Every Sunday, The Simple Dollar reviews a personal finance book or other book of interest.

The title of this book alone encouraged me to not bother reading it for the longest time. As I’ve expressed before, I have no interest in being rich. I want financial independence, that’s all, and for me that’s not really a mountain of money. In truth, I just want time to do the things that I want to do.

Over the last year, though, six different readers who wrote to me about various personal finance books listed Felix Dennis’s How to Get Rich among the books that most profoundly inspired them to personal finance success. It was often listed right alongside books I deeply respect, like Your Money or Your Life and Getting Things Done.

With that in mind, I decided to give the book a shot, even though the title gave me some serious trepidation. I felt that the entire book would be speaking to a goal that I didn’t have.

I was dead wrong.

“>How to Get Rich is an incredibly poor title for this book. In fact, it’s the worst thing about this book.

“>How to Get Rich is about how to succeed in any endeavor you put your mind to. If you want to be the best community organizer in the world, you won’t get financially rich, but this book will help you get a lot better at it. “>How to Succeed probably wasn’t as catchy of a title as “>How to Get Rich, but it’s a more accurate title.

One | Pole Position
If you have nothing, you have nothing to lose. Thus, people who are just starting out often have the best chance to succeed. They don’t have a carefully curated career to maintain or a pre-existing set of standards to live up to. Instead, they can simply play by their own rules. The best thing you can do if you want to succeed at anything is to not care about losing. And you probably will lose – a lot. The catch is that if you choose your actions as though you’re afraid of losing, you’ll never win. You’ll be mediocre.

Two | A Million to One
Out of the pool of all of us, only a small fraction of people succeed. Quite often, people will look at the pool of successes, compare that to the vast horde of people who will never succeed, and conclude that the odds are against you. One big difference: the pool of people who truly want to succeed is much smaller than that overall pool. The pool of people who want to succeed in your specific area is smaller still. The group of people who have at least some health and at least some intelligence is much smaller still. Before long, the odds of success don’t look as bad. There’s a small number of successful writers and a mountain of people who dream of being a writer. The biggest difference between the two groups is that the people who actually succeed went for it.

Three | Harnessing the Fear of Failure
If you don’t want to fail in a public and catastrophic way, you’ll never succeed. If you care much about what your neighbors think, you’ll never succeed. If you’re unwilling to put in a lot of work, you will never succeed. If you think that “success” is beneath your finely-crafted artistic skills, you will never succeed. If you don’t believe you are good enough to do it, you will never succeed. If you can’t treat the entire quest as a game, you will never succeed. The single biggest thing that prevents people from succeeding is fear of failure.

Four | The Search
What do you want to do with your life? I spent most of my twenties trying to figure that out, as do a lot of people. What I didn’t realize then – and now I see it, clear as day – is that most of the jobs you do during your twenties aren’t there to build the basis for a career. They’re there to keep food on your plate while you spend your real energy figuring out what that one thing that you want to be doing with your life really is.

Five | The Fallacy of the Great Idea
A single “great idea” won’t make you rich. What makes people rich is taking a great idea or two and putting a small mountain of sweat and effort into that idea. I have a great idea for a novel, but I won’t make a dime from it unless I dump in a ton of time and effort and every drop of writing skill that I have. The idea of a social network was out there before Mark Zuckerberg came along and made Facebook – the difference is that he dumped tons of sweat equity into it and combined it with a few other good ideas. This is true of virtually any “great idea.” It isn’t enough.

Six | Obtaining Capital
You’re going to need help to succeed. Often, that means sucking up your pride and asking for that help. If you’re unwilling to do that, you’re going to most likely sink. Dennis discusses asking for capital at length here, but help comes in a lot of different forms along the way, from good advice to good publicity and good references.

Seven | Never Give In
Once you’ve figured out what you’re going for, don’t give in. It’s often a lonely, painful road filled with failures and also with people asking you to take a different path or to give up on the dream. You’re probably going to feel like you’re losing out along the way. Don’t give up on it. Don’t make choices that force you to abandon what it is that you want to succeed at.

Eight | The Five Most Common Start-Up Errors
Just because you want something doesn’t mean you’re compelled to do it. You might want to be a successful writer, for example, but does that mean you’re compelled to go out there and do the hard work to write novels and short stories and other works and beat the pavement to sell them? You also need to keep cash flow on your mind (meaning: live cheap) and surround yourself with talented people – get involved in communities of people with skills and perhaps hire some of them.

Nine | Cardinal Virtues
Learn. Diversify. Believe in yourself. These are things that anyone who wants to succeed must constantly do. Keep your ears open and don’t assume that you know it all, because you never do. Don’t bet everything on one single endeavor because if that fails, you’re in deep trouble. Believe that you’re not going to fail in the long term (though you’ll most certainly do so in the short term).

Ten | A Few Words About Luck
The ancient Roman philosopher Seneca says that “luck is what happens when preparation meets opportunity.” The more you prepare, the more often luck seems to come your way, even sometimes disguised as poor luck. Focