Take Your Water Bottle With You When You Leave Your Car

By James B. LaValle, RPh, MS, ND, CCN

You know that water bottle you carry with you everywhere? Or the bottles you use to feed your baby? If they’re plastic, they could be making you or your baby very sick. Fortunately, there’s one easy step you can take to protect yourself and your loved ones from the “toxic” effects of plastic.

The bottles you use may contain bisphenol A (BPA), an “endocrine disrupter” used to add strength to clear plastics. BPA can mimic, mask, or interfere with the effects of the body’s natural hormones. It’s been linked to prostate and breast cancer, and to neurological disorders in children.

The growing body of evidence was sufficient for the U.S. government to issue a warning: “the possibility that bisphenol A may alter human development cannot be dismissed.” The Canadian government went further, listing BPA as a toxic substance, and banning the use of polycarbonate baby bottles. Children are exceptionally vulnerable to BPA because they are still growing and developing, but adults are also at risk.

But there’s one simple thing you can do right now to safeguard your family’s health. Researchers at the University of Cincinnati found high temperatures from exposure to boiling water produced a 40-fold increase in the rate of BPA release, regardless of the bottle’s age.

So don’t heat that plastic. Microwave your beverages and food in glass or ceramic dishes. Never heat plastic baby bottles, and wash your plastic containers by hand to avoid the high temperatures in your dishwasher.

And take that water bottle with you when you leave your car in the hot sun.

Barbells, Ladders, and Avoiding Bondage  

By Andrew M. Gordon

“About the time we can make the ends meet, somebody moves the ends.” 
  - Herbert Hoover

Investing right now – when the economy is so shaky – may sound mighty risky. In fact, your main concern is probably not how much money you can make … but how well you can keep your existing money safe. There’s nothing wrong with that. It’s in unpredictable times like these that an old Wall Street adage applies: It’s not the return ON your investment but the return OF your investment that should be foremost in your mind.

If your primary concern is to protect your money, there’s really only one place to go. U.S. government bonds. They may be boring. They may give underwhelming returns. But they’re safe. And they have the full backing of the U.S. government. And that still means something.

The biggest challenge in buying bonds?  Locking in an attractive interest rate. When you buy a government bond, you’re loaning the government money. The longer the government keeps your money, the higher the interest rate it needs to offer you.

If you were negotiating for that interest rate, you’d say something like, “If you want my money for two years, you’ll need to pay me 1.8 percent. But if you want it for 10 years, you’ll have to pay me 3.5 percent.”

That is what actually happens, except the government gets the message not from words but from the actions of millions of people buying and selling government bonds every day.

The risk you’re taking with government bonds isn’t that they’ll go bad. It’s that inflation will eat away at your earnings. If you’re making 3.5 percent interest on a bond investment but inflation is going up at the rate of 4 percent, for all practical purposes you’re losing money.

That’s not a good way to save, is it?

Consumer prices are climbing at a 4.1 percent clip right now [as of May 2008]. And investors who believe that number badly underestimates the true rate of inflation (as I do), should be starting to do more selling than buying of bonds. (Don’t worry. If you’re interested in buying rather than selling, I’ll show you how in a moment.)

This is the self-regulating mechanism of the market. As investors sell, the price of bonds goes down – just as selling pressure pushes the price of stocks down.

And as bond prices go down, their yields go up. As yields rise and become more attractive, buyers are once again drawn into the bond market.

“Bond interest rates” (not the original yield but the “yield to maturity”) are constantly moving up and down in response to this buying and selling. When you buy a bond, it’s hard to be sure whether the interest rate you’re getting will be better or worse than it will be next year or the year after.  But your interest rate on that bond (the original yield) is locked in as soon as you make the purchase.

However, the price of your bond will fluctuate – as rates move up and down. So you should not put all your eggs in one basket.

Diversifying your bond portfolio is just as important as diversifying your stock portfolio. In addition to diversifying by sector, you also diversify by time.

There are two good ways to do this. You could ladder your bonds. Or you could barbell them. Let’s look at laddering first.

Building a Bond Ladder

Building a bond ladder is easy. The objective is to be in a position to reinvest your bond returns every one or two years.
Let’s say you have $50,000. Through your broker, you could buy a series of five 10-year bonds. The first series matures in 2009. You buy $10,000 worth. The second series matures in 2011. You put down another $10,000. The third matures in 2013, the fourth in 2015, and the fifth in 2017. (This is a  two-year ladder but you can do a one-year  ladder and have  money coming due each year for reinvestment or emergency.)

And what do you do with the money you get when you redeem the bond maturing in 2009? You invest it in a bond maturing in 2019. And so on.

That means when interest rates are going up, you’re in a position to buy. When they’re going down, you’re also buying. For some people, that sounds very safe. For others, it may sound a little crazy.

Why invest in bonds maturing in 2019 if you’re getting a less attractive rate than, say, for 2017? Why not wait? But rates for bonds maturing in 2020, or 2022, or 2025 could continue to head down. You may be waiting a long time for nothing.

And if they reverse and head up? Well, you’ll be in a position to capture those higher rates as you move up the ladder (in years). In 2011, you could reinvest the money from your maturing bonds into bonds that are maturing in 2021. And so on.

Laddering is a very safe way to spread the interest rate risk you get with bonds. And you can do it with decent success with U.S. bonds. But I’d rather have you laddering with bonds issued by certain foreign governments – like Australia. Like U.S. government bonds, they’re government-backed with virtually no chance of defaulting. But many carry a much higher interest rate than U.S. government bonds. Australia’s is about 50 percent higher (300 basis points or three percentage points higher).

The only risk you’re taking is with the foreign exchange rate. You want the other country’s currency to be getting stronger against the U.S. dollar.

Why? Let’s assume you’ve bought $1,000 worth of Australian bonds. Your 6 percent interest should come to $600, right? But it’ll amount to less than that if the dollar gets stronger against the Australian dollar.

You see, your payment has to be converted from Australian to American dollars. If the Australian dollar weakens against the American dollar, it will buy fewer dollars. Say the Australian dollar goes down 10 percent against the U.S. dollar. Your $600 will also drop by 10 percent (or $60) to $540. But that’s still better than the $390 you’d get from a 10-year U.S. government bond. And 10 percent is a huge drop for a currency to take. Usually, the drops are a quarter of a percent or a third of a percent at a time.

That’s why I like foreign government bonds so much. You do better with them even under the worst currency-exchange scenarios. And if a currency is steadily moving against you, you have loads of time to call your broker and ask him to sell the bond.

Barbelling Your Bonds

A simpler way to play interest rate risk is by barbelling. With that same $50,000, instead of splitting it five ways, you’re splitting it in half.

Let’s say you think the yields on 10-year bonds will be going up. (Of course, you can’t be sure.) You invest $25,000 in the 10-year. The other $25,000, you invest in short-term bonds (maturing in, say, 18-36 months). You get stable income on one end and flexibility with the ability to reinvest in higher rates on the other end.

At the end of the 18-36 months, you can revisit the 10-year bonds. If the yields are more to your liking, you invest. If not, you have the option of reinvesting the $25,000 again in short-term bonds, and waiting another year or two to see where the 10-year rates are.

Right now, a lot of people think U.S. 10-year government bond yields will be going up, because these bonds are sensitive to the rate of inflation. And inflation is becoming a more serious threat. But if you have money you’d like to invest in bonds right now and you can’t wait, then barbelling may be a sensible strategy for you.

With risk spreading into unexpected places – like municipal bonds, bond auctions, and even the money market – government bonds are one of the truly safe havens left for investors.

And remember, you can employ these two techniques – laddering and barbelling – just as effectively with overseas bonds as U.S. bonds.

Living Rich: Drawing on Your Inner Resources 

By Judith Strauss

Being totally self-reliant, able to fend for yourself – it’s an appealing idea, one that’s been romanticized in literature and the movies.

Think Robinson Crusoe – Daniel Defoe’s adventure about a man shipwrecked on a desert island for 28 years. And Walden  - Henry David Thoreau’s account of his two-year “experiment” in simple living. And Cast Away – with Tom Hanks as a too-busy executive suddenly marooned for four years after his plane goes down during a business trip.

I’m not the build-a-cabin-with-your-bare-hands, grow-your-own-food, cook-over-a-wood-stove type. Still, I’d like to think I could make do without modern conveniences.

No, wait. I don’t have to think I could do it, I know I can do it.

In 2004, two hurricanes (Frances and Jeanne) scored a direct hit on my hometown. For more than a week after each one, my neighborhood had no electricity, no hot water, and sometimes no water at all. But I was fine.

With the help of a couple of ice chests and a manual can opener, I fed myself and my dog. Cold showers – unpleasant, but you’ve got to do what you’ve got to do. A plug-in phone and a portable radio connected me to the outside world. And a neighbor ran an extension cord between his generator and my computer so I could get my work done.

It was a challenge for people who had young children that needed to be kept busy all day long. I had a different challenge… because there were an awful lot of unexpected hours I had to fill by myself.

Gas stations weren’t pumping gas, and there was debris all over the streets, which made driving anywhere a risky proposition. So I was pretty much stuck in the house. Much to my surprise, I didn’t mind at all.

What would you do if you were stuck in the house for days on end with no electricity? I’m guessing you’d do what I did – things you love to do but never seem to have enough time for.

While it was still light out, I went for walks and visited with neighbors. I sketched. I painted. When it got dark, I read by the light of a Coleman lantern. I did a little writing. And when the electricity finally came back on, it was like coming home after a good vacation. I felt rested and rejuvenated.

Maybe more important, I was inspired to find the time to do more of the things that had been giving me so much pleasure – things that we all know are necessary for leading a well-balanced life… and making life a little richer.

Worth Quoting: Liz Lange, Founder and CEO of Liz Lange Maternity, on Hard Work

"Ten years ago, I came up with the idea for fashionable and fitted maternity clothing. I opened my own one-room shop and did everything: I waited on customers, got them water, packed the FedEx boxes - there were extremely difficult customers who'd go mad if their clothes were a day late. It would just destroy me. The reality is, to get where you want to be in your career, you're going to have to do a lot of stuff you don't think big-shots do."

(Source: Glamour magazine)

It's Fun to Know: Beware the Pink Ice

A French company has created a road surface that turns pink when the air temperature drops to near freezing. Its purpose is to warn drivers of possible icy conditions on roadways. The color of the surface reverts to normal when it warms up.

The technology is still being tweaked to make sure it can stand up to constant traffic and exposure to summer temperatures.

(Source: New Scientist)

Word to the Wise: Lingua Franca

"Lingua franca" (LING-gwuh FRANG-kuh) - from the Italian for "Frankish tongue" - is a medium of communication between people who speak different languages. It was originally a combination of Italian, Spanish, French, Greek, Arabic, and Turkish spoken in eastern Mediterranean ports.

Example (as used by John McWhorter in a New York Times review of The Word of the Lord Is Upon Me by Jonathan Rieder): "It was Martin Luther King who made the black preacher's cadence a lingua franca... ."
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These articles appear courtesy of Early to Rise [Issue #2366, 05-27-08], the Internet's most popular health, wealth, and success e-zine. For a complimentary subscription, visit http://www.earlytorise.com/.