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A Guide to Sustainable Investing



More and more investors are supporting sustainable companies and green initiatives by moving their money into eco-friendly stocks and banks. However, even if you aren’t familiar with sustainable investing — even if you don’t know much about investing at all — this guide will teach you how to invest and manage your money in a sustainable way while growing your wealth in the process.

Sustainable investing is growing in popularity in no small part because of the public’s increased awareness of our collective impact on the environment. Investors are also beginning to consider the effects of climate change and environmental damage, and what roles they themselves play by holding stock in companies that pollute the environment or release large amounts of carbon dioxide.

Even just a few years ago, sustainable and socially responsible investing were viewed as “activist” approaches to wealth management. Sustainable investors claimed their portfolios were more than just an attempt to make a statement, but most experts still believed such practices wouldn’t provide as favorable a return as a standard portfolio.

Today, that’s changing. At least $26 trillion is now invested in socially responsible and sustainable ways, and socially responsible investing (SRI) assets have been growing at nearly 40% year-over-year since 2016, according to CNBC. There are now more sustainable funds than ever, and experts are beginning to realize that investors can benefit just as much, if not more, from sustainable investing.

Investing Sustainably

Sustainable investing  isn’t new, but the fact that more and more investors consider it a viable option for building wealth is a relatively new phenomenon. Still, some people have their doubts. Cathy Curtis, CFP®, a member of CNBC’s Digital Financial Advisor Council, recently pointed out that some clients are still reluctant to look at sustainable investing because of its perceived financial impact: “Eighty percent of the time, the person will say, ‘Yes, I’m interested as long as my return doesn’t get affected by it.’ There’s this persistent myth that you can’t get as good returns with investing for impact.”

This perception is based on the belief that only a few companies can truly be considered “sustainable.” If this were true, it would mean investors would have a much harder time diversifying their portfolios and reducing risk. Thankfully, there is more space in the market than ever for sustainable investors. “Now, there [are enough sustainable] funds where you can build a diversified portfolio,” says Curtis. “There [are] funds represented in every asset class now.”

Some investors pick and choose which sustainable companies they wish to invest in. However, many investors are more interested in sustainable funds. Sustainable money-market funds may be attractive to active investors, while passive investors typically gravitate toward sustainable index funds, mutual funds or exchange-traded funds (ETFs) as a means of generating wealth in the long term.

According to a 2018 report by Morningstar on the sustainable fund landscape in the U.S., sustainable funds performed better than the rest of the overall fund space in 2018. The report found that the returns of 63% of sustainable funds ranked in the top half of their respective categories, up from 54% in 2017.

Introducing eco-friendly investing

Generally, sustainable investing refers to environmental, social and governance (ESG) investing. But a sub-set of ESG — eco-friendly investing — is the process of directing investment capital toward companies that seek to combat or minimize the effects of climate change and environmental destruction. ESG investors may also choose to invest in companies which have a track record of corporate responsibility in addition to sustainability. They can also favor companies that have a corporate culture that supports the well-being of their employees and the communities they serve.

The benefits of eco-friendly investing

When more capital is directed toward sustainable companies, it incentivizes those companies, and others, to lean into sustainability initiatives. In turn, companies who wish to remain competitive are forced to analyze their operations and supply chains to identify inefficiencies, waste and the regulatory compliance infractions among their vendors.

For the investor, eco-friendly investing is a way to get peace of mind. If you’re fully invested in sustainable companies, you don’t have to worry that your wealth is working to benefit any companies that are actively destroying the environment or exploiting lax regulations in other countries. Eco-friendly investing also gives you the opportunity to foster innovation at companies that have green initiatives and rely on sustainable energy.

Of course, it’s only recently that experts have taken a second look at eco-friendly investing and realized one of the most important benefits: the opportunity to build a profitable portfolio.

On the company level, there are clear returns for sustainability. For example, according to an article in the Harvard Business Review, companies can experience an average internal rate of return of 27% to 80% on low-carbon investments. For today’s investors, “eco-friendly” and “sustainable” are more than just buzzwords. Almost 90% of fund managers consider sustainable investing “more than just a fad,” according to The Economist. Meanwhile, American sustainable funds have been shown to match or outperform the market, as reported by Morningstar.

