Well, here it is, finally – The Simple Dollar Podcast. This will be a weekly endeavor – I hope you enjoy it!

The first episode of The Simple Dollar Podcast focuses on credit card debt. I tell my own story of escaping from a pile of credit cards and relate some very specific advice on how to extract yourself from such debt. Also discussed: Rocky IV, Douglas Coupland novels, Steve Bartman, Twittering while drinking your third glass of wine, snarky librarians, and Dave Ramsey’s connection to Star Trek. Total length: 12:12

Listen In!

Other options for enjoying The Simple Dollar Podcast include:
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Though I hope you do subscribe using one of the above methods, don’t worry – each episode will be featured in its own post, much like this one, on Tuesday afternoons. The podcast itself may appear earlier than that, however, if you subscribe using one of the above forms, but the notes won’t appear until I post about it here on The Simple Dollar.

Episode Notes
Here are some additional notes that go alongside the comments in the podcast. Approximate times for the corresponding links and notes are listed.

0:00 – The theme song is a public domain recording of a Camper van Beethoven concert on October 25, 1986. Listen to the concert in its entirety.
0:24 – Background reading – my financial biography, particularly the part about our meltdown.
0:50 – The World’s Strongest Man competition is held annually, pitting competitors against each other in a wide variety of feats of strength.
0:58 – I talked about that “sunny April afternoon” in a post called The Longest Night.
1:06 – Rocky IV! Ivan Drago whips Apollo Creed!
2:18 – My public library of choice.
2:39 – Your Money or Your Life is a must-read. Here’s how it really impacted my life.
2:54 – Detailed notes on The Total Money Makeover by Dave Ramsey.
4:14 – And I’m still reading; here’s a peek at that mountain.
4:43 – Which one of these three is the manliest?
5:09 – Here are the only budgeting techniques that ever worked for me.
6:25 – I highly recommend White Oak Vineyards in central Iowa.
6:28 – If they’re sold out of Prairie Rose, blame me.
6:45 – Here’s my Twitter feed … I promise, no more meandering discussions of North by Northwest!
7:17 – Redbox is cheap because there are tons of codes out there for free DVD rentals.
7:31 – PaperBackSwap is the best! But you probably already knew that…
7:49 – The three best novels on modern careers that I’ve yet read were all by Douglas Coupland – Generation X, Microserfs, and JPod.
8:12 – Here’s a startup guide for cooking at home if you have no idea what you’re doing in the kitchen.
8:14 – Restaurants.com can be a good money saver.
9:05 – Here’s a startup guide for your emergency fund.
9:23 – Steve Bartman, oh, Steve Bartman. Relive the moment.
9:44 – Proof that Steve needed a bodyguard.
10:18 – Some details on the debt snowball and a mathematically superior (though psychologically inferior) alternative.
11:29 – Your homework, class!
11:46 – For any of this to work, you have to overcome lying to yourself about money.
12:02 – A preview of next week.

One thing I’d like to do in a future episode is have an audio reader’s mailbag. If you have a microphone on your computer and can record an MP3 of a simple, short question you might have on personal finance, careers, pop culture, or anything else you’d like me to answer, record it as an MP3 and send it to me. Keep the total recording under 15 seconds, please.

Comments and suggestions welcome.

Most of us spend our extra money on things that depreciate quickly in value. We go out for dinner. We buy cars. We buy gadgets. We buy books and CDs and DVDs.

All of these things depreciate in value pretty quickly. We eat dinner out – the food’s gone and it’s often not particularly memorable. Our cars and gadgets depreciate quickly, and our books and CDs and DVDs depreciate even more quickly.

We trade our money for a burst of enjoyment – and then we find ourselves with a bunch of stuff that has little value (and a spare tire).

Recently, I spent a few hours chatting with an old friend who told me he spends most of his discretionary money on his collections. He decorates his office with them and gets a ton of aesthetic appeal from them.

