult and divisive time, we felt it was important to go further and connect more of our customers, who love wild places, with those who are fighting tirelessly to protect them.”

The environmental movements are not a new trend for the company. This certified B Corporation has been part of several environmental movements, including making news on Black Friday in 2011 for its “Don’t Buy This Jacket Campaign.” This campaign was launched to promote the company’s new progradont-buy-this-jacket-308m “Worn Wear,” which offers easy-to-follow repair guides, easy ways to recycle products, a trade-in program, and discounted gently used items. The company was also the first to introduce an innovative fleece material made from recycled plastic soda bottles In 1993, and currently offers environmentally friendly fibers, like TENCEL®, YULEX®, recycled polyester, and more.

Patagonia’s mission statement is, “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” The company aims to follow these ideals with their Black Friday donation.


Give Us Some Credit

A college student’s guide to establishing credit and using credit cards as a financial tool

By Talia Smith

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During my last trip to the bank, my banker checked my account, looked up from her computer monitor with a grin and extended her arm for a fist bump. What did I do to deserve such a first bump? I had a killer credit score.

What is a credit score?

A credit score helps credit card companies determine the risk involved with lending money to an applicant. A score can range anywhere between 300 and 850. A high credit score indicates a low-risk applicant whereas a low score indicates a high-risk applicant. Credit card companies offer cards to people with high credit scores because they are likely to pay their bill on time.

Three years ago, I applied for my first credit card. Since then, I have been able to keep track of my finances, establish a nice credit score and even travel for free using reward points. When used properly, credit cards can be a helpful financial tool to help college students track spending and earn cash back rewards.

College students commonly find themselves in trouble with credit cards. According to a 2016 Experian survey, 58% of college seniors said they have credit cards and 30% said they had credit card debt averaging $2,573. Overall, fewer college students are signing up for credit cards.

Prior to 2009, it was not unusual to see credit card companies setting up booths on college campuses. They were offering a deal no college student could pass up: free food in exchange for a shiny, plastic credit card. College students were easy prey to credit card companies looking to profit from young adults who did not know how to responsibly use a credit card.

The Credit CARD Act of 2009 held credit card companies accountable for transparency and prevented marketing to anyone younger than 21. Now, anyone under the age of 21 must show proof of employment or have a parent co-sign in order to apply for a credit card.

Yes, credit cards are a huge responsibility, but there are plenty of responsible college students out there who shouldn’t be discouraged from using credit cards. Credit cards have many advantages and with the right information, you too can establish credit, eventually qualify for a rewards credit card and reap the benefits. Just follow these steps:

  1. Determine whether you are ready for the responsibility of a credit card.

Credit cards have an array of benefits but require responsibility. It’s up to you to determine whether you are ready. Unlike debit cards, credit cards have a monthly bill to pay. There are consequences – debt, late fees, a lowered credit score – if you are unable to stay on top of it.

Are you a responsible spender? Hold off if you have spending spree tendencies. Credit cards give rise to overspending. It is essential for credit card holders have a good grip on their finances.

  1. Sign up for a student credit card.

If you have no prior credit, apply for a student credit card. They will help you phase into the obligation of a credit card and are friendly to the college student demographic. Most student cards will start you out with a low line of credit – about $500-$1,000. Be sure to spend well below your maximum line of credit.

Use it only to buy necessities such as groceries and gasoline. Download the app associated with the card to keep track of purchases and pay your bill anywhere. The purpose of a student credit card is to establish credit and prove you can pay off your bill every month; it does not matter how small the bill may be. Be sure to pay your credit card bill off in full and do not carry a balance.

What does it mean to “carry a balance”?

Carrying a balance is carrying debt. Card holders have the option to pay their bill completely or partially every month. A minimum payment is required but not the total money owed.

Let’s say you spend $300 during one statement period and you pay off $200. That means you carry a balance of $100 into the next month. A compounding problem occurs if again, you spend $300 the next month on top of the $100 balance from last month. Now the new balance is $400. Always pay your credit card bill off in full so you don’t carry a balance. More consequences arise when APR is part of the equation.

What is APR?

The acronym APR stands for annual percentage rate. Many credit cards offer 0% APR for the first year. Which means, if you carry a balance and cannot pay your entire credit card bill during a month-long statement period, then you will not have interest when the balance carries over into the next month. After that year-long 0% APR period ends, the APR can range anywhere from 7-25% depending on your credit score.

Using the prior example, if your credit card bill is $300 but you can only pay off $200, then you carry a balance of $100 into the next month. If your APR is 10%, then your $100 balance becomes $110 – now your bill is $410. Essentially, APR allows credit card companies to charge interest for not paying them back on time. The lower your credit score, the higher your APR rate will be. If you pay your credit card bill off in full every month, APR is a non-issue.

  1. Upgrade to a basic credit card.

Using a student credit card responsibly for one year should help you establish enough credit history to accumulate a high credit score. Now it’s time to lose the student credit card and trade in for a basic credit card. Look into credit cards offered by your bank. It’s convenient to have your credit card tied to your checking and savings accounts for seamless banking. Look for a card with 0% introductory APR, no yearly fee and applicable cash back.

What is cash back?

Credit card companies offer cash back as an incentive for customers to sign up for their card. For certain purchases, points are rewarded or a small percentage is reimbursed back to the card holder.

If a card offers 5% cash back on groceries and you spend $200 at the super market in one month, then you will receive $10 in cash back rewards. After one year, that could be $120.

  1. Start earning cash back rewards.

At this point you have proven to yourself and your bank that you are a reliable card holder and your credit score should reflect that. Acquiring more credit history opens the door to cash back rewards.

To earn the most cash back possible, identify your top spending categories and what is important to you. Are you a commuter? Then you want a card offering cash back on gas. Do you love to travel? Then you want a card with airline mile rewards. Do you buy everything from Amazon? The key is to identify your main expenses and profit off of them. Remember, a credit card is most beneficial when you are earning cash back for essentials for which you would otherwise pay with cash or debit.

  1. Score sign up bonuses.

Once you hack cash back, savvy spenders with a high credit score, high credit limit and inevitable expenses can benefit from sign up bonuses. Elite credit cards, usually with a yearly fee, offer the most cash back. They are attainable with time.

If you qualify for an elite credit card, and if you foresee an expensive and necessary cost, serious money can be made. Be aware that sign up bonuses are time sensitive and purchases must be planned accordingly. Also, be aware that there could be a service fee to use the credit card. Do your research to make sure the rewards will heavily outweigh the credit card service fee.

Example:

Your grandma wrote you a $2,000 check for college tuition. A credit card offers $650 worth of travel points if you spend $2,000 in the first three months of opening the card. There is a 2.75% service fee for putting your college tuition on a credit card which equals an additional $55.

This works if, and only if:

  1. You qualify for the card and your assigned credit limit is more than $2,055.
  2. You can open the credit card, make the purchase and pay it off immediately.
  3. You have the $2,055 in the bank with plenty of buffer.

In the end, you earn $595 worth of airline points.

Even if you do not qualify for an elite credit card in the near future, simply being aware that this is a possibility down the road will put you ahead of the game

You may have noticed that you have to acquire a few credit cards in order to work your way up to the one you want. Hopefully each one has a purpose in your life but it may be necessary to cancel an unused card. It is not good for your credit score to have a card with inactivity. Be aware that cancelling a credit card will drop your score slightly and timing is key.

It is important for college students to know about the possibilities that come with responsible credit card usage. Don’t let anyone tell you that you are not ready for a credit card; that’s for you to make the educated decision. There are too many opportunities for success and to redefine the stereotype of a college student credit card holder.