Sustainable investment criteria

There are three pillars to a sustainable investment, as established by investment research firm MSCI.

  • Environment
  • Social
  • Governance

Further, each pillar includes multiple associated themes that companies must address if they wish to meet MSCI’s ESG criteria:

  • Climate Change
  • Natural Resources
  • Pollution & Waste
  • Environmental Opportunities

Within each theme are key issues, which you can explore in the chart below.

The Environmental pillar includes 4 themes:

Companies that directly address and excel in the themes and issues in this hierarchy can be considered sustainable investments.

Sustainable-01 How to invest sustainably

Just as there are multiple ways to manage a traditional portfolio, there are multiple ways to invest sustainably. You can either take a hands-on approach by investing in sustainable funds and specific companies by yourself, or you can take a hands-off approach by relying on an advisor or robo-advisor.

If you’re new to investing, it may be in your best interest to work with an expert like a financial advisor or at least do some research into best practices before beginning on your own. Generally, investing requires you to allocate some of your money with the expectation of receiving more money later on, known as a “return.” In the financial markets, this typically involves committing your money to a financial asset like a stock or a bond.

Investing is not without risk. It is possible to lose some of, if not all of your investment once its committed. But there are strategies and best practices for lowering risk which can increase your chances of a positive return. Diversification is one such strategy, which we’ll discuss later in this guide.

Hands-on Investing

Keep in mind that “hands-on” doesn’t necessarily mean “active” portfolio management, day trading or ongoing buying and selling. Actively managed funds rarely beat the market. According to research conducted by Standard & Poor’s in 2017, 92.2% of large-cap funds lagged behind a simple S&P 500 index fund over the previous 15 years while mid-cap and small-cap funds lagged by 95.4% and 93.2%, respectively. Day traders are typically professionals or self-employed individuals who manage portfolios for a living. If you’re new to investing, it’s usually in your best interest to avoid day trading, at least for now.

For our purposes, “hands-on” refers to investing without a financial advisor or Certified Financial Planner (CFP) to either advise you or manage your portfolio for you.

If you choose to do it on your own, you should be aware of the many Eco-Smart Index Funds available. These are indices that track the stocks of sustainable companies — specifically those that meet the MSCI ESG Criteria. Put simply, an index is simply a measurement of a specific section of the stock market.

You can use The Sustainable Responsible and Impact Mutual Fund and ETF Chart to get a comprehensive list of sustainable and socially responsible mutual funds and ETFs. In the meantime, here are just a few examples:

  • (CRBN) iShares MSCI ACWI Low Carbon Target ETF. This fund invests at least 90% of its assets in the component securities of global companies with lower than average carbon footprints.
  • (DSI) iShares MSCI KLD 400 Social ETF. This fund tracks the investment results of the MSCI KLD 400 Social Index, which is composed of U.S. companies that have positive environmental, social and governance characteristics. It invests at least 89% of its assets in the securities of the underlying index.
  • (ICLN) iShares Global Green Energy ETF. This is a global renewable energy index fund with a strong dividend. It gives investors exposure to companies around the world that produce energy from solar, wind and other renewable sources.
  • (PBW) Invesco WilderHill Clean Energy ETF. This fund is based on the WilderHill Clean Energy Index, investing at least 90% of its assets in stocks of companies that advance clean-energy and conservation efforts.
  • (PORTX) Trillium Portfolio 21 Global Equity Fund. This fund invests primarily in companies that are leaders in environmental risk and opportunity management. The fund only includes reasonably priced stocks that have above-average growth potential.
  • (QCLN) First Trust NASDAQ Clean Edge Green Energy Index Fund. The objective of this fund is to make investments that correspond with to the price and yield of the NASDAQ® Clean Edge® Green Energy Index (CELS).
  • (SMOG) VanEck Vectors Low Carbon Energy ETF. This fund seeks to replicate the price and yield performance of the Ardour Global Alternative Energy Extra-Liquid Index (AGIXL), tracking the overall performance of low-carbon-energy companies and alternative-energy companies.
  • (SPYX) SPDR® S&P® 500 Fossil Fuel Reserves Free ETF. This fund eliminates companies from the S&P® 500 that own fossil-fuel reserves.
  • (SUSA) iShares MSCI ESG Select ETF. This investment tracks the investment results of the MSCI USA Extended ESG Select Index, which is composed of companies that have positive environmental, social and governance characteristics.
  • (TICRX) TIAA-CREF Social Choice Equity Fund. This fund seeks to provide investors with a favorable long-term total return that reflects the investment performance of the overall U.S. stock market, but it gives special consideration to certain ESG criteria.

