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Money: Building societies can make mistakes too

January 31st, 2008 by monies

Perhaps unsurprisingly, this is not a view shared by many thousands of their customers who find that “cuddly mutuals” can, at times, deliver service that is just as appallingly bad as the publicly-listed banks they try to distinguish themselves from.

So what happens if you want to complain about your building society? The Building Societies Ombudsman’s office is the place to go.

Established in 1986, the office has a staff of 35, many of them lawyers. The Ombudsman is Brian Murphy, a solicitor who worked in private practice for many years The service, provided free to complainants, is funded by the building societies. All societies are required by Parliament to belong to the scheme. Its annual operational budget is just over pounds 1.5m. How independent is the Ombudsman? Of the so-called “final decisions” made by the office, approximately two thirds favour societies and one third back consumers, a similar batting average to most other Ombudsmen.

Most complaints are from personal members of a society, but the Ombudsman will deal with companies, firms, clubs or associations with a turnover not exceeding pounds 1m. However, the aggrieved customer is first urged to approach the society to attempt to resolve the issue through its internal complaints procedure. This normally takes six weeks.

Complainants can write to the Ombudsman first, but his office will just pass the letter on to the society. Should a stalemate ensue, a letter confirming that the internal complaints procedure has been exhausted should be obtained and sent to the Ombudsman. His office will then forward a complaints form for completion and return. The Ombudsman will not deal with a complaint if:

t It is about general creditworthiness;

t It relates to a society’s general policy;

t A court or another ombudsman is involved;

t Or it is without substance or clearly has no reasonable prospect of success.

Additionally, he may refuse to help if over six months has elapsed since the complainant became aware of the matter. Furthermore, his powers to deal with membership rights are extremely limited with regards to conversion to a bank, mergers or takeovers.

The Ombudsman’s terms of reference only permit him to consider a complaint if it is about “a service of a kind which is provided by building societies for individuals in the ordinary course of business”. Conversion in itself does not fall within this category.

Even so, for the year ended March 1998, nearly 47 per cent of the incoming workload related to conversions. Although his office cannot challenge the fairness of the terms for issuing shares, he can investigate actions by the society which resulted in the member not receiving the windfall. These may be the failure to update address records, resulting in a member not receiving the details, or failing to explain that the account opened would not qualify for any windfall.

With five large conversions in 1997, six lawyers worked almost exclusively on this subject. Of the 7,204 complaints conversion complaints received, 2,391 became cases. This placed a considerable strain on the office and, by the end of March, 1,551 cases, nearly half of which related to conversion, were outstanding.

The office initially attempts to resolve any complaint by conciliation. If this fails, the Ombudsman examines the papers and issues a “preliminary conclusion”, on which both parties are asked to comment. If the matter is still not resolved, the Ombudsman issues his “final decision”.

The complainant has to reject or accept this. If it is accepted, both parties are normally bound by it, but if rejected there is no right of appeal. However, the complainant’s legal rights remain unaffected. Societies are bound by the Ombudsman’s decision unless they take the “publicity option”. This route has only been taken twice. The society then has to publish its reasons for not conforming to the Ombudsman requests.

The Ombudsman can make awards up to pounds 100,000. The average time for resolving cases is 4.8 months. Of the 15,473 initial complaints received to the year ended March 1998, 7,204 related to conversions; 4,306 to mortgages and 2,183 to investment and banking. Of the total, 4,519 were outside the terms of reference, and a staggering 10,187 did not proceed, primarily because complainants did not respond to requests for further information. Only 934 cases were resolved by the society’s internal complaints procedures, while the Ombudsman resolved 1,548.

For `A Guide for Applicants’ contact: The Office of the Building Societies Ombudsman, Millbank Tower, Millbank, London SW1P 4XS (0171 9310044)

Author: John Andrew

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Why money makes the world go round

January 30th, 2008 by monies

Playing swapsies Money has not always been about coins and notes.

In the old days, thousands of years ago, the way you paid for something was by “bartering”, or swapping.

Just like today, people had different skills. Some were very good at making clothes or tools. Others were good at gardening: they could grow lots of tasty fruit and vegetables.

A few people might be excellent hunters: they had the sharpest spears. Or they could hit a target with an arrow better than anyone else.

Then there were those who might not have a special skill. But they could work hard. So they would offer to work for someone in return for food, or clothing, or a roof over their head.

If you wanted something, like potatoes or a chicken, you had to swap it with something you had, maybe a woollen shirt, or an animal skin to keep warm in winter.

Bartering worked well as long as everything you needed was easy toget hold of when you wanted it. And you didn’t need that many thingsto live on.

But things could get complicated. If you all lived far from each other, you would have to carry your things to one friend’s house, then the other, swapping every time. They would all have to do the same.

What would happen if you woke up one morning and you fancied a pizza and an ice cream for supper instead of potatoes? That’s a load of extra bartering!

And what happens if you don’t have anything the ice cream seller wants? Maybe one of your friends does. But then you have to make more and more journeys, carrying out clever swaps. Then you would be too tired to enjoy what you have.

Money is a way round that. If everyone uses money, life becomes easier.

Question: Here is a list of three things:

A chocolate biscuit, A large plastic bottle of your favourite drink, A CD of your favourite pop band or singer.

Which costs more? Why might that be?

The first money What kinds of things were used for money in the old days?

Just like today, people needed to have something that they could carry easily with them. It couldn’t be bulky or heavy. At first, it had to be rare or valuable enough so that other people might accept it in exchange for what you wanted.

In many parts of the world, silver or gold was used. Often they were stamped, sometimes with the head of the local ruler.

This was to show that they were “official” coins. Therefore, the amount of gold or silver in each one was exactly the same as in all the other ones you might have in your purse.

Not everyone used coins. In the islands of Fiji, in the Pacific Ocean, whales’ teeth were used as money.

In parts of Africa, salt was used because it was very rare. It could also be used to make some food, like meat, last longer.

In ancient Britain, sword blades were used. Metal was very hard to come by and turning it into a sharp blade was even more difficult.

In ancient Greece, iron nails were used for a similar reason: they were both rare and sought-after to build strong houses.

Question: Think of three things you might use as money if coins were not around.

Would anyone want what you have to offer?

The bank note Bank notes only came along much later. Do you know why?

If you ask your mum or dad, or a teacher, to have a look at a (pounds) 5 or (pounds) 10 note (don’t forget to give it back!), you will see that it promises “to pay the bearer of this note ” If you were travelling very long distances, a “promise to pay” meant that you could carry just a few pieces of paper from one end of the world to the other.

That piece of paper could then be exchanged for coins when you got to the other end. Or maybe used to buy something else altogether.

For such a promise to be believed, it had to come from someone you could trust. You – and whoever you gave the note to – had to be certain that the note could be exchanged for coins at any time. That is how many banks started, by issuing notes that people could redeem in coins, or pass on to someone else. They had to have lots of coins in a safe to do that.

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MONEY: Make life nicer with a cash ISA

January 29th, 2008 by monies

An Individual Savings Account allows you not to pay tax on the interest you earn – and you can invest up to pounds 3,000 in a cash ISA this tax year.

With ordinary savings accounts you have to pay tax of 20 per cent on any interest if you are a basic rate taxpayer, or 40 per cent if you’re on the higher rate.

Yet a massive 83 per cent of us don’t use our annual tax-free allowance. The financial advisors’ trade body IFA Promotion says pounds 127million in tax could be avoided each year by sheltering savings in ISAs. The Chancellor’s Budget decision to extend the pounds 3,000 limit of cash ISAs until 2010 is great news – so make the most of the opportunity to save tax-free.”

Anyone over the age of 16 can invest in a cash ISA – you can put in as little as pounds 1 in most accounts. The maximum you can pay in during a tax year is pounds 3,000. The average return this year is pounds 3,137.61 – up on last year’s figure of pounds 3,111.73, according to Moneyfacts magazine. This is based on an investment of pounds 3,000 made on April 6, 2004, with no withdrawals over the year.

