Comments on: Reader Mailbag #77

By: Adam

Adam — Mon, 12 Oct 2009 20:30:16 +0000

My wife (fresh out of grad-school) recently accepted a new position and boosted out household income substantially. We’re both in our mid-20′s and have until this point paying for tuition and not saving. It’s now a priority for both of us, but are not sure what type of account will work best for us. I’ve done some research and a Roth IRA appeals to us, but the income limitations, while not an immediate concern, might be in the next few years. If we were to cross the limit what would the repercussions be? I can’t seem to find anything about that scenario. Does it make more sense to start or a traditional IRA in addition to our 401(k)s instead?

By: Jules

Jules — Sat, 29 Aug 2009 00:26:01 +0000

Hi Trent! Question for your reader mailbag. If it’s been addressed in of your 76 posts already I apologize and feel free to point me to it.

What is your process of reviewing books? Do you read the whole book and then do the review? Do you have any advice for writing good book reviews?

By: AReynolds42

AReynolds42 — Fri, 28 Aug 2009 01:58:47 +0000

I recently graduated college and have 2 student loans to pay off:
Loan 1: about $4,000 left on it with a 6.8% rate
Loan 2, Part 1: about $3,000 left with a 6.8% rate
Loan 2, Part 2: about $7,000 with a 4% rate
Loan 2, Part 3: about $6,000 with a 5.3% rate
The kicker on loan 2: I was ‘automatically selected’ to pay off both part 2 and 3 before I can even start paying off part 1 (with the crazy high rate).

I have asked around and done a bit of research on my own. Really the only thing that I keep coming back to is Ramsey’s idea of paying off the smallest loan first, while still making minimum payments on the other loan (so I don’t default). I have already built up an emergency fund and am trying to decide how to tackle these loans that would be the most profitable in the long run.

Any and all advice will be welcomed. Please and thank you in advance!!

By: valletta

valletta — Thu, 27 Aug 2009 03:46:45 +0000

Oh, and back to cast iron.
DO NOT buy cast iron Made In China!
There *may* be lead. Not worth the chance as USA made cast iron is SO affordable.
Lodge Cast Iron is great and cheap. It lasts forever. And you can often find cast iron at garage sales or online at craigslist, freecycle. etc….Also, tell family members! So many people (older relatives?) have multiple cast iron pans sitting in cupboards that they would love to give you!

By: valletta

valletta — Thu, 27 Aug 2009 03:41:41 +0000

#36 Esther Ziol @ 10:19 am August 25th, 2009
I would be obligated to care for parents because of what the Bible says to Christians–if I do not take care of my family (especially a widow), I am worse than an unbeliever.

As an “unbeliever” I forgive you:)
I would (and do) care for my widowed mother because it’s the right thing to do. Christianity, for me, has nothing to do with it, but I respect your faith:)

I know that my husband and I are both going to receive generous inheritances. But….I never count my chickens! Who knows what the future brings? Look at all the people that thought they had money with Bernie Madoff? Who expects their spouse to leave them (divorce, death) later in life?!
Plan for the worst, I always say :)

By: James

James — Wed, 26 Aug 2009 18:53:51 +0000

My employer discontinued 401(k) matching this year due to the recession. So I’m trying to reassess how much to contribute. My initial reaction was to max my Roth, cushion my emergency reserve to six months, and focus on non-retirement accounts since I don’t particularly like my 401(k)’s offerings. But I’m wondering if there’s some way I can predict the tax advantage of putting more money in the so-so 401(k). For example, if my income level is near the border line between brackets, can I up my 401(k) enough to put me in the lower tax bracket. And would it be worth it?

By: mewithoutdebt

mewithoutdebt — Wed, 26 Aug 2009 16:13:02 +0000

#Joel, another reason for getting a credit card is to build a first step of your credit history (assuming you do not have any other credit account).

#Angelo, I use MagicJack to call customer service number etc. It avoids me giving my my cell (my only number) and also wastes my minutes. I agree that I don’t like the spyware feature in it. But it’s just $40 a year.

By: ema002

ema002 — Wed, 26 Aug 2009 13:56:19 +0000

Trent,

How can you make phone calls with Skype on your iPod Touch? I’ve heard you can’t use it on there because it doesn’t have an internal mic. Do you only use the messaging feature on your iPod touch?

By: Josh Moore

Josh Moore — Wed, 26 Aug 2009 12:20:10 +0000

“Simply put, you can’t change the past. It’s water under the bridge. The only moment you control is the now and so worrying about the past doesn’t help.”

I once heard this put as ‘today is the tomorrow you dreamed about yesterday.’