Hands-off investing

If you choose to work with an advisor, you have two options. You could go with a traditional financial advisor, such as a certified financial planner (CFP), or you could use a robo-advisor.

When searching for a traditional advisor, pay special attention to advisors who specialize in sustainable investing. While most advisors will be able to guide you toward more sustainable investments, those who specialize in this strategy will have more experience building profitable portfolios. As always, search for advisors with reputable credentials.

A “robo-advisor” is simply a class of financial advisor that provides advice or investment management services online with little to no human interaction. Many robo-advisors rely on computer algorithms and advanced software to build and manage investment portfolios. Whereas traditional portfolio management services typically require high balances, robo-advisors usually have low requirements or no requirement at all.

Some examples include:

  • Aspiration.In addition to electronic banking services, Aspiration provides sustainable individual retirement accounts (IRAs) and professionally managed funds that are 100% fossil-fuel-free.
  • Earthfolio. This robo-advisor provides exposure to online ESG portfolios.
  • Impact Labs. Impact Labs allows you to choose which causes matter to you, and then it algorithmically builds a personalized index of companies optimized for your preferences as well as for return.
  • Motif. Motif provides a wide variety of algorithmically driven investment products, including ESG products.
  • Newday. Newday lets you build a portfolio in minutes that includes companies which are leaders in environmental and social policies. There are no minimums to get started.
  • Sustainfolio. Sustainfolio is a technology-based investment platform that enables clients to integrate sustainability into their portfolios digitally.

If you’re a new investor, you may wish to go with a traditional advisor so they can teach you about investing best practices. However, robo-advisors can be good option if you want to avoid high minimum-investment requirements, avoid advisor fees or  invest a small amount of money passively from the comfort of your home.

Portfolio Diversifying your portfolio

In the simplest terms, diversifying your investment portfolio means investing in a variety of financial assets as a means of risk management. This is perhaps the oldest and must reliable form of risk management in the investing community.

If you have many different types of assets, there is less chance that your portfolio will shrink because of a downturn in a specific industry or sector. Instead, you can ride out those downturns without worrying about losing your entire investment, then allow your investments to grow over time.

Naturally, just because you want to invest sustainably, you shouldn’t include any unnecessary risk in your portfolio. Diversifying your portfolio should still be standard practice if you want to earn the highest return for the lowest risk.

The real question is: How much of your portfolio should you invest in sustainable choices? According to experts, there are now enough sustainable choices on the market to build a diversified portfolio. Jon Hale, Ph.D., CFA and Head of Sustainability Research at Morningstar even said, “There’s really no evidence out there that this is an underperforming way to invest.”

If you want to build a sustainable, diversified portfolio, just follow the usual best practices of diversification:

  • Invest in more than one type of asset, including bonds, shares and commodities, etc.
  • Invest in several different securities within each asset, such as multiple bonds from different issuers.
  • Invest in assets with different lifetimes and cycles to reduce the impact of negative market conditions.
  • Combine asset classes that have low correlations. In other words, choose a mix of assets which don’t move up or down together to reduce risk.

For example, you could build a portfolio that contains nothing but stocks in alternative energy companies, but your entire portfolio would be subject to market forces in that specific sector. There are plenty of other companies in different sectors, as well as other asset types, that meet the ESG criteria or are considered sustainable.

Divesting from unsustainable assets

If you truly want to build a sustainable investment portfolio, you should consider divesting from fossil-fuel stocks and other assets that are tied to polluting organizations. Divesting is simply the act the removing or reducing the amount of wealth (capital) you’ve allocated to those financial assets. While divesting alone won’t topple the fossil-fuel industry, it can have a significant impact.