The top performer was a fixed rate ISA from West Bromwich Building Society, which returned pounds 3,160.50. However, this was only available to the society’s existing customers and is closed to new investors.

The best variable rate ISA with a return of pounds 3,155.27 was from Abbey. And bottom of the table for the second year running was Northern Rock’s cash ISA, with a return of pounds 3,107.09.

Our table on the left shows the current best buy cash ISAs. Top of the table is First Direct’s mini cash e-Isa, which pays 6.25 per cent interest. But this rate only lasts until October 6, then reverts to a variable rate, currently 4.35 per cent.

Alliance & Leicester’s Direct ISA currently pays 5.4 per cent and can be operated over the internet or by phone, while Abbey’s postal ISA pays 5.35 per cent.

Stuart Glendinning, of the financial website www.money supermarket.com, said: “With so many different cash ISAs available, it is very important that consumers search out the best deal.”

ENGINEER Caroline Lang has invested the maximum pounds 3,000 permitted this tax year in an Abbey postal ISA.

The 30-year-old, from Putney, South-West London, said: “I bought my two-bedroom flat a couple of years ago and so haven’t been able to save much until recently.

“But I moved the money I held in other savings accounts into the ISA, so I can earn as much interest as possible tax-free.”

CHECK THE BEST BUYS

First Direct

Mini Cash e-ISANonepounds 1 pounds 15.4 pounds 15.35 6.25*Alliance & Leicester

Direct ISANoneAbbey

Postal ISANoneLambeth BS

Postal ISA45 dayspounds 1,0005.65*Portman BS

45 day notice ISA45 dayspounds 3,0005.5* 5.7 Halifax

Fixed Rate ISA Saver5yr bondpounds 3,000*Introductory rate for limited period

Author: MELANIE WRIGHT on your finances

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Making money and/or creating wealth

January 28th, 2008 by monies

“I made all the mistakes,” said Williams, 45, from her 2,500- square-foot office suite on N. Robinson in Oklahoma City, where she heads the Williams Financial Services Group, which serves about 225 investors.

“Like a lot of African-Americans, when I first started making money, I went after a lot of possessions,” she said. “I learned, like everybody else, that possessions do not lead to financial security.” Often, it’s just the opposite.”

She said that about 15 years ago, when she was becoming a star salesperson for Equitable Life Insurance Co. of New York and big commissions were starting to roll in, she did what most of us would have done: bought nice things for herself.

“One should [save] at least three to six months’ take home income before getting that beautiful living-room furniture,” Williams reflected. “Of course it’s hard to do that when you want things n-o- w.”

The oldest of eight children, Williams grew up in Philadelphia in a neighborhood so impoverished that once, dumbstruck, the family found their refrigerator robbed of all its food. To the usual problems of providing for a large household, her father, a postal worker, was also burdened by heart disease. He died when Williams was 19 and had only $15,000 in life insurance.

“I saw all the problems a family can have,” said Williams, who, while still a child, resolved to raise herself from poverty and help others do the same.

She won an academic scholarship to the University of Pittsburgh, graduated with a degree in psychology and was recruited, while still in college, to join the sales staff of Equitable. She built a sales record on cold calls and hard work. “I was too naive to know what I couldn’t do,” she said.

Did she have a mentor? She laughed and said: “I sure could have used one. I did have good training materials and I read every book I could on sales and on the insurance industry. I knew my products very well.” Within a year she was the top salesperson in her group.

Over the previous years she had married, become a mother and moved to Oklahoma City for a fresh start. Although they divorced, she remained in Oklahoma City. Her oldest son is 24 and lives in Atlanta. She and her second husband, a home designer, also with offices on N. Robinson, have three children, 16, 11 and 7. In addition to her membership in the Women Presidents’ Organization, she is president of the local chapter of Jack and Jill, one of the oldest and most exclusive social clubs for African-Americans, founded in 1938 in her hometown of Philadelphia.