The kicker? Those items can be resold pretty easily, often at a profit.

This actually reminded me of my own experience during the big sell-off. Many of our collections sold for very little – we probably lost an average of 80% on our DVDs from purchase to re-sell. Yet, a few items actually recovered the money I put into them and a few earned even more – a few of my oldest Magic: the Gathering cards and several of my baseball cards actually returned a small profit on the resale, even after I got years of enjoyment out of them.

It’s a win-win – you get the personal enjoyment out of the item, plus if you need the cash later on, you can re-sell the item and at least recoup your initial investment and perhaps turn a small profit.

Inspired by all this, I started asking around, looking for ways that friends and other acquaintances spent their money on items that at least roughly held their value – or actually appreciated in value. Here are six suggestions that really stuck with me – ways that I might consider spending money in the future.

Gold bullion Every week, this guy puts $100 away into his gold fund, and every few months, he buys a pre-1934 U.S. minted gold bullion coin. He has a pretty nice stack of them, and they’re gorgeous. He has four on display in his home (two frames, each showing the front and back), while the rest are in a safe. Quite often, just for the pleasure of it, he’ll go check out his box at the bank, sit in that room, and simply look at the coins with a magnifying glass – and on a few occasions, he’s shown friends. He loves the aesthetic of the coins, plus he knows that after he passes, they’ll be worth quite a bit to his children.

Vintage certified baseball cards Two of my friends collect vintage baseball cards – a hobby I used to be engrossed in. They save their money and buy classic cards – early Topps, Goudy (1930s cards), and tobacco cards – that are certified by PSA (an authentication service that verifies that the items are legit, grades them, and encases them). These items are used for decoration – one guy uses some as decorations in his den, keeping the others in a safe place.

Land A friend of mine bought several acres of totally undeveloped land about 20 miles south of Des Moines. He goes there just to be outdoors – he clears brush, has picnics there, picks some fruit from a few naturally-growing fruit trees, and often just retreats, taking a hammock there and reading books in relative solitude for an afternoon. If he ever gets tired of it, the land retains its value – he can sell it for at least what he paid for it, if not for a nice return.

Vintage certified comics Similar to the vintage baseball cards, one can get vintage comics certified, collect them, and use them for display purposes. A line of framed comic covers can colorfully accent a room, plus give a hint as to the passions and interests in your life. The key, though, is to focus on the truly vintage (nothing recent) and truly collectible (meaning long-standing series or first issues of popular characters).

Energy efficient home improvements One person who lives in northern Iowa spends much of their disposable income improving the energy efficiency of their home. Wind turbines, solar panels, geothermal heating, tankless water heating, and other techniques provide constant sources of spending of disposable income. Each purchase, though, causes one’s energy bill to drop – and eventually to start returning money, if you’re generating more energy than you’re using and can sell it back to the grid. Even better, such purchases increase the resale value of your home, particularly if they’re low maintenance and nonintrusive.

Personal training I was surprised at this suggestion, but the argument in favor of it was compelling. A personal trainer can improve your health, which directly reduces health care expenses. A personal trainer can also improve your appearance, which, like it or not, can improve your career opportunities. One friend that uses a personal trainer says she’s quite happy to give up many other perks in the short term to keep that training – and it’s left her in better shape.

What areas might you spend your discretionary money on (meaning, money primarily used for personal enjoyment) that will retain its value or perhaps earn a return?

Recently, a friend suggested to me that there are two distinct types of careers – and it left me thinking quite a bit about my own career choices.

First, there are stable careers. You’re an hourly employee or a salaried employee with small bonuses (or none). You work hard to try to get ahead, but getting ahead usually just means a 10% raise in a few years or possibly a small promotion. No matter what you do within the course of this career, you will never increase your earnings by an order of magnitude. However, your income is quite stable – and it’s often plenty to live comfortably on.

On the other hand, there are scalable careers. Scalable careers often revolve around self-employment and often offer opportunities for enormous growth in income and prestige. Examples: writers, professional athletes, actors, entrepreneurs, small business owners, and musicians. However, in these careers, there are often just a handful that get the lion’s share of the attention and the earnings, while the others subsist on little – often significantly less than those in stable careers earn – and try to make their way up there.

Which career path are you on?

workers and activists making their point. Photo by Old Sarge.

The Big Choice
Most career advice encourages people to avoid scalable careers and to focus on stable careers – and for good reasons. Stable careers enable you to live a comfortable life. Stable careers have comparatively less risk, too.

Yet, quite often, the big dreams people have are all about scalable careers. When I was very young, I dreamed of being a professional baseball player. Later on, my dream shifted to being a writer. Some of my friends had similar dreams: a sculptor, a painter, a professional golfer, and several more writers.

For those folks, quite often the stable career becomes the choice because it is the safer choice. They’re walking through life without a safety net – if they fall, they can’t just land in the safe arms of a parent or into a strong financial net. Talented people often sit down, do a realistic risk assessment of their life, and conclude that a stable career is the way to go, regardless of their talents or passions.

I found myself in this very position early in my college career. I was drawn to writing – and thus choosing a career in English – but I recognized that there were limited career opportunities down that path. So, I put away training for a scalable career and chose training for a stable career – I majored in computer science and biology, figuring I would find work as a programmer or a research assistant (which I wound up doing).

Scalable Careers as “Side Hustles”
Many people who really dream of a scalable career but settle into a stable career hold onto that dream through a “side hustle” of some sort. They attempt to practice it on the side while spending much of their time working at their stable career.

One friend of mine, Jon, did this quite well. He’s passionate about bluegrass music and plays it all the time on the side, often making a few bucks from small gigs, but his “stable career” is in science.

Another friend, Ron, is a gifted sculptor. His “stable career” is teaching, but he fills his summers with sculpting and plying his trade at art fairs and other venues.

I actually have many friends doing this – one friend does office work and spends the weekends writing. Another friend does system administration and spends the weekends being a DJ.

I did this myself for many years. I spent my weeks working in a research lab. On the weekends, I wrote – short stories, essays, and all kinds of other things. I sent them off and got all sorts of rejections. It took many years of failure before I saw even a bit of success – and it was in an area where I didn’t expect it (personal finance writing).

Why this compromise? To put it simply, it lets people follow the scalable career they’re passionate about on their own terms while still earning a stable income. As I said above, many, many talented people do not have the financial safety net to give a scalable career a try.

Musician. Photo by fiat luxe.

Starting Your Scalable Career on the Side
The way it really worked for me – and for many of the people I mentioned above – is that I just viewed my “scalable career” as a time-consuming hobby. Quite simply, I really enjoyed doing it, so I just took it on as a hobby.

To many people, writing short stories, sending them off, and getting rejection letters doesn’t sound like a popping good time on a weekend. Yet, inside almost all of us, there is some sort of windmill we’d love to chase with our inner Don Quixote. We might never conquer that imaginary giant, but the journey to get there seems like a lot of fun to us – though it might seem a fool’s errand to others.

My suggestion is simple: whatever that dream is that you have, don’t let it go. Instead, spend your free time practicing it in the way you want to. If you already have a stable income, don’t worry about what sells and what doesn’t – just do it. Practice deliberately. Have fun doing it. Don’t worry about the end product – just have fun with the process and try new things.

In other words, treat that hobby as you might treat a scalable career if you didn’t have to worry about the income at all. It actually frees you to experiment, since income is merely an unexpected bonus. Try new things, practice the details, and enjoy what you’re doing.

What happens next? You get better. You produce interesting things. And people begin to pay attention. It might take years – it might never happen – but does it really matter? You’re enjoying the process.

Eventually, things might click and opportunities fall in place and you can ride the rocket ship of a scalable career on the bloom. But, if it never happens, you’ll have fun anyway.

Encouraging Young People
A final thought: I’m a parent. Will I encourage my own children to try a stable career or a scalable career?

For me, it depends greatly on the child. If they have an obvious talent – one that’s recognized by others, not just by me as a proud parent – and they want to ride that talent and see what happens, I’ll encourage them to do just that.

However, most of us don’t have that sort of awe-inspiring talent right out of the chute. Millions of kids grow up playing basketball in the driveway, but very, very few are LeBron James. That doesn’t mean, of course, that we can’t grow that talent through practice and passion over the long haul. After all, Michael Jordan was cut from his eighth grade basketball team.

So, my plan is this: instead of pushing them towards a career, I’d rather push them towards discovering their passions and cultivating their talents. My dream is not to send my kids to an Ivy League school at age eighteen. Instead, I’d rather have a child knowing where his or her talents lie and how he or she might utilize them. In the end, all I want for them is that they’re self-sustaining, self-reliant, and happy – and if they find that in a scalable career or in a stable career, I don’t care at all what it is. Your life isn’t over if you don’t get into Yale, after all.

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

As usual, we’ll start things off with a few links to older articles that directly answer questions I’ve heard recently. Several readers have asked about our decisions with regards to child care, something I’ve written about extensively in the past (because it was a very challenging issue for us to work through). Beyond these articles, I will likely write an update soon.
Daycare: Personal, Family, and Financial Responsibilities in Balance
Should I Send My Child to Daycare or Should One of Us Be A Stay-At-Home Parent?
The Stay At Home Parenting Question Hits Home – Hard
Stay At Home Parenting: Is It Worth It?
Rethinking The Costs Of Child Care – And Considering Some Major Choices

And now, some great reader questions!

Question – I just became the Senator of Finance in an International Honor Society I am a part of. Most members are not too active, but I have a lot of gusto, and I am wanting to do a fund raising event every month, but not overwhelm or bore our chapter. Did you come across any interesting ideas catered towards this kind of thing in college?
- Mol

Find out what people enjoy doing, and create a fundraiser based around that. Have a Guitar Hero tournament. Have a softball tournament or a basketball tournament. Make your fundraiser into something that people would do anyway, except add a bit of organization and a bit of a carrot to it.

Even better, look around the community for sponsors. Ask them to contribute prizes, then plaster that company’s logo all over your promotion for these events. This lets you keep all of the proceeds for your fund raising purposes while giving out interesting prizes.

Remember, a fundraiser isn’t purely about the money. It’s also about raising the reputation of your organization. Doing something fun that gets people in the door is the best way to do that.

I have started a new job which will leave me with quite a bit of extra money to save, spend, invest, whatever. Over the next year I plan on establishing a fairly healthy emergency fund, paying off all of my debt, and still having enough left over to do something with. I’ve contemplated putting the money into my Roth IRA, but I’ve also contemplated using the money for a business venture; I don’t have a solid plan now, nor would I really need one until I have that money to make a decision with anyways, but I was wondering your take on the issue – when would you advise one or the other?
- Dave

If you don’t have a concrete business idea, put the money into your Roth IRA. No matter what happens, the window of opportunity for contributing for retirement is never better than when you’re young.

What about if/when you come up with a great business idea? Develop it a bit. Do the basic research to make sure it would work, and write a business plan. If the idea comes together to that point, then you might have something worth thinking about. Until then, it’s a dream.

Never sacrifice your future for a “maybe” or a “could be.” Keep your eyes open for opportunities, but don’t avoid saving for retirement for it.

Right now we are using a 529 plan to save for college for our 3 kids. Someone told us that we should be saving in a Roth IRA because we could have more flexibility in how the money is invested, getting a better return and we would have more flexibility in using the money, so if our child got a scholarship and didn’t use the money, we could just apply it to retirement, whereas with a 529 it must be used for educational expenses. Our state’s 529 plan isn’t that great, but they offer a matching grant every year that we are eligible for right now, but will not be after this year. And if we move our money, we will lose all the matching funds.