Our current economy is based on the extraction, consumption and exploitation of natural resources, which is no longer sustainable. Divesting from companies that don’t engage in sustainable practices removes some of their capital (albeit a small amount), incentivizing them to move toward more sustainable practices.

Divesting has become popular as other sustainability programs and initiatives, many of which attempt to change consumer buying habits, have not been shown to make much of an impact.

Portfolio How to identify “green-washing”

“Green-washing” occurs when an organization falsely conveys to consumers that they favor environmental sustainability when they, in fact, do not. An obvious example might be a trucking company that adds an environment-themed wrapping to their trucks but doesn’t make any sustainable investments in their infrastructure. If you see one of their trucks on the road, you may assume they have an environmental initiative, but it may just be for show.

Another example is when companies brag about a green initiative that is merely the result of what the law requires. Complying with environmental regulations is required by law. Doing so does not constitute “going green.”

The easiest way to avoid companies that “green-wash” is to study investment possibilities before investing. Most ESG assets are marked as such by at least one index, and there is plenty of information online about specific companies and their sustainability practices.

Investing Banking Sustainably

If you are looking to make a “cash investment,” you should consider how you bank and who you bank with. Most banks still operate in a similar fashion to the banks of old. However, more and more banks are beginning to re-examine their environmental impact, both at the branch and at the organizational level.

What’s more, there are now many banks that don’t have a physical presence. Online banking is becoming more popular and fewer people are entering bank branches. Your choice as a sustainable bank customer is whether you want to go with a traditional bank that uses sustainable practices or an online bank that has almost no physical presence.

Sustainable traditional banks

In the traditional banking sector, you should look for banks that take a two-pronged approach to sustainability:

  • They pursue sustainability through environmental initiatives at the branch level.
  • They integrate sustainability into their core business operations.

A traditional bank can’t be considered sustainable simply because it has a recycling program. Instead, it should choose to draw most if not all of its energy from renewable sources, build more energy-efficient branches and do business only with sustainable vendors in their supply chains.

Furthermore, a traditional bank should include sustainability in its core mission. This means incorporating sustainability into the development of their products (including investment products) and in their lending practices. For example, they could lend a certain percentage of business loans to businesses that provide environmental benefits.

Sustainable online banks

Because online banks lack a physical presence and rely on fewer paper statements (if any), they are naturally more sustainable than traditional banks. And just like traditional banks, many online banks offer savings products like traditional savings accounts, money-market accounts and CDs.

By going all-digital, you can reduce your own carbon footprint and provide a sustainable bank with more business. You should also consider sustainable online banks that have their own environmental initiatives, such as environmental lending practices and sustainable investment products.


Sustainable investing is no longer just a fad. It is now a viable investment strategy that allows you to build a diversified, lower-risk portfolio that has a good chance of providing returns. Thanks to sustainable investors and sustainable banking initiatives, more and more organizations will be vying for sustainability accreditation. If the sustainable investing trend continues, it could have a lasting impact on the world of finance, as well as on industries around the world.

The post A Guide to Sustainable Investing appeared first on The Simple Dollar.

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5 Legal Documents You Need During a Pandemic



As Americans grapple with how to stay physically and financially healthy during the COVID-19 pandemic, it’s critical to make sure you and your family have the right emergency documents. It’s much easier to prepare for a potential disaster than to recover from one that blind-sides you. After a tragedy occurs, it may be too late to make critical decisions.

Let’s talk about the different emergency documents and why you may need to create or update existing paperwork. If you get COVID-19 or have another unexpected illness or accident, these documents will help you manage your finances and make essential decisions with more clarity and less stress.   

5 emergency and legal documents to have during a pandemic

Instead of being caught off guard during a difficult time, consider if you should have these five legal documents.

1. Last will and testament

The purpose of a will is to communicate your final wishes after you die. Too many people don’t have one of these incredibly important documents because they mistakenly believe it’s something just for old rich people.

The fact is, every adult should have a will. If you die without one, the courts decide what happens to your possessions, not your family.

The fact is, every adult should have a will. If you die without one, the courts decide what happens to your possessions, not your family.