“I was happy to become a member of Jack and Jill,” said Williams, “but my mother, who now lives here in Oklahoma City, was very proud.”

The only one among her siblings to have finished college, Williams says she enjoys the reputation in her family of having made it, financially, but her own assessment is more cautious.

“You can think you’re rich and not have that much wealth,” she said, adding that her ambitions for her own business are to grow her sales staff from one to four and to move away from commissions and become a totally fee-based company. A financial planner’s fee is typically 1.5 percent of a portfolio’s value per year, for holdings of less than $100,000. Williams stresses that wealth consists simply in having most of your assets in forms that are likely to increase in value over the years.

When she left Equitable eight years ago to go it alone, she found a niche among schoolteachers who poorly understood their retirement plans. She brought in pizzas for teachers during their lunch hour, during which she would point out gaps in their plans and open the door to selling them supplemental products like annuities and life- insurance policies. Today, in light of the tech meltdown, she advises clients to balance their stock holdings among six categories: government securities, bonds, value stocks, growth stocks, small capitalization stocks and cash. You want to shift money, she said, toward the conservative end of the spectrum — cash, government securities, bonds and value stocks — until winners re-emerge from the ruins of dot-com companies.

She feels a particular need to help African-Americans create wealth.

“I begin every sale with education, telling clients about my own experience, and finding out about their experiences, and learning how much we have in common,” she said. “Education almost always leads to sales, but, and I am telling the truth, between educating and selling, I would much rather educate. That’s the future.”

She is trying to find time to write a book she has never seen in the marketplace. The working title: The Journey to Financial Planning for African Americans.

Marsha Firestone is the president and founder of the Women Presidents’ Organization. For information on WPO, call (212) 688- 4114 or visit www.womenpresidentsorg.com.

Author: Marsha Firestone

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Money: Make big savings on travel insurance

January 28th, 2008 by monies

Sixty per cent of holidaymakers still buy travel insurance from their travel agent, losing out on big savings for similar – and even better – cover elsewhere, according to research by Woolwich.

And now that many families holiday abroad more than once a year, a large percentage of them are losing out by taking out single-trip cover when annual insurance could save them a fortune.

Take, for example, a family of four buying single-trip insurance from a major high street travel agent, like Thomas Cook, at around pounds 125 a time for two trips to Spain in the same year. That will cost them pounds 250.

But annual cover with Primary Direct costs just pounds 55.56 for a family of four, and will cover them for as many trips in Europe as they like in one year.

As more and more people – one in five – take two or more trips a year, the savings can be enormous with annual cover.

Currently fewer than one in five of us shop around for the cheapest cover or buys direct from a specialist agent.

To find the best insurance deals, try the Internet – check out www.costout.co.uk or www.preferential.co.uk – or call Primary Direct on 0870 4443434 or Churchill Insurance on 0800 0264050.

Skiing is still a favourite winter get-away, but one in 10 people will come home with broken limbs or other injuries. With the price of treatment abroad having risen by about 10 per cent in the last three years, it is vital to be properly insured. A broken leg, for example, can cost pounds 10,000 for treatment.

Many annual insurance policies will not automatically cover you for winter sports, so be sure to check before you go. And make sure they cover you for skiing off piste as well, in case you get adventurous.

If they don’t offer cover, you will be able to buy extra insurance for a small fee. This is usually cheaper than buying separate insurance, especially if you are planning a second holiday later in the year.

And if you do need to make a claim, make sure you keep any receipts, credit card statements, police reports or photographs for evidence.

Author: FIONA JAMES

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Group to help Maryland doctors make more money

January 27th, 2008 by monies

MedChi began the program last year to help physicians who have little or no expertise in business management, and to offer guidance and support to smaller, rural practices that can’t afford practice managers.

Physicians can receive a pamphlet, It’s Your Nickel, Business 101 for Doctors, call the MedChi practice support team, and attend seminars.

By adding consultants, MedChi is following in the steps of Virginia. The fee-for-service resource will be tailored to each physician’s specific needs.