Budgeting: It’s not as bad as you think

Sarah Russell

If you’re anything like me, budgeting hasn’t always come as second nature. I first ventured into the world of budgeting in high school, when I got my first job. Each month I knew I had a set amount of money for gas, and a set amount for random spending. Easy right? Alright, now let’s head into college. Freshman year, a breeze! With dorm points taking care of food, and not needing to pay for gas since I didn’t have a car, there wasn’t much to worry about. Fast forward to now, my senior year of college, living with a roommate off campus and broke as Mark Helfrich’s career. I knew that unless I wanted to start living a stereotypical college kids life by eating top ramen for every meal, I needed to get my finances in order. So, like the self-sufficient adult I am, I called my mom. Fifteen minutes of “yep, mhmmm, yes, ok, yeah I did, okay, yep, love you too”’s later I decided I needed to keep better track of what I was spending. After a bit of research, I discovered a website called mint.com that helps you keep track of your expenses.

Mint is a free (keyword: FREE) service that helps you stay on top of your spending habits. You can use Mint through it’s main website or you can access it through the app. Mint first connects you with all banking services you use. Through that, Mint collects information regarding what you spend your money on. It categorizes it into subjects such as alcohol and bars, food, clothing, utilities, etc. so you see exactly where your money is going.

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Besides seeing where your money is headed, Mint allows you to set goals and limits for yourself. You can set goals for how much money you wish to spend in each category per month. By creating a budget, you can track and monitor what you are spending. Setting goals and budgets for yourself can help you maintain a steady balance in your bank account each month.

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Tech giant Apple records 1st quarterly loss in 13 years

Apple holds a special place in the heart of the masses. Known for its simplicity and amazing innovation, Apple had experienced massive growth for well over a decade. Unfortunately, 1st quarter reporting results have halted the amazing growth that has made Apple the goliath of the tech industry. After the quarterly earnings report was released, their stock price fell 8%, now sitting at around $93 per share. To make matters worse for investors, Billionaire Carl Icahn instantly sold off all his shares of the company, which amounted to over $700 million worth of shares. Icahn claims to have a strong love for the company and its leadership under Tim Cook, but fears of Chinese government intervention with the company was enough to give up his stake. The strained relationship between Apple and China has led their government to shut down iTunes movies and ibooks in the country just this week.

“They went too far in the high end of China,” states Tom Giles of Bloomberg. Their focus on high end Chinese consumers left them vulnerable to competitors whom were willing to slash their phone prices. In the globally saturated market of smartphones, it is extremely difficult to continue growth at the rate at which Apple had for so long; especially when the iPhone drove the most revenue for the company (2/3).

It is time once again for Apple to innovate and deliver a product that consumers can get behind. They have made acquisitions in Virtual Reality and automobile industries, so it will be interesting to see where they direct their innovation. After all, this is what made Apple so great. It’s time they go back to their roots of radical ideas, bringing forth a product that can “Wow” the world. Their brand, its stakeholders, and their loyal customers desperately needs fresh and memorable innovation.

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by Estuardo Perez

 

 

GoPro Off To A Rough Start In 2016

By the end of 2015, Mark Woodson, the young CEO of GoPro, was listed as the 5th highest
paid CEO among U.S. public companies. Woodson raked in $77 million dollars and even managed to splurge on an early Christmas gift for himself. According to Forbes, On December 22 of last year, Woodson ordered a custom, 180 foot yacht with a price tag of $40 million. Woodson’s lavish spending appears to have served as a toast for a successful end to the year, although GoPro’s stock had declined over 70% during the last 12 months.

Here we are three weeks later, and GoPro stock has hit its all-time low of $10.87, caused by the Hero 4 Session Camera’s failure to meet sales expectations. Their lack of product sales has negatively impacted GoPros staff as 105 positions will be terminated. This was the same company that had a growth of 50% over the previous two years! The future of GoPro is of much concern to investors.

Evidently, the Hero 4 was a flop which was not worth the price tag GoPro set forth. While their product line will extend into the drone market in 2016, it doesn’t sound like something Investors can rely on to make up for lost sales.

The Karma Drone by GoPro is scheduled to release by the Christmas holiday season. GoPro will have a rough time competing with the Chinese company, SZ DJI Technology Co. which already sells top quality drones. Not only will GoPro have to ferociously compete for the growing drone market, they would also strain its partnership with 3D Robotics Inc. another drone-making company which includes GoPro cameras with its final product.