And once you have a will, don’t forget to update it periodically to make sure it addresses all your wishes, assets, and beneficiaries. Critical life events—such as getting married, divorced, having a child, or losing a spouse or partner—should trigger you to update your will.

If you’re starting from scratch, make an inventory of your assets—like bank accounts, investments, real estate, vehicles, expensive belongings, and sentimental possessions—and decide what you want to happen to them. You can list beneficiaries for specific items, like who gets a piece of heirloom jewelry or an artwork collection. You can also create distribution percentages, such as 50 percent of the value of your assets go to your partner and 50 percent to your only child.

In addition to dealing with your possessions, a will allows you to name a guardian for your minor children.

In addition to dealing with your possessions, a will allows you to name a guardian for your minor children. And don’t forget to leave instructions for what you want to happen to your pets, digital assets, intellectual property, and business assets. You can create a plan for your funeral, such as where you want to be buried and whether you want your organs donated.

Someone must carry out…

Keep reading on Quick and Dirty Tips

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Car Rental sends me an invoice after a settled charge dispute



TLDR; Made non-refundable car reservation before pandemic. Cancelled vacation plans after pandemic announced. Filed a charge dispute and won. Received an invoice from the car rental company for the disputed amount one month later.

Location: USA

Before the pandemic hit, I had made a 5-day car rental reservation (prepayment, non-refundable) in early 2020 for a May 17, 2020 vacation. On April 6, I request a refund due to the coronavirus situation impacting my travel plans. They replied saying there is nothing they can do currently and told me to email again within 30 days of the pickup date. In May, the destination where I was to pick up the car required a mandatory 14-day quarantine for all visitors to the state. I could not accommodate for this unexpected additional 14 days so I cancelled my vacation plans altogether. I decided to request a refund again on April 23 due to the unforeseen circumstances as my trip would be severely impacted by the extra 14 days.

The car rental company agreed to issue a partial refund ($100) and the remainder as a one-year voucher (less than $200). I received the partial refund the next day on April 24 but not the voucher. I followed up with an email on April 27 and May 2 with no response. I assumed they were not going to follow through so I decided to dispute the charge with my credit card company for the remainder amount on May 5 (12 days before the pickup date). Later that same day, I received an email from the car rental company with the voucher. Given the situation I had my doubts that I'll even be able to use the voucher by its one-year expiration date due to the ongoing pandemic, but whatever. Anyways, I figured they sent me the voucher before they had knowledge that I filed a charge dispute, so I assumed they'd either cancel/invalidate the voucher once they found out or they'd dispute the chargeback and win. Either outcome would've been fine with me at the time.

Despite this, my credit card company awards the dispute in my favor and closes the case on June 10. With this decision, I automatically assumed that the voucher would've been cancelled/invalidated (I actually don't know whether the voucher is still valid or not). Today I received a notice from the car rental company dated June 24 stating I have an invoice due on my account in the amount of the voucher (less than $200).

So now I have a few questions:

  1. I don't mind paying the invoice but I'd rather not if I don't have to. How legal is it for them to send me an invoice after the investigation and case was already decided? Why wouldn't the car rental company just have disputed the chargeback in the first place during the open investigation from May 5 – June 10? Why send me an invoice after the fact? If they'd had disputed the chargeback, they would've won the case, no?
  2. Since I was awarded the dispute, can I just have the car rental company cancel the voucher and waive the invoice? I don't have any intentions of using the voucher by its May 2021 expiration anyway.
  3. When I originally made the reservation (prior to pandemic), I was expecting a certain product/service. Obviously now that product/service has been negatively impacted by the coronavirus pandemic, I no longer feel like I can get the same product/service. Despite the car rental company's "non-refundable" policy, do I have any consumer rights/protections?
  4. Do I have any other options?

I feel like I went through the proper and necessary channels to find a resolution (but I could be wrong), so I was quite surprised when I received this invoice. Any help or clarification on the situation would be greatly appreciated. Thank you!

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Is it cheaper to buy eggs or raise chickens?



Hello! Today, I have a great article to share about raising backyard chickens for eggs, and how much it will cost you to raise chickens. I have several different family members who raise chickens for eggs, so I am familiar with the topic. When Chris approached me with the guest post idea, I had to say yes because I thought it would be interesting to learn more about the money side of it. Enjoy!