There’s a higher level of issues to be aware of, said T. Michael Preston, executive director of MedChi. No matter how good a doctor is, if he can’t pay the bills, patients can’t avail themselves of his services.

MedChi has more than 7,000 members out of the 10,000 practicing physicians in Maryland. All of the profitability resources, with the exception of the consultant services, are included in the $395 annual dues. The estimated savings for physicians, however, may far exceed the annual dues.

For example, MedChi calculates that a four-doctor pediatric group grossing $1.4 million per year, with an annual growth rate of 5 percent, can save up to $45,400 per physicians by using MedChi’s services.

The approach, titled UKAN, consists of understanding changes in revenue or costs, knowing the profit per patient visit for each payer, analyzing the costs to find savings and saying no to unreasonable payer contracts.

Physicians can’t afford to do unprofitable business, Preston said. We want to make sure physicians understand there’s a contractual relationship with a health plan, and we encourage doctors to say no to health plans when they’re uneconomical.

In addition to turning down uneconomical health plans, MedChi’s UKAN plan includes hiring nurse practitioners, improving collections, ensuring proper coding, dropping short-term disability and using flexible spending programs.

Through the initiative, members can also purchase employee benefits and insurance, discount vaccine products, and have an analysis of their telecommunications systems.

We can’t really focus on the clinical needs they have, Preston said. We try to focus on services and guidance on things that are common to all physicians – compliance and regulatory issues – and business issues.

Author: Debra Siedt

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The Quickest Way To Make Money On Earth

January 27th, 2008 by monies

I am going to assume you don’t want to break the law or rob a bank, because as quickly as it could make you wealthy to rob your local casino, it is just not the right thing to do. I will also assume you don’t want to marry money or hope for a winning lottery ticket, what I am going to propose is a sound and hopefully rational explanation of the quickest way to make money on Earth.

First, I want to introduce you to the three types of money. Time money, Credit money and Solutions money. All three of these are ways to get money. Time money is connected to time and is typically offered in a job. You work 8 hours, you get 8 hours pay. The very next day you start from scratch, the work you did yesterday has been paid for and you will never earn for those 8 hours of work ever again. The next is credit money and this type of money trades tomorrows hours of work today. Typically, you can only get credit money, if you can prove you work in a job and have access to time money. So these two methods of getting money are both closely connected to the time component.

The third type of way to get money is solution money. Its where the fun begins. Most of the corporate world makes its money this way and pays their staff slow time money. While they make $100,000 in a single afternoon, they pay their staff an hourly wage. There is nothing unfair about this, but it is important to note that solution money has no time component. Solution money is made by creating solutions to peoples problems.

Author: Martin Thomas

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Can’t make money in a mint?

January 27th, 2008 by monies

Its troubles could continue following the publication of its annual report, which has been criticised by the Conservatives and which fails to provide goals for its financial performance for the current financial year. This omission is likely to lead to further speculation on the real state of one of the few public sector businesses.

Profits fell from nearly pounds 6.3m in 1998-99 to a mere pounds 668,000 last year. As a result the company only managed an average rate of return of 0.5 per cent on net assets. The Treasury targeted 14.6 per cent.

This year’s target has yet to be announced, and the Treasury says it is currently under discussion. It denies that the absence of a target at the moment has anything to do with last year’s fall in profits.

“The annual report needed to be got out, and it couldn’t hold on for a decision about the net asset target,” said a spokesman for the Treasury. “Obviously, though, we are reviewing procedures, particularly in the areas where slippage occurred last year, as it is important that the target is realistic.”

The Royal Mint defends its performance, saying it has just gone through “one of the most difficult periods in recent history”. This “difficult period” was the result of massive investment in new plant and machinery and changes in working patterns. Adaptation to these changes took longer than expected, which the Royal Mint claims had a knock-on effect on productivity.

“We anticipated difficulties but we did not anticipate the full impact the changes would have,” said Roger Holmes, deputy master and controller of the Royal Mint. “Over the long term, the Mint is a very solid business, and it will recover, but we don’t know how long a full recovery will take.”

