How Climate Change Will Greatly Impact the Global Economy

Recently, Schroders Economics Group released its Climate Change Survey 2016, which supplemented its report on The Impact of Climate Change on the Global Economy. Schroders sent the survey to 18 investment banks and brokerage firms, and received five responses, all of which stated that global warming presents an “Extremely Significant” or “Significant” threat to the global economy in the current century. Several negative effects are expected, most notably inflationary pressures.

Implications for Everyone:

As a result of global warming, prices of several goods and services are expected to increase. Food and water prices will increase due to reduced output per worker, agricultural production, and healthy water supply.

As oceans continue to rise and low lying areas are submerged, reduced land availability and mass migration will increase the cost of land.

Energy costs will increase as more extreme temperatures increase heating and cooling costs.

Insurance costs are already increasing and will continue to rise. Payouts from extreme weather events such as Hurricane Katrina and Superstorm Sandy have hurt companies’ profits and they are reacting accordingly. For example, in Gulf Coast states, flood insurance costs for customers have risen significantly.

Implications for Investors:

Several academic studies provide various estimates of annual losses in GDP in the current century due to global warming. However, most investment analysts do not account for these losses in their forecasting models. One assumption investment analysts make when estimating a company’s performance is that the company will continue operating and growing into perpetuity. Without accounting for the estimated losses in companies’ growth prospects due to climate change, analysts’ current company valuations may be overestimated.

Companies’ equity stock will decrease due to the added costs to repair damage to property and infrastructure. Consequently, equity investors will suffer losses.

Debt investors will suffer due to increased inflation because the purchasing power of fixed coupon payments is reduced as inflation increases.

Moving Forward…What Can We Do?

Shareholders can use their voting power to encourage the Board of Directors to align managers’ compensation with long-term, climate change mitigating goals.

In order to provide more accurate fundamental data for investors, investment analysts must start incorporating the economic effects of climate change into their forecasting models.

Many economists agree that a government policy incorporating a carbon pricing or carbon credit trading model will reduce carbon emissions. These policies properly reallocate external spillover costs back to the companies (i.e. companies pay for the negative environmental and health effects we as individuals incur).

The Bigger Picture

Because analysts view individual companies as “going concerns” that will exist into perpetuity, they are not alarmed when companies make large capital expenditures now, with the expectation that cash returns will exceed the initial up-front cost. Likewise, the earth is a “going concern” and will exist into perpetuity. Therefore, governments can also make large capital expenditures now and expect to receive cash returns in excess of the initial cost.

Alternatively, the future cost of not investing in climate change mitigation may be much higher than the savings today.

Don’t Miss Climate Change Scientist Dr. Katharine Hayhoe in Asheville

Krull and Company is a proud sponsor of “Science, Faith and our Changing Climate, An Evening with Katharine Hayhoe.”

Who is Dr. Katharine Hayhoe?

Katharine Hayhoe, named one of TIME Magazine’s 100 Most Influential People In the World in 2014, will visit Asheville, North Carolina during April 5-6 for a number of events prior to and after her evening talk. These events, co-sponsored and hosted by MountainTrue and the Creation Care Alliance of Western North Carolina, include a day of prayer, a reception, the evening talk, and a breakfast the following morning. For the full schedule, click here.

Dr. Hayhoe is well-known for the clear connection she makes between science and faith on the subject of climate change. Although she is an atmospheric scientist and Director of the Climate Science Center at Texas Tech University, she is able to explain climate change in simple language and well-understood metaphors. As an evangelical Christian, she makes a strong case for why Christians should care about climate change.

She is featured in the Showtime documentary, “Years of Living Dangerously,” and she co-authored A Climate for Change: Global Warming Facts for Faith-Based Decisions with her husband, Evangelical pastor Andrew Farley.

Who should attend?

Dr. Hayhoe’s events, especially the evening talk, are a great fit for students, individuals, organizations, and religious leaders.

Most importantly, if you are a member of a congregation and you want to learn more about environmental stewardship and understand the faith-climate connection, don’t miss this special evening.

Is the event free?

Yes, and it is open to the public.

I don’t understand the term “faith-climate connection.” Can you explain a bit more?

Dr. Hayhoe introduces the idea in the short video below. We think she’s a wonderful speaker because she doesn’t use a lot of jargon or lingo–she is so clear and concise when discussing climate change. This is a great one to watch prior to seeing her talk next week. BONUS: it features polar bears!

Please RSVP here.

Krull & Company Sponsors Asheville’s Terpsicorps Academy

Krull and Company is a proud sponsor of Terpsicorps Dance Academy, a 501(c)3 organization. In summer of 2015, Terpsicorps announced their crowdfunding campaign to raise capital for a new studio which would launch a full academy for all ages and abilities as well as integrate space for their professional dance company.

We believe in supporting those organizations which provide access to the arts as well as learning programs that strengthen and promote healthy bodies. Terpsicorps’ mission aligns with our own in our shared belief that we should create extraordinary experiences and strengthen our local community for the larger, long-term impact.

During the capital campaign, we committed as sponsors for the Terpsicorps Academy lobby. The Academy opened in fall 2015 to a receptive audience of families and dancers.

The new academy space, located in West Asheville, includes three studios, dressing rooms and a lounge/art gallery, as well as new equipment and foundations: sprung floors, mirrors, and sound systems.

This week, we will celebrate with Heather Maloy, Terpsicorps’ Artistic Director, as well as staff and board members at their Founders Party. We are so proud of their achievements and look forward to watching the Academy grow!

History of Terpsicorps
As of June, 2003, Terpsicorps Theatre of Dance became North Carolina’s summertime professional contemporary ballet company. Terpsicorps hires in critically acclaimed dancers from such well respected dance companies as Les Grands Ballets Canadiens, BalletMet, Kansas City Ballet, and Atlanta Ballet. Most dance companies lay off their dancers in the summertime when theater going tends to taper off. This has given the company the opportunity to hire first rate principal dancers for a short period of time and create innovative, theatrical shows.

Academy at Terpsicorps
The Academy at Terpsicorps seeks to provide the world class dance training & education, consistent with the stylistic requirements of Terpsicorps Theatre of Dance Company. Dancers will be provided with a rich knowledge of classical technique and the ability to adapt to all styles and techniques of dance. For more information, visit Terpsicorps website.

Three Big Misconceptions About Retirement Plans for your Business

For small business owners, it’s a great feeling when you’ve grown your company to the point of being able to offer comprehensive benefits, especially a quality retirement plan, to your employees. A retirement plan benefit is also a great  way to attract and keep talented team members. However, identifying and setting up a retirement plan can be daunting and often intimidating, and there is a general feeling among small business owners that there may not be a retirement plan that fits their needs.

There are three widespread misconceptions about retirement plans we hear from business owners:

“My options are limited.”  

There is only one option – most people know “401(k)” and that is all they know. In truth, there are many other retirement plan options for small businesses, many of which are simple and inexpensive to maintain. A good financial advisor can also customize your retirement plan for your specific needs, long term growth goals, and employee opportunities.

“This is going to cost me a lot of money.”

Many entrepreneurs are concerned about potential cost of setting up and maintaining a retirement plans.  They are not free (or cheap), but the vast majority of plans are agreed upon because the tax savings outweigh the cost of plan maintenance. It’s an investment in the long term foundation of your company. When you start to look at retirement plan options, make sure you are understanding the benefits, not just the cost.

“Setting up a retirement is too complex and time-consuming.”  

Are retirement plans complex? At first glance, maybe. There are a lot of numbers and factors to consider when shopping around for plans if you choose to take on that task yourself.

However, in most situations, there will be a retirement plan administrator. They exist to translate plan options, talk numbers, and help you get back to what you enjoy doing the most while still keeping you informed about how your retirement plan is working for you and your employees. A great plan administrator will guide you and answer any questions – that is what you are paying them for.

Even after a little demystifying you may be left wondering, “Where do I start?”

That’s where financial advisors come in. A financial advisor should be to offer guidance, but if they are speaking in jargon and acronyms, it could just be more confusing. Make sure the advisor you’re talking to is willing to slow down, express patience in explaining concepts, and can illustrate exactly how each plan option works.