Like many, I didn’t decide to start raising chickens with a spreadsheet in front of me.

I had just returned from visiting my parents’ new retirement project, a hobby farm in northern Vermont that was bustling with chickens and ducks and all sorts of wonderful, useful livestock I had never considered keeping for myself until that moment.

After all, I grew up in the suburbs, full of cats, dogs, and the snake the “weird kid” in middle school loved to talk about, and the only “livestock” were the cows that were shipped in every summer to picturesquely dot the fields behind the local ice cream place – carefully kept too far away from customers to smell.

I was thinking about delicious, farm-fresh eggs; endless access to high-quality fertilizer and pest controls; taking control of where my food came from and developing a healthier, organic diet; and of course, just the joys of animal ownership.

Waking up to the delightful chattering of chickens in the yard, getting to hang out with feathery friends on the weekend – spending time with the animals we love can be so intoxicating, you can read more about my story here.

However, starting a chicken coop is an economic venture, even for chicken owners who don’t intend to make a profit off of their eggs.

For a chicken coop to be sustainable, owners have to take into account all of their costs – from starting costs like building a coop and buying chicks, to the regular maintenance costs of feed and supplements, to the unexpected expenses like repairs and vet bills – to figure out how much they’ll need to plan to spend every year on keeping their animals happy and healthy.

Related content: How Elizabeth Reached Financial Independence by 32 And Moved To A Homestead


Here is a picture of my chickens.

Start-Up Costs Of Raising Chickens For Eggs

The costs and logistics of starting your first chicken coop can be daunting, and this is the point where a lot of people who had romantic ideas of homesteading with a few picturesque white chickens beside the red wheelbarrow in the garden give up.

I know I almost quit after I spent more than an hour on the town website, looking for a simple list of the steps I needed to take to keep chickens in my backyard –

  • Was there paperwork?
  • What about noise regulations?
  • Did I need a permit?

-and ended up wading through 100-page food regulations, months’ worth of senior center lunch menus, and Board of Health meeting minutes, only to finally show up to the town hall to ask in person and find out there were no paperwork requirements.

That saved cost on my part, because there were no filing fees in order to get a permit, but every locality is different. And every prospective chicken owner should do their own research on their town or district’s regulations before moving ahead with their planning.

The most obvious start-up cost in chicken keeping is, of course, the cost of the chickens themselves. This can vary, depending on what kind of chickens you get and how old they are.

On paper, the cheapest option might seem to be to buy eggs and hatch them yourself. For common breeds like the Rhode Island Red or Plymouth Rock, hatching eggs can cost less than $5 each. However, you should know that chicken eggs do not have a 100 percent hatch rate – for a shipment of eggs, the hatch rate actually averages around 50 percent.

Additionally, hatching eggs can be difficult, and comes with extra costs, most notably an incubator for the eggs, which usually run about $100, plus all the extra equipment needed to raise chicks, which can be another $100.

On the plus side, as kindergarten classes around the country learn every spring, watching eggs hatch and caring for adorable baby chicks can be one of the most exciting and rewarding experiences in the chicken-keeping world.

In total, starting a flock of five hens from eggs will probably run you about $250.

On the other hand, one of the most common ways to start a flock is to bypass eggs entirely and buy live chicks.

This has several advantages over hatching eggs, including saving incubator costs and having to pay for eggs that ultimately won’t hatch.

As with eggs, chick costs vary depending on the breed, but common breeds average about $5 per chick, unless you want a purebred or particularly exotic bird, in which case each chick can cost up to $100!

However, raising chicks will also require additional costs in purchasing the equipment necessary to replace their mothers – things like a brood box to keep them warm while they grow their feathers and prevent them from running off and a specialized chick feeder, which will need to be replaced with a traditional feeder as they get older.

Most of those expenses will add up to about $100 – although the handier amongst us can try to save costs by building their own brooder box, for example.

There are also still the costs of setting them up to thrive as adults, which we’ll get to in just a minute. Just getting set up for the chicks, though, will come out to about $125.