David Heathcoat-Amory, the shadow Treasury Secretary, is sceptical about the Royal Mint’s defence and critical of the annual report as a whole.

“This is a pretty unhelpful report that fails to fully explain the difficulties the Royal Mint has encountered,” said Mr Heathcoat- Amory.

“I wonder if the decline is partly due to money being wasted on preparing for the euro. Nothing is mentioned about this or whether any of the lost business is a permanent loss.

“I am also concerned that the changes introduced have been blamed for the fall in profits in order to disguise a management failing, and therefore think it recommendable that the Treasury Select Committee investigate the matter.”

Mr Holmes firmly denies there has been any hidden expenditure on the euro. He states that the Royal Mint has invested in a supply of euro blank coins for the first wave of monetary union, but this move was for business reasons and was not an indication that the Government is planning for Britain to enter the single currency in the near future.

The Royal Mint is not prepared to make any predictions on how it will perform this year, but history shows that the circulation market is quite volatile and that profits can vary considerably from year to year.

Author: CLARE FRANCIS

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MAKE YOUR MONEY LAST A LIFETIME

January 26th, 2008 by monies

Retirement is all about managing transitions. From work to leisure. From less time to more time with your spouse. One of the most important transitions you’ll make when you’re finally ready to call it a career is shifting your attention from putting money away to turning your savings into an income that will support you the rest of your life. That will mark a huge change. At that point, your standard of living will no longer depend on your earning power and become entirely an issue of how well you manage your money. Are you ready for that? It’s a whole new set of challenges. While you’re working, you have time to rebound from setbacks, and you can compensate for mistakes by funneling more money from your paycheck into savings. Once you’re retired, there’s less time to recover from investment losses. And it’s not as if you can ask for a do-over should you run through your savings too soon.

So it’s no surprise that the most common question I get from retirees or people nearing retirement who read my Long View column in MONEY and my Ask the Expert column on CNNMoney.com goes something like this: “How can I turn the money I have sitting in 401(k)s, IRAs and the like into regular spending cash for retirement-and how do I do this so that I don’t outlive my savings?”

There’s no one-size-fits-all answer to that question. Nor are there any guarantees. Life and the investment markets are too uncertain for that. But if you follow the four-step strategy below, you can be sure you’re doing all you reasonably can to generate the income you’ll need to enjoy retirement.

1. Figure out what’s Coming in. The trick during your working years is to live within your paycheck. When you retire, the goal is to match your spending to the income you’ll get from your savings and other retirement resources. So the first thing to do is figure out how much cash you can expect to flow in each month. Start with Social Security. If you haven’t already begun receiving benefits, you can estimate the size of the monthly Social Security check you’ll get by clicking on the Calculate Your Benefits link at ssa.gov and entering the date you’ll be retiring.

Next, move on to pension income. If you’ve worked for an employer that still offers a traditional check-a-month pension plan, your HR department can tell you how large a payment you’re eligible for and when you can start drawing it.

It’s likely, however, that your Social Security and pension, if any, won’t provide enough income for you to maintain anything close to your pre-retirement lifestyle. To bridge the gap, you’ll have to turn to the savings you’ve socked away in 401(k)s, IRAs and other accounts.

That can require a delicate balancing act. You want to draw enough from your investments to live well. But you don’t want to pull out so much that you deplete your savings and jeopardize your security later on.

Most people, especially men, overestimate what a safe withdrawal rate is, giving answers of 10% or more in surveys. That’s way too high. If you want to be reasonably sure your money will last at least 30 years, you should withdraw no more than 4% to 5% of the value of your investments the first year of retirement. You then increase this amount annually for inflation to keep your purchasing power in line with rising prices.

So if you have savings of, say, $1 million, you might withdraw $40,000 the first year of retirement. If inflation were running at 3% a year, you would increase that amount to $41,200 the next year, $42,400 the next and so on.