What do you think of this? Is it worth it?
- Michelle

The real question is whether or not you’re adequately saving for retirement elsewhere. Are you saving at least 10% of your income for retirement right now? Do you have poor retirement investment options at work? If these things are true, you’re likely better off just using the Roth IRA for retirement. (Remember, also, that you’re not restricted to using your state’s 529 plan – there are great plans in other states that are open to you, like Iowa’s).

If you’re completely covered for your retirement savings, then a Roth IRA is a potential investment vehicle for your children’s education. It has one disadvantage – if you don’t use it for the education, you can’t touch it until you’re at retirement age (without paying an extra 10% tax penalty beyond what you’d normally have to pay). On the other hand, a “savings plan”-style 529 allows you to access the money for any purpose with no penalty other than the normal taxes.

I think the flexibility of a good 529 plan, plus the need to use a Roth IRA for retirement, makes the 529 a better move for my children’s college education, but your situation may vary.

That said, I think you’re wrong, in that pets CAN be compared to humans. It’s not as black-and-white as you think. If you had to choose between saving the life of your dog, or the life of your child, the choice is obvious. But what if instead of a child, it was an adult stranger? What if it was a convicted murderer? What if it was a cancer victim who only had a few days left to live anyway? Which would you save then?
- Kevin

Here’s the problem whenever you make purely moral comparisons, particularly when comparing one life to another. Different people have different experiences and thus different sets of values. Some people look at pets and value them as much as people, while others do not. Some people think the life of one human (say, their child) ranks above the life of another (say, a stranger), some do not.

There is no absolute answer to questions like this. One can argue until they’re blue in the face about it, and it doesn’t change the simple fact that different people have different values and, for many of those cases, there is no absolute right or wrong.

That’s the reason I usually avoid issues of moral gray areas. There are reasonable, rational people that are on both sides of an issue, and they feel very strongly about their side, believing that they are right and the other person is wrong. No amount of arguing will change it, because the people on each side are coming from a different set of life experiences which have led them to different sets of rights and wrongs.

So, can you compare pets to humans? I see both sides of the coin here. Which one is right? I don’t know. I know how I feel about it, but it really doesn’t (and shouldn’t) impact how you feel about it.

We invite a small group of people over to our house every Tuesday night. The group has grown from 2 people, to 20 people….and counting. I love hospitality and my husband and I decided we wanted to feed them dinner everytime they come over.

With the group being the size that it is, I have started to use paper-plates instead of normal plates to serve up the meal. While in jest, one of the group members commented that paper-plates were environmentally unfriendly, but my rational was that washing 20+ plates would be more of an environmental offence. Afterall, where we live, we’re actually in drought and are on Stage4 water restrictions! What is your stance? Which is the lesser of 2 evils? Which option is more environmentally friendly?
- Daniella

Given the water restrictions and also given that you can recycle paper quite easily, I think paper plates are a reasonable choice in this situation.

To me, this is another example of the “moral absolutism” I mentioned above. What’s a greater impact on the environment – the amount of a tree required to produce a handful of paper plates (and the processes therein) or the amount of water and detergent used to wash twenty plates (and the processes therein)? There’s not going to be an absolute answer to this question.

The real solution is to just be mindful of the environment. If you use paper plates, make sure you recycle them. If you choose to wash the dishes, do it with any water restrictions in mind.

Trent, here’s a question: What do you do in those situations when you go out to eat with a group of colleagues or acquaintances and they decide to divide the bill equally among each participant? I never order the expensive stuff and I don’t drink beer or wine, but often end up paying the price. Any ideas on how to politely get out of it?
- anna

If I’m concerned about this, I just request a separate check early on in the meal. When the waiter comes to take my order, I simply say that I would like my own check. That’s trivial for a waiter to do, and it also pulls you out of splitting any bills.