The other option when starting a flock is to acquire adult chickens – either pullets, young adults around 4-16 weeks old, which run around $25 a bird, or rescue hens, fully grown adults who have been “spent” in the industrial poultry world, but will still produce good eggs regularly enough for backyard purposes.

For folks who really want to bond with their chickens and have them be pets as well as livestock, adults probably aren’t the way to go, as chicks that have bonded with you from the beginning will be much friendlier and more trusting than older birds. The main advantage to starting with pullets is the cost savings, since you’ll only have to outfit them once, with the same coop, feeder, and other supplies that they’ll use their whole lives.


How much does a chicken coop cost?

Coop costs is the big expense many prospective chicken owners worry about the most, and they’re not wrong to do so – it’s going to be your biggest expense!

And it should be, because having a sturdy, healthy place to live is crucial to your birds’ overall health and well-being.

Trying to cut costs on the coop, by going smaller than you need or buying second-hand, will almost always end up costing you more in the long run, either in medical care or replacement costs for sick birds or in finally ponying up for the more expensive coop you should have gotten in the first place.

While local regulations vary, the rule of thumb for coop size is four square feet per bird if they have an attached run or free range, and 10 square feet per bird if they don’t, which is enough space to allow them to be comfortable, exercise, and gives them enough fresh air to prevent respiratory illnesses, assuming the coop is well-ventilated.

For our hypothetical five-bird starter flock, that’s a 20 square foot coop, five feet by four, plus a run.

This is another area where you can cut costs by building your own, and there are lots of do-it-yourself chicken coop guides and blueprints available online. Just make sure the material you’re using is chicken-friendly and non-toxic, as well as being sturdy enough to last through years of chicken poop and bad weather.

For those who aren’t thrilled about their next home carpentry project, ready-made coops or some assembly required coop kits are easy to find and easy to build.

Small wooden coops start at about $160, though some will tell you you’ll have to spend more if you want to get a really high-quality one, while a plastic coop will usually run about $700.

Which one will work better for you and your flock will depend on a number of factors, but both materials have their devotees. Plastic coops are easier to clean and dry much faster, which will be a huge boon to anyone raising chickens in an area with harsh winters.

As a New Englander, this was a big consideration for me when choosing my first coop. I ultimately went with wood, though, because wooden coops come in a much wider variety of designs and are much easier to repair – another consideration in a region prone to nasty blizzards.

As for run costs, here again you can build your own – which usually costs about $1 per meter – or buy a kit for about $150.

You might also be able to roll your run costs into your coop costs by buying one of the many coops with a run attachment included. As for size, you’ll want to plan for approximately 15 square feet per chicken, though this can vary by breed. As an example, bantam chickens usually need less space than their larger cousins, so they’re absolutely an option to look into if you’re strapped for space in your backyard.

A 15 square foot requirement, though, means our starter flock of five will need 75 square feet total, maybe 7.5 by 10 feet, which is only about $11 worth of fencing. All of this brings our coop and run costs anywhere from $171 to $850.

Unfortunately, we aren’t done with start-up costs yet, as we also need to outfit our chicken coop, with things like a feeder, a waterer, perches, and nesting boxes. Luckily, our five-hen flock will only need one feeder and one waterer, though costs can vary widely depending on what kind you decide is best for your flock.

Owners planning for bigger flocks should aim to have one feeder and one waterer for every eight birds. Waterers can be plastic or metal, with metal being the more durable but also more expensive option of the two. Depending on material and size, a waterer will usually run between $6-$30.   

For feeders, chicken owners have more choices. A wall-mounted feeder can cost as little as $3, and hanging feeders are only slightly more expensive at $7. Trough feeders, which are ideal for chicks and smaller bantam birds, average $15, so whichever one you go with, it’s unlikely your feeder cost will break the bank.

Nesting boxes and perches are also relatively inexpensive; many will often come with the coop. If your coop doesn’t come with nesting boxes, you can get your own for about $10 a pop for the most basic model, which is likely all you need. You’ll want to plan for one nesting box for every three hens. The cost for perches, on the other hand, is essentially just the cost of a 2×4 and a handful of nails at your local hardware store – probably about $5. You’ll want a long enough perch for each of your hens to get about 10 inches of space.