We are excited to announce we are rolling out a new business retirement plan service, Conscious-k, in collaboration with a TPA (third party administrator). This administrator works with us and you to make sure that you have the best options to consider when shopping for a business retirement plan that makes sense for you.

Ready for a business retirement plan that gives back to your employees and aligns with your values? Check out Conscious-k for more information and to schedule an initial consult.

Know Your Worth

Reading The Millionaire Mind by Dr. Thomas Stanley reminded me of an interesting concept I first learned about several years ago while working in the homeless service field.

One of the main qualities Dr. Stanley found many millionaires possessed was knowing when something was worth their time. Throughout his book, he makes numerous mentions to the anti- “do-it-yourself (DIY)” mentality among the millionaires he interviewed because “they reason that it’s more productive to earn income from their vocation and use it to hire a professional” (Stanley, The Millionaire Mind, p. 284).

I flashed back to a conference I took as a housing counselor. During this conference, I listened to the speaker’s story about class differences. She said, “I was showing a friend from generational wealth my new flooring. Impressed, she asked whom I hired to do it. When I told her I did it myself although I didn’t enjoy it, she said ‘Why would you do that? What are you worth an hour? Now, think about how many hours you spent researching how to do it and purchasing materials in addition to the time spent actually working on the new flooring – likely more than a licensed professional. You also probably spent more on materials than someone who could have ordered supplies in bulk and already had the equipment. On top of that, you didn’t even enjoy it. You could have used those hours to spend time with your family or take a short trip, so that you could recharge and come back even more focused on your vocation.”

Thanks to sites like Pinterest and YouTube where you can figure out how to do just about anything, the DIY movement is on the rise. So, if it brings you joy, go ahead and do it yourself – you should be able to find a video or pin to show you how. And then you can return to your vocation feeling more energized.

But if it doesn’t, stop for a second and think about whether this project is really worth your time. If not, it may be time to call a professional plumber to do some repairs so you can focus on what you love.


Stanley, Dr. Thomas J. “The Economically Productive Household.” The Millionaire Mind. Kansas City: Andrews McMeel, 2000. 283-284. Print.

Important Social Security Changes — Act By April 30th

If you are between ages 66 and 70 and you’re reading this, you need to act now!

Many of you may have seen or heard about recent changes to social security.

There were a number of significant changes approved last year and we want to make sure that you are aware of them.  The simplest way to do this will be by age group. If you are close in age to one of the following groups, we highly recommend you contact your financial advisor to double check your social security benefits.


You will not be affected.  We repeat: if you are currently receiving monthly social security benefits, your benefits will not be affected by the changes.  However, if you have any specific questions, please feel free to reach out to us.


Flashing Neon Sign – ACT NOW.  If you or your spouse is between age 66-70, they you may still be eligible for the benefit strategy that is being phased out (know as “File & Suspend”).  We just had a client call in who was 68 (and their spouse was age 66) and was not receiving benefits.  After discussion, they are scheduled to start benefits now–the deadline is April 30th.

By starting benefits now, his wife will be able to collect a spousal benefit now as well. This allows her personal benefit and his benefit continue to grow.  This strategy will put thousands more in their pocket over their lifetimes.

If you are in this group, the deadline for filing with Social Security is April 30th, 2016.  Please contact us as soon as possible, so we can help you develop and implement the best strategy.  I cannot stress this enough: don’t let the ship sail on your chance for important Social Security benefits if you qualify.


Although File & Suspend will be gone, you may be eligible for Spousal Only benefits. This is a strategy that will let you choose just your spousal benefits (assuming that your spouse is receiving benefits) and therefore maximize your lifetime benefit.

If you are in this group, your deadline is much longer (December 31st, 2019), but when you are close to age 66 it is worth discussing with your advisor.

Navigating Social Security can be a challenge, and we are here to help. If you have any questions, please let us know.  If you, your spouse, or someone you know is between 66-70 and not collecting benefits…ACT NOW!

To summarize:

  • If you are getting benefits now – stay the course.
  • If you are between 66-70 (or almost 66), reach out to your advisor as soon as possible!
  • If you are between 62-66, discuss this issue with your advisor anytime, but specifically when you are approaching sixty-six years old.

Need More Assistance? Contact Us.