Of course, if there are appetizers ordered or something else shared, you shouldn’t dig in, since you won’t be sharing the cost of those appetizers. The only way out of that is simply agreeing to contribute to the appetizers – or ordering an appetizer of your own and sharing it freely with others.

I personally think that individual bills at a restaurant is the best policy. Splitting a bill at the table has so many potential ways to cause hurt feelings that it’s just not worth it.

You wrote about how you give your business to ethical businesses and businesses that provide good customer service. I would like to make my purchases at these kinds of businesses, but it seems there is a Walmart at every other intersection. Do you have any suggestions on where to start offering your business when you are looking for these qualities?
- Mol

You have to go by your own experience. I find all the time that some branches of chain businesses have spectacular customer service, while other branches have atrocious service.

You should also factor in the other costs for you. If you have to drive ten miles to go to a department store or a grocery store with better service, it’s probably not worth it for the inexpensive purchases you’ll make there.

For most of my regular needs (like groceries and household items), I simply tried all of the local stores until I found ones I like with good service and reasonable policies and prices (Fareway and Target, namely). For larger purchases, I shop around – I don’t have a “regular” place for those purchases.

Is it worth installing tankless water heater in the house to save money on energy cost?
- Mateen

It depends heavily on your water use. The heavier the use, the less efficient they are. Factors that cause you to use more hot water include more people living in the home, frequent shower and bath use, heavy laundry use, and so on. If you’re single, it’s probably worthwhile – if you’re in a family of five with frequent bathers, it’s not going to help as much.

Here’s why. A tank hot water heater just holds a bunch of heated water in it. As it cools, the heater will kick on to warm it back up – on and off, on and off. Now, if you’re using that hot water frequently (and thus not using much energy to constantly re-heat the same water), they’re almost as efficient as tankless heaters – and they’re much less likely to cause you to run out of hot water. On the other hand, if you’re single and you rarely use much hot water, you’re going to waste a ton of energy just heating and re-heating that same water.

We’ve thought about a tankless heater, but we’ve decided to hold off for the time being until our tank heater starts showing significant problems. We don’t feel the advantage is enough to replace our current heater.

You seem to have upgraded your Nintendo DS Lite to a DSi. How did you do this? Why? Isn’t it a waste of money?
- Thom

Shortly after the new DSi was released, I traded my old Nintendo DS Lite and a small handful of games that I’d played through for it. My old DS Lite was beginning to have some issues with recognizing games when you put them in the slot, so I knew it would have to be replaced before long, anyway. So, the DSi was essentially free – I got rid of a system that was beginning to fail and a handful of games I’d already beaten.

Was it worthwhile? Since I’ve picked it up, most of the time I’ve spent with it has revolved around playing with the cameras on it with my three year old son (taking pictures of him and me, going around the house with it, and so on) and playing Dr. Mario, which was a free download for the system – neither of which I could have done with my old DS Lite. Plus, the screen is a bit larger, which is great for the eyes.

Would I have paid for it? Probably not. I would have just stuck with my old DS until it failed, then spent some time without a DS to see if I actually wanted it.

Do you still keep in touch with your high school friends? I’m about to graduate from high school and many of my family members tell me that most of my friendships will die off slowly over the next few years.
- Eddie

I’m married to one of my old high school friends. Aside from her… not really. I keep in touch with a few of them on a very irregular basis, but that’s about it.

It wasn’t an immediate transition. I kept in close touch with several people for years after college. But, as time went on, it became more and more clear that there was a widening gulf between us. We had fewer and fewer shared experiences to talk about and were often separated by many, many hours.

I think that today’s technologies (like Facebook and Twitter and text messaging) make it much easier to keep those connections alive, but I still tend to think that over time, your experiences will diverge more and more and you’ll have less and less in common, until you find yourself with perhaps just a friend or two from those days.

That’s fine, though. Over the years, I’ve picked up other friends. Life goes on – you grow and change.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.