So, when all is said and done, where does that leave the total cost for setting up a flock of five hens?

  • $125-250 for chickens and the equipment to raise them to adulthood
  • $171-850 for a coop and a run
  • $34-70 to outfit the coop

For a grand total of between $330 and $1,170. Ouch.


Maintenance Costs Of Raising Chickens For Eggs

Of course, we’re just getting started on our expenses.

Now that you have your chickens, you still need to buy feed, supplements, bedding, and other crucial supplies for your birds. These are recurring expenses, so what seem like small savings on one bag of feed or bale of hay will add up in the long run.

For feed, there’s no need to get caught up in the many, many different types of feed you might see on the shelves – for the most part, your small backyard flock of layers will only need a basic layer feed once they reach adulthood, which usually runs about $15-25 per 50 pound bag.

A good starter rate is to feed six ounces of feed per chicken per day, which means that 50-pound bag will last our hypothetical five hens a little less than a month. Those raising their flocks from eggs or chicks will have to feed them on starter feed or starter crumbles to make sure they get enough protein and don’t overdose on calcium, transitioning to layer feed at around 18 weeks old.

Chickens also need several supplements in their diets, the most important of these being calcium carbonate and insoluble grit. Calcium carbonate helps laying chickens get the calcium they need to put strong, healthy shells on their eggs; it can be introduced to their diet through ground up oyster shells, which usually cost about $3 for a month’s supply. Insoluble grit helps the birds digest their food, basically serving the same purpose as teeth do for people, and costs about $15 a bag.

Free range chickens will need less grit than their confined counterparts, because they pick it up while foraging, but they should still have grit available to them to supplement that.

Another potential maintenance cost is bedding. Here again, chicken owners have a lot of different options, including some that can be basically free, like wood shavings or shredded newspapers. The classic straw is also an option, as are hemp and sand. All of these beddings have their potential upsides and downsides, and chicken owners may have to experiment a bit before they find an option that makes both their chickens and their bottom lines happy. A good number to expect for your bedding costs would be about $5 a month.

Other chicken maintenance costs are harder to quantify – how much they’ll add to your water and electricity bills, for example, or time and labor costs.

You might also run up against unexpected one-time expenses, like vet bills or repairs to your coop or your run. These things can be difficult to plan for, so make sure to keep a cushion in your chicken budget so you can comfortably cover any surprises that might come up.

Based on these numbers, though, our hypothetical starter flock of five hens will cost about $45 a month in maintenance and upkeep, for a yearly total of about $516.


Are backyard chickens worth it?

Of course, keeping chickens isn’t all about the bottom line.

It’s almost impossible to put a monetary value on most of the benefits we reap from our feathery friends, including the joys of their company and the myriad mental and physical health benefits of keeping a backyard barnyard.

For my part, watching my five-year-old niece absolutely glow when she finally got a hen to hop into her lap after months of trying was worth, conservatively, about $1 million in oyster shells and layer feed.

And many others have written more eloquently than I about the joys and sorrows of chicken keeping.

Suffice it to say that a single number cannot possibly sum up all the costs and benefits of chicken keeping.

For those obsessed with the numbers, though, we can come up with a rough per-egg cost of keeping hens. Your average hen produces about 200 eggs per year, though, again, this varies widely by breed and also depends on the health and age of your chickens. That means our five-hen flock will produce about 1000 eggs per year, for a first-year cost of between 84 cents and $1.69 per egg.

Every year after that, though, will yield a per egg cost of about 52 cents. I don’t know about you, but I think it’s worth it. 

Author bio: Chris Lesley has been Raising Chickens for over 20 years and today keeps 11 chickens. She can remember being a young child when her grandad first taught her how to hold and care for chickens. She also holds a certificate in Animal Behavior and Welfare and are interested in backyard chicken health and care. Her work has been shared on HuffPost, Mother Nature Network, Community Chickens, Mother Earth News and many more outlets. You can find Chris at Chickens and More.

Are you interested in raising backyard chickens for eggs? Have you ever thought about the money side of it all?

The post Is it cheaper to buy eggs or raise chickens? appeared first on Making Sense Of Cents.

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