Comments on: Reader Mailbag #36 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/ Simple, applicable personal finance advice for the modern world Wed, 10 Mar 2010 02:44:08 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Lynne http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-420510 Lynne Mon, 17 Nov 2008 02:08:31 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-420510 Regarding the election, the 'mandate' was based on no real knowledge of the candidate. But that's okay, I guess it's time to give full-blown Socialism a try. Regarding the election, the ‘mandate’ was based on no real knowledge of the candidate. But that’s okay, I guess it’s time to give full-blown Socialism a try.

]]> By: Tiffany @ Snapshots of Life http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-415330 Tiffany @ Snapshots of Life Wed, 12 Nov 2008 20:09:03 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-415330 I have recently started looking into couponing. My question is this. I have always shopped at discount stores (WalMart, Sams, etc.) and bought generic brands to save money. Do coupons really save that much money over doing that since you typically have to go to the more expensive stores to get the deals that are advertised (double coupons) and buy brand name things? Thanks! I have recently started looking into couponing. My question is this. I have always shopped at discount stores (WalMart, Sams, etc.) and bought generic brands to save money. Do coupons really save that much money over doing that since you typically have to go to the more expensive stores to get the deals that are advertised (double coupons) and buy brand name things? Thanks!

]]> By: Artemidoros http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-415136 Artemidoros Wed, 12 Nov 2008 17:03:16 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-415136 Thanks for the answer! Thanks for the answer!

]]> By: Michael http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-415070 Michael Wed, 12 Nov 2008 14:50:55 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-415070 IL and CT charge $250/year for an LLC. IL and CT charge $250/year for an LLC.

]]> By: prodgod http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-415065 prodgod Wed, 12 Nov 2008 14:40:26 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-415065 Thanks, Lauren and Kevin. Here in California it's $800 a year to incorporate. And that's $800 EVERY year. Thanks, Lauren and Kevin. Here in California it’s $800 a year to incorporate. And that’s $800 EVERY year.

]]> By: Stephanie http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-414702 Stephanie Wed, 12 Nov 2008 03:20:58 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-414702 The Economist is pricey at over $100/year, but you can sometimes use frequent flyer miles for it. Delta offers it and charges 3,200 miles. If you could get a $500 flight for 25,000 miles (and I think that's rare), then a $100 magazine for 3,200 is a pretty good use of miles. It's an even better deal if you don't fly often enough to get your miles balance up to that 25,000 range! And now you have something to read on your next flight! The Economist is pricey at over $100/year, but you can sometimes use frequent flyer miles for it. Delta offers it and charges 3,200 miles. If you could get a $500 flight for 25,000 miles (and I think that’s rare), then a $100 magazine for 3,200 is a pretty good use of miles. It’s an even better deal if you don’t fly often enough to get your miles balance up to that 25,000 range! And now you have something to read on your next flight!

]]> By: Bekki http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-414507 Bekki Tue, 11 Nov 2008 18:58:47 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-414507 I have a question that I've been struggling with lately. My husband and I are the not-so-proud owners of a mountain of debt - roughly 70% of our annual income. Two years ago, we started a business, and our income more than doubled. Most of that extra income has been going towards paying off the debt (which used to be much, much more). Currently, we pay very little rent for our apartment, but we need to move sometime next summer, as we're expecting a baby in March. Moving into a place big enough will cost us about twice what we pay right now - about $2000/month. After paying our current rent, living expenses and debt payments, we have about 25% of our monthly income left over. I'm torn between hurling all that money towards paying off debt, or saving to buy a small house next year. With the recent downturn in the markets, there are a few houses that are in a price range affordable for middle-class families (we live in a very expensive area of NY). My question is this: If we could get a mortgage payment lower than what we would pay for rent, is it better to save the money for a downpayment on a house, or are we better off knocking down a lot more debt before we take on such a huge financial commitment? I have a question that I’ve been struggling with lately.

My husband and I are the not-so-proud owners of a mountain of debt – roughly 70% of our annual income.

Two years ago, we started a business, and our income more than doubled. Most of that extra income has been going towards paying off the debt (which used to be much, much more).

Currently, we pay very little rent for our apartment, but we need to move sometime next summer, as we’re expecting a baby in March. Moving into a place big enough will cost us about twice what we pay right now – about $2000/month.

After paying our current rent, living expenses and debt payments, we have about 25% of our monthly income left over.

I’m torn between hurling all that money towards paying off debt, or saving to buy a small house next year. With the recent downturn in the markets, there are a few houses that are in a price range affordable for middle-class families (we live in a very expensive area of NY).

My question is this: If we could get a mortgage payment lower than what we would pay for rent, is it better to save the money for a downpayment on a house, or are we better off knocking down a lot more debt before we take on such a huge financial commitment?