By: laurenly

laurenly — Wed, 26 Aug 2009 05:24:41 +0000

I am a college student, just starting my final year. I was lucky enough to be able to pay for college with scholarships and the help of my parents, so I have absolutely no student debt. I’ve had a checking account for several years, but I have never opened any kind of credit card account as the idea of that much financial room has always intimidated me.

I was wondering what I could be doing to responsibly build my credit/ credit score so that it will be at the optimum point when I look into making significant purchases (house, car) in the future. I am worried about going down the wrong path if I’m not even sure where to start.

By: RU

RU — Tue, 25 Aug 2009 23:54:23 +0000

Hi Trent,I have a question for you. We had a company wide re-structuring and everyone got to know their new job title. would it be an acceptable code of conduct to ask people what their new job title is? (Just to know where we stand in the company).

By: Walter Daniels

Walter Daniels — Tue, 25 Aug 2009 19:15:33 +0000

With regard to leaving assets for heirs, I have a system that I would use. From 16 to 25, I would match their earnings $0.50 for every $1. From 25 to age 31, it would be $1 for every $1. At age 31, I would match their accumulated assets $1 for $1. That would allow them to accumulate their own assets, and be rewarded for doing so.
There would be no “waiting for the Financial rain,” to worry about. :-) They would earn their “inheritances,” not just wait for them. Then, at maybe 50, they would sp;lit whatever was left, of the overall total.

By: Elizabeth

Elizabeth — Tue, 25 Aug 2009 17:30:13 +0000

I like the point that Teflon degrades over time, while cast iron actually improves over time with proper use. I got my favorite skillet at a garage sale for 25 cents. It looked like hell but with a little initial elbow grease and many years of use it has a fantastic finish, more non-stick than some of my mom’s old teflon.

I see rusty cast iron pans at the thrift store all the time — the rust can be scrubbed off and with proper treatment (scrubbed and then “seasoned” with oil and heat as Trent describes, then forever after washed with very little soap and COMPLETELY dried to avoid rust) you could have yourself a great set of cookware that will last literally a lifetime, for very little money.

By: Sydnee

Sydnee — Tue, 25 Aug 2009 16:34:04 +0000

inheritance:

Both my parents died in a matter of 10 months. My mother first naturally. She was the one who handled all the money, my dad was really worried right after she died.
Then he was killed in a auto accident.
I found out he left me over $300,0000. quite a bit of money when I wasn’t expecting anything.
My husband, kids and I spent it badly. I was so grief stricken I wasn’t thinking right.

I would have to say tell the person your leaving money too that you are doing so. So they can have a plan. Because if they love and miss you they will not be thinking right if they find out after you die.

By: Esther Ziol

Esther Ziol — Tue, 25 Aug 2009 16:19:57 +0000

I would be obligated to care for parents because of what the Bible says to Christians–if I do not take care of my family (especially a widow), I am worse than an unbeliever.

By: Barbie

Barbie — Tue, 25 Aug 2009 13:52:37 +0000

My son-in-law has all but given up on his favorite sport, golfing, because of the cost. What is the best place to look for golfing coupons?

By: Shelly

Shelly — Tue, 25 Aug 2009 12:37:51 +0000

An alternative to Teflon, which is far more durable and doesn’t peel, is Autograph. It’s pretty much next-generation Teflon and is available in higher-quality cookware.

I have a set of Anolon Titanium pans with Autograph and love them. They are dishwasher safe and have put up with a ton of abuse without scratching. I don’t really enjoy the concept of seasoning and hand-scrubbing my pans, so this is a great alternative. Non-stick wise, I find it’s far better than any other pan I’ve used.

By: Steven

Steven — Tue, 25 Aug 2009 12:27:25 +0000

When the Security and Exchange Commission fines a business or individual for an infraction or violation of the rules, usually the fine is pretty hefty – sometimes in the millions of dollars. What does the commission do with the fines they receive?

By: Never teh Bride

Never teh Bride — Tue, 25 Aug 2009 12:16:05 +0000

Teflon is cheaper than cast iron? In what universe? I have great cast iron cookware, most of which cost about $10 and will likely last forever!

By: ChrisD

ChrisD — Tue, 25 Aug 2009 12:02:22 +0000

What are your views on leaving an estate for heirs? … but I’ve read some authors who say the goal should be to have a 0 balance

This is tricky. If you are planning to spend all your money and finish your life with 0 then you run the risk of running out if you live for ages or go senile and need expensive care. If you have investments and live off the interest then you will end up with lots left over.
The latter is definitely the better bet (if you can manage it). Trying to finish on 0 is just too risky.
The question then is whether to leave the money to charity or family. If the family is well able to support itself, then I think charity needs the money more. Like Bill Gates, his children will get a mere few millions.