While the idea of a drone is appealing, GoPro is in dire need of innovation that can further increase the profitability of its business. Investors will continue to flee as they see the value of GoPro plummet. Screen Shot 2016-01-14 at 4.39.38 PM.png

Forming the SOJC Club Alliance

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Bobby Whittingham

Last spring we created a stock market index to follow stocks that are interesting for students. IR Futures members “buy” a stock of their choice for $1. We track the stocks on a Google Finance portfolio and watch for industry news and corporate developments that impact the stocks. During the first meeting of the following term, whomever’s stock has the greatest percentage increase in value wins the fees we collected and more importantly, crowned top stock analyst.

This term IR Futures invited a handful of other SOJC student groups to go head-to-head with us on the stock index. We offered to teach them what we know about stock fundamentals to get the index off on the right foot. Esuardo and myself are creating a brief presentation and will meet with Duck TV, AHPR and PRSSA.

What the presentation will cover

Mainly, we want to raise awareness for IR Futures and get students interested in personal finance. In terms of discussing stock market basics, the simpler the better. We’ll explain how corporate news announcements and industry trends impact stock prices. The IR Futures Google Finance portfolio and Wall Street Survivor game make it easy to follow stocks and get access to relevant market analysis and industry news. We hope to help students understand the dynamics and demystify the markets. Knowledge is power and we all have a stake in the financial markets even if we don’t own any individual stocks.

After making our rounds to the SOJC clubs, we hope to have an expanded student index up and running by the first meeting of next term. Who knows…if all goes according to plan the game could expand to all SOJC clubs!

 

It’s Never Too Early To Dive Into The Stock Market

By Emma Scherzer

One year ago, with close to no knowledge of economics or money, I entered foreign territory when I decided to invest in the stock market. As it turns out, it was one of the best decisions I’ve made in my young life.

Lululemon was down on their luck in early 2014. After a public relations nightmare when the company’s founder Chip Wilson said in an interview, “some women’s bodies just actually don’t work” for Lululemon’s tight fitting pants, and a major product recall on see-through leggings occurred, many people ditched the stock in exchange for something more stable.

Contrarian, value investing is based on the principle that out of favor stocks have potential for the future. With a strong brand name like Lululemon, they weren’t expected to be down for long. The company’s down turn in 2014 presented a perfect opportunity for people to invest in Lululemon because the stock was more affordable. So I emptied out about half of my piggy bank that had accumulated from cashiering at a grocery store for two years, and poured it into the stock market. Fortunately for me, my dad is an investment advisor so he was able to guide me along the way.

Rick Ferri said in an article in the Wall Street Journal that the “solution is to have a realistic philosophy and a practical plan. A philosophy might be that the markets aren’t predictable and that it’s imprudent to try to beat them. A strategy based on this philosophy might be to hold the same fixed allocation in stocks, regardless of what the market does. This would have meant buying into the market during the financial crisis when prices were low and selling some after the market recovered. That’s a realistic philosophy and a practical plan.”

What I’ve learned over the past year is that in the short term the market is very irrational, in the long term it’s more rational. Putting money into the stock market is considered speculative investing, which is a financial transaction that has a significant risk of losing all or some of your money. There’s never a 100 percent guarantee that you’ll get a return on your investment, but you never know unless you try.

For students who are interested in getting involved in the stock market, anxiety is a common feeling. Charles Rotblut, vice president of the American Association of Individual Investors says that he tries to comfort nervous investors by, “suggesting the option of pulling out a calendar and circling a few days in over the next several months. On each of those days, invest part of whatever amount you are planning to allocate to stocks into the market. This will reduce the timing risk of jumping in with two feet on a single day, while avoiding making a decision based on what you think the market will do.”

The bottom line is it’s never too early to invest in your future. Investing a modest amount today can lead to bigger returns in the future. Taking a bit of time out of your day to learn about investing now can give you the competitive edge for financial stability in the future.

Sources:

http://www.wsj.com/articles/SB10001424127887323452204578289721356165706

http://www.wsj.com/articles/SB10001424052702303393804579311062582473556