]]> By: Christine http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-414498 Christine Tue, 11 Nov 2008 18:24:56 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-414498 I have a 20-year-old grandson who just got a good-paying job. He is considering returning to college, but isn't attending right now. I see him being a bit extravagant with his new earnings. But I still think he wants to be more financially responsible. Can you recommend an easy-to-read book that would appeal to a 20-year-old male that could help him manage his finances? Thanks! I have a 20-year-old grandson who just got a good-paying job. He is considering returning to college, but isn’t attending right now. I see him being a bit extravagant with his new earnings. But I still think he wants to be more financially responsible. Can you recommend an easy-to-read book that would appeal to a 20-year-old male that could help him manage his finances? Thanks!

]]> By: Kevin http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-414470 Kevin Tue, 11 Nov 2008 16:35:25 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-414470 prodgod - actually an LLC and a sole proprietorship are different entities, legally speaking. Therefore if someone sues your LLC, if it is set up correctly and funds are not co-mingled, they cannot successfully come after you personally. And the fees are not that steep depending on what state you're in. I'm in Missouri and I think it's about $150 to register, no annual fees after that. Come tax time it is a disregarded entity (single member LLC) and taxed on the individual's return. If your LLC has two or more members it is treated as a partnership for tax purposes. prodgod – actually an LLC and a sole proprietorship are different entities, legally speaking. Therefore if someone sues your LLC, if it is set up correctly and funds are not co-mingled, they cannot successfully come after you personally. And the fees are not that steep depending on what state you’re in. I’m in Missouri and I think it’s about $150 to register, no annual fees after that.

Come tax time it is a disregarded entity (single member LLC) and taxed on the individual’s return. If your LLC has two or more members it is treated as a partnership for tax purposes.

]]> By: kanthi http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-414454 kanthi Tue, 11 Nov 2008 16:01:41 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-414454 Hello there, I have been following the articles for a few days now and I am glad I found this site. I do have a strange question that I always knew the answer (NO) but am afraid to say so. Well here's my issue. I am from a typical indian family, brought up with nothing but basic necessities. My education was almost free for the most part. My parents have always worked hard but never ever planned anything. I mean, they worked hard but never really enjoyed the fruits because they did it the wrong way. A typical example: My dad started his job with 2K a month. He clearly knew he could not afford a house, but still thought he would get a raise every year so he will be fine. We actaully spent 400K on the house when we had just 50K with us.We were just in 8th grade then not smart enough to give him advice. After 8 years his pay increased to 12K a month. He kept re-financing on the house and eventually the debt increased 4 fold.We grew up and for graduate studies we needed money. He took other personnel loans and gave us. We did well in studies, not out of interest, but only because, we wanted to help my dad out of his troubles by getting good grades. We (me and my brother) always met his expectations. Its been 13 years now. I have a decent job. Make enough money to help my dad out of all his troubles. When I firs got my job I promised my parents I would clear their debts upto the last penny, re-build the house (now its not good for them so...), clear all my student loans and buy them a car. And thats it, not a penny more. I promised them I will build my own career, life, house, everything on my own. So that we are not mutually obligued to one another. I have cleared their debts, re-build the house. I am two months away from clearing my student loan. 8 months away from buying them car. So in 10-12 months from today I will be debt free. The whole thing cost me around 2 years of my pay cheques. Everything is fine so far. Now my mom wants me to buy a house for myself in the next year ( I live in US in an apartment with friends, not married yet). They clearly know its not possible. But stil they think its a wise investment for the long term. I want to make them happy, but I really don't want to screw myself just for the sake of it. Based on my 26 years of experince with my parents, this is what I observed. They plan the 2nd step thinking that they will be done with the 1st step in no time. But they get so deep into trouble that they sacrifice all their life's happiness just to cover their mistakes. I do not want to repeat the same. But the thing is I try not to repeat it, but there are some weak moments where I do exactly what they did(may be because of the genes). I want to save my money, invest for my future. House is the last thing on my mind. I will get married in the next couple of years, so I do want to have solid cash with me. I always believe in the cash is king policy. Call me crazy but I have always seen my parents in debt, So I am tired of being in the -ves. I am soo waiting for the day I can be in above 0(debt free). How do I communicate it to my parents(they are old fashioned and they think they are always smarter than me). Hoping for a nice advice thanks bunty Hello there,
I have been following the articles for a few days now and I am glad I found this site. I do have a strange question that I always knew the answer (NO) but am afraid to say so. Well here’s my issue.

I am from a typical indian family, brought up with nothing but basic necessities. My education was almost free for the most part. My parents have always worked hard but never ever planned anything. I mean, they worked hard but never really enjoyed the fruits because they did it the wrong way.