That withdrawal rate may seem stingy, but remember: If all goes well, you’re going to be spending a longtime in retirement. A 65-year-old man has about a 50% chance of living to 85 and an 11% shot at making it to 95. The odds are even higher for women. So plan as if your savings will have to support you into your early to mid-nineties, or even longer if your family has a history of people approaching or cracking the century mark.

That said, you needn’t be a slave to the 4% rule. You could take that extra vacation or treat yourself to other splurges in years when the market is on a roll and then pare back your spending in bad times. You’ve got to follow through on this, though, in the down years. If you don’t, the combination of investment losses and withdrawals could put such a big dent in your portfolio that it won’t recover, and you could run out of money before you run out of time.

2. Look for ways to boost your income. If the money you’ll get each year lets you afford the retirement you’ve always wanted, great. Live the dream. Should you find yourself coming up short, however, there are several things you can do about it.

Author: Updegrave, Walter

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PROFESSIONAL INVESTOR: Save the world – and make money

January 26th, 2008 by monies

The Invesco Perpetual UK Smaller Companies Fund and the Invesco English & International Trust, which I run, are exposed to the renewable energy market through a collection of companies, from producers of biodiesel to developers of fuel cell technologies.

The Government has set a target of 10 per cent of electricity having to come from renewable sources by 2010, rising to 20 per cent by 2020. Undoubtedly, this will fuel rapid growth in a developing sector.
Many companies utilise existing technologies to harness natural energy sources, and many more are in the process of developing exciting new technologies to extract this energy more efficiently. Ocean Power Technology is a company in which we have invested. It implements wave power technologies, using an ocean-going buoy to capture and convert wave energy. The company has signed agreements to develop wave power stations off the coasts of France, Spain and the US.

As with other renewable energies, wave power benefits from the predictability of its source and its availability close to many of the world’s most populated areas. It also has favourable environmental advantages, as it produces no noise, is not unsightly, and poses no threat to marine life.

Increasing concerns over global warming and the decline of traditional mineral fuel supplies are also driving the growth of biofuels as substitutes for petrol and diesel. Biodiesel is a biodegradable, environment-friendly fuel which can be used in existing diesel engines without modification or blended with petroleum diesel

We have invested in D1 Oils, which is establishing plantations of Jatropha curcas trees, the seeds of which can be used to produce a sustainable, low-cost biodiesel. D1 Oils recently signed an agreement to cultivate a plantation in Saudi Arabia, and operates widely in Africa and Asia.

We have also invested in companies involved with the development and manufacture of fuel cells. Voller Energy manufactures portable fuel cell systems for use as battery-chargers and mobile generators.

Fuel cells are electrochemical devices that produce electricity and heat from fuel and oxygen. Unlike a conventional engine, a fuel cell does this without burning the fuel and can be cleaner, quieter and more efficient.

Elsewhere, we have invested in companies that are involved in the collection and trading of carbon credits. Emission trading schemes have been developed to help meet commitments agreed under the Kyoto Protocol. Organisations that are unable to meet their emissions obligations can purchase carbon credits from more energy-efficient companies with surplus emissions.

The price of carbon emissions is certainly strong at the moment and, consequently, companies that are involved with the trading of carbon credits are performing well.

We have invested in Agcert, which collects carbon credits by reducing greenhouse gas emissions through the operation of methane- capturing systems on huge livestock farms in South America.

Over the past few months, we have been able to find many attractive investment opportunities in the renewable energy sector. However, most of these companies are small and emerging ” which makes it difficult for large company funds to invest.

Andy Crossley manages the Invesco Perpetual UK Smaller Companies Growth.

Sean O’Grady is away.

Author: Andy Crossley

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Money: Building societies can make mistakes too

Why money makes the world go round

MONEY: Make life nicer with a cash ISA

Making money and/or creating wealth

Money: Make big savings on travel insurance

Group to help Maryland doctors make more money

The Quickest Way To Make Money On Earth

Can’t make money in a mint?

MAKE YOUR MONEY LAST A LIFETIME

PROFESSIONAL INVESTOR: Save the world – and make money