Customer Reviews: The HIP Investor: Make Bigger Profits by Building a Better World
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on April 21, 2010
The author has developed an approach to investing that is HIP: human impact + profit. Which means that you, as an investor, can make informed decisions, based on defined criteria, about investing in companies that demonstrate social responsibility and MAKE A PROFIT at the same time. There are already funds out there that invest in socially-responsible companies, but they aren't always successful in terms of making money.

This book is a slow read, because it's very dense with a lot of information, facts, figures, and charts. I suggest you take the time to absorb it. You may be surprised at the companies that are named as good ones, like Walmart and Starbucks, which many people like to denigrate. The choice of Toyota, however, may have to be revised for the next edition.

What really strikes me is how positive the author is about investing as a force for good in the world. It's an optimistc message, which seems especially needed now in the present economic climate.

After reading this book, I want to recommend it to everyone I know.
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on January 23, 2013
The HIP Investor presents an innovative and interesting approach to investing by focusing on 5 main "human needs" and evaluating investing opportunities based on their scorecard in those categories. Herman presents a compelling argument regarding the need for investors to step up their game and really think about what they can do individually - from investing in socially responsible companies or funds to making energy efficient improvements in their homes - to positively impact the future of our world. Herman's informative discussions on current companies (though slightly dated now since this book was published in 2010) and their "HIP" scores opens your eyes to the shift from just pure profit-making to making a better product in a greener manner. I would recommend this book to anyone looking to increase their awareness of socially responsible investing.
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on August 28, 2010
R. Paul Herman has written a highly practical book. It is also educational. He has developed a system for scoring the combined profitability and responsibility of a company. This is useful for investors who want to make decisions with conscience and also desire to grow their own security and wealth. What's more, he bridges that gap by making it clear that what helps the social and ecological side of business, are the same things that help businesses financially. The research behind it gives us solid footing and confidence in its methods. HIP stands for Human Impact plus Profit.

Herman identifies five elements for scoring on the human impact side. It starts with the basis of healthy people. Customer satisfaction, employees' satisfaction and retention as well as safety, wellness, safety and health for all stakeholders including community. Herman suggests these as good indicators of the ability to maintain a brand as well as a market. He takes Henry Ford's axiom of, "paying a good wage to workers so they can buy his cars," to the next level. You need a healthy community and workers to be your market. The business is valued and viable when its customers, workers and community can count on it.

The second element is wealth of the system. These are mostly familiar indicators but adding them into be measured as part of a scorecard to good investing is brilliant. Wealth is described as: Employee's future savings and retirement; pay relative to peers in the industry; CEO compensation relative to average staff pay and investment made by the company in the community. The idea here is, that companies need to build wealth for employees and the community as well as themselves and seems to be highly correlated with profitability of the company.

The Earth is a more familiar ground for responsibility efforts. Herman gives us four main driers he believes are good indicators for Earth impacts--the reuse of waste, water efficiency, energy efficiency and greenhouse gas emissions.

Equality is an interesting fouth arena for assessing the HIP company. Herman found correlations between diversity in customer base, Board makeup, employees and supplier mix, with that of financial performance. There has been a lot written on employee diversity and creativity, (also customer because it means you are less trapped in one niche) but having Board diversity is added into this mix is new. It makes sense. It is amazing to see that having a mix of women and ethic groups in the Boardroom makes a difference to profitability as well as ethical decision making. It confirms a lot of intuition.

The fifth arena is Trust. It was added after examining the oil industry more deeply and finding it wanting. Trust metrics include openness to being interviewed, and third party certifications for transparency. The other two indicators of trust are legal actions in which a company becomes embroiled and the degree and nature of their lobbying efforts. High levels of either of the last two categories, relative to revenue, are flags to call for more investigation.

That is the human impact framework on the system. The rest of the book is demonstrating how to build a portfolio that takes all this into account in making investment decisions. HIP Investor making it clear how connected the positive human impact is to higher valuation of the company. Herman gives you sources for how to get the information you need to build a thoughtful portfolio based on his five elements. And to make sure it is understood as very doable, Herman sets up a handful of side by side comparisons of companies: Pepsi and Coke, Proctor and Gamble and Colgate; J. P Chase and Bank of America; Verizon and Sprint; McDonalds and Starbucks; Chevron and ExxonMobil; Microsoft and Apple; Wal-Mart and Target Raytheon and Lockheed Martin; and finally Dow and DuPont. They are compared directly on the five human impact measured as well as the financial measures. You have to read the book to get the answers.

I highly recommend it not only for investors, but also for managers and executives to use in assessing themselves. That is before their investors do it for them. I have a followup Q & A with the author on my blog [...]
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on December 30, 2010
Mr. Herman persuasively illustrates that profitability and social good are NOT mutually exclusive. On the contrary, positive human impact and profit can be synergetic at many levels. The HIP Scorecard "face-offs" in Chapter Seven are especially eye-opening for investors and consumers alike. The HIP Investor is a must read for CEOs, mutual fund managers, and individual investors of all types, novice or expert. Clearly written and easy to read, it should be required reading for all college level students.
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on August 6, 2010
As a recent M.B.A. graduate, The HIP Investor was an insightful supplement to my business school curriculum. This book describes a transformational approach to investing that results in both a better world and financial gain. Herman's methodical analysis highlights characteristics of successful companies and upcoming trends, as well as details the creation of a "HIP Portfolio."

Full of practical suggestions and real world examples, readers of this book will become armed with the knowledge, strategy and tools to reap significant long-term benefits. This book is useful, inspiring and thought provoking - a read from which everyone can benefit.
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on October 6, 2010
Very much enjoyed reading this book which focuses on how to increase profits by focusing on Human Impact (e.g. health, wealth, earth, equality and trust). As someone who teaches business and entrepreneurship at universities in South-East Asia, I would very much recommend this book to both undergraduate and graduate level business students and am also planning to use this book in my course on Social Entrepreneurship.
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on February 24, 2014
The only reason I bought the book was because it was required for a class. Bleh!

Yes, impact investment is an important and useful knowledge area to explore; there are just better sources for it. ( Example: anything by David Chen). The book puts down all other forms of impact investment, relies on anecdotes too heavily to prove its point, gets some basic economic definitions wrong ( that's NOT how you define an externality), and is all about selling their approach and their investment consulting services to you.
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on May 7, 2014
The author has a brilliant handle on how and why socially-minded investing can save the planet and create wealth. Everyone should read or listen to this book. There's another book review that you can access at <ahref="[...]"></a>

Donna Rodgers
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on May 21, 2015
At first it read like a self-promoting book, but after second thoughts, I realized that the approach he was suggesting happened to have the same name as the author's company. That leads to some confusion about whether he's referring to his company's products or the approach he's recommending. That being said, it's truly a futuristic view of how investments should be considered from a holistic perspective. Sustainability has always been a risk; we've never explicitly identified it before, and a huge part of sustainability is how a company's products affect their source. As long as we have humans be a part of business, how that business affects the environment in which we live is a key factor of its sustainability risk.
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