A typical example: My dad started his job with 2K a month. He clearly knew he could not afford a house, but still thought he would get a raise every year so he will be fine. We actaully spent 400K on the house when we had just 50K with us.We were just in 8th grade then not smart enough to give him advice. After 8 years his pay increased to 12K a month. He kept re-financing on the house and eventually the debt increased 4 fold.We grew up and for graduate studies we needed money. He took other personnel loans and gave us. We did well in studies, not out of interest, but only because, we wanted to help my dad out of his troubles by getting good grades. We (me and my brother) always met his expectations. Its been 13 years now. I have a decent job. Make enough money to help my dad out of all his troubles.
When I firs got my job I promised my parents I would clear their debts upto the last penny, re-build the house (now its not good for them so…), clear all my student loans and buy them a car. And thats it, not a penny more. I promised them I will build my own career, life, house, everything on my own. So that we are not mutually obligued to one another. I have cleared their debts, re-build the house. I am two months away from clearing my student loan. 8 months away from buying them car. So in 10-12 months from today I will be debt free. The whole thing cost me around 2 years of my pay cheques.

Everything is fine so far. Now my mom wants me to buy a house for myself in the next year ( I live in US in an apartment with friends, not married yet). They clearly know its not possible. But stil they think its a wise investment for the long term.
I want to make them happy, but I really don’t want to screw myself just for the sake of it. Based on my 26 years of experince with my parents, this is what I observed. They plan the 2nd step thinking that they will be done with the 1st step in no time. But they get so deep into trouble that they sacrifice all their life’s happiness just to cover their mistakes.

I do not want to repeat the same. But the thing is I try not to repeat it, but there are some weak moments where I do exactly what they did(may be because of the genes).

I want to save my money, invest for my future. House is the last thing on my mind. I will get married in the next couple of years, so I do want to have solid cash with me. I always believe in the cash is king policy. Call me crazy but I have always seen my parents in debt, So I am tired of being in the -ves. I am soo waiting for the day I can be in above 0(debt free).

How do I communicate it to my parents(they are old fashioned and they think they are always smarter than me).

Hoping for a nice advice

thanks
bunty

]]> By: John http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-414245 John Tue, 11 Nov 2008 05:09:23 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-414245 @Lauren: Used is always the better way from a costs perspective. The minute you drive it out of the showroom the car falls like 10-20% in value. In the first years especially the price drop is so huge that I cannot imagine that weighing up to savings on maintenance in the first year(s) @Lauren:
Used is always the better way from a costs perspective. The minute you drive it out of the showroom the car falls like 10-20% in value. In the first years especially the price drop is so huge that I cannot imagine that weighing up to savings on maintenance in the first year(s)

]]> By: Lauren http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-414229 Lauren Tue, 11 Nov 2008 04:01:41 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-414229 @prodgod If you actually spend the time and money to establish as an LLC, AND do it properly, then piercing the corporate veil becomes a lot more difficult. If however you try and use the LLC as a way to shield yourself from liability and don't do certain things that are generally performed regarding your business structure and the like, then yea you could very possibly lose a lawsuit. @prodgod
If you actually spend the time and money to establish as an LLC, AND do it properly, then piercing the corporate veil becomes a lot more difficult. If however you try and use the LLC as a way to shield yourself from liability and don’t do certain things that are generally performed regarding your business structure and the like, then yea you could very possibly lose a lawsuit.

]]> By: Charles http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-414224 Charles Tue, 11 Nov 2008 03:35:55 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-414224 Of course we have to give Mr. Obama a chance to try to fix the economy. However if he does what he promised, which he said was his economic plan, it is a recipe for disaster. You cannot tax your way out of recession, a proven fact. Also, increasing taxes on producers and lowering on non-producers is not going to be a stimulus to growth, rather to moving funds offshore or to protect them from taxes. Producers create jobs as they spend on investing, expanding their businesses which employ more people, and spending on more than just necessities. As compassionate as it sounds to give tax cuts who don't pay taxes or don't make a monetary contribution to the GDP, will do little because it will be spent on debts, necessities, or perhaps moderate luxuries. Obama’s promise of a 95% tax cut for working families is nothing more than an illusion. - The Wall Street Journal http://www.fastcompany.com/big-idea/obama-s-promise-95-tax-working-families-nothing-more-illusion?page=2 Of course we have to give Mr. Obama a chance to try to fix the economy. However if he does what he promised, which he said was his economic plan, it is a recipe for disaster. You cannot tax your way out of recession, a proven fact. Also, increasing taxes on producers and lowering on non-producers is not going to be a stimulus to growth, rather to moving funds offshore or to protect them from taxes. Producers create jobs as they spend on investing, expanding their businesses which employ more people, and spending on more than just necessities. As compassionate as it sounds to give tax cuts who don’t pay taxes or don’t make a monetary contribution to the GDP, will do little because it will be spent on debts, necessities, or perhaps moderate luxuries.
Obama’s promise of a 95% tax cut for working families is nothing more than an illusion. – The Wall Street Journal
http://www.fastcompany.com/big-idea/obama-s-promise-95-tax-working-families-nothing-more-illusion?page=2

]]> By: ontguy http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-414222 ontguy Tue, 11 Nov 2008 03:24:27 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-414222 What games do you usually play with your wife during the kid's nap time? What games do you usually play with your wife during the kid’s nap time?

]]> By: over the cubicle wall http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-414114 over the cubicle wall Tue, 11 Nov 2008 00:56:44 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-414114 My take on buying new cars - you'll get a better deal paying cash. If you go for their 0% for 36 months, they will get you on the front end. Best to negotiate the price that you want, then pull out the checkbook when they send you back to the finance department. My take on buying new cars – you’ll get a better deal paying cash. If you go for their 0% for 36 months, they will get you on the front end. Best to negotiate the price that you want, then pull out the checkbook when they send you back to the finance department.

]]> By: Lauren http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-414005 Lauren Mon, 10 Nov 2008 22:36:00 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-414005 Question - my 13 yr old car is starting to rack up bills (I put $600 into it two months ago, it's currently in to fix a $500 fuel leak, and of course the mechanic found $3000 of other stuff wrong), so I was thinking about breaking down and getting a new car. I always assumed I would get a used car, but due to the economy there are a lot of great deals going on (0% apr for 36 months at nissan, for example). My husband and I make nearly 100k per year, we have no debts outside of student loans, we have excellent job security, and I have impeccable credit. Is buying new worth it in this case (I'm looking at a fairly modest sedan), or is used always the better way? Question – my 13 yr old car is starting to rack up bills (I put $600 into it two months ago, it’s currently in to fix a $500 fuel leak, and of course the mechanic found $3000 of other stuff wrong), so I was thinking about breaking down and getting a new car. I always assumed I would get a used car, but due to the economy there are a lot of great deals going on (0% apr for 36 months at nissan, for example). My husband and I make nearly 100k per year, we have no debts outside of student loans, we have excellent job security, and I have impeccable credit. Is buying new worth it in this case (I’m looking at a fairly modest sedan), or is used always the better way?

]]> By: Claire http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-413930 Claire Mon, 10 Nov 2008 21:23:07 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-413930 @Nate Congress.org and Megavote.com are a couple of good ways to find out how your congressmen (and women) are voting on the issues, without any spin or bias. Also, The Week is a good conglomeration of political articles, but kind of pricey at $50 per year. But worth it! Claire @Nate
Congress.org and Megavote.com
are a couple of good ways to find out how your congressmen (and women) are voting on the issues, without any spin or bias.
Also, The Week is a good conglomeration of political articles, but kind of pricey at $50 per year. But worth it!
Claire

]]> By: B. Watts http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-413927 B. Watts Mon, 10 Nov 2008 21:17:33 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-413927 Since I will be giving Wii games to grandchildren (girl age 15, and boy age 12-1/2) I wonder what "purchased at Circuit City type store" you would recommend as the children in question have yet to give me a list and I want to accomplish this purchase before the stores run out? Since I will be giving Wii games to grandchildren (girl age 15, and boy age 12-1/2) I wonder what “purchased at Circuit City type store” you would recommend as the children in question have yet to give me a list and I want to accomplish this purchase before the stores run out?

]]> By: prodgod http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-413926 prodgod Mon, 10 Nov 2008 21:15:53 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-413926 @Asav: My understanding of the difference between a sole-proprietor vs. LLC is the hefty annual incorporation fee to the Secretary of State. When you're a one-person operation, you ARE the corporation, which makes the corporate veil pretty easy to pierce in the event of any liability issues, so why waste the money and incur the extra hassle at tax time? @Asav: My understanding of the difference between a sole-proprietor vs. LLC is the hefty annual incorporation fee to the Secretary of State. When you’re a one-person operation, you ARE the corporation, which makes the corporate veil pretty easy to pierce in the event of any liability issues, so why waste the money and incur the extra hassle at tax time?

]]> By: Nate http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/comment-page-1/#comment-413925 Nate Mon, 10 Nov 2008 21:13:48 +0000 http://www.thesimpledollar.com/2008/11/10/reader-mailbag-36/#comment-413925 Trent, along the same lines as the Economy question. How does someone learn more about politics? Trent, along the same lines as the Economy question. How does someone learn more about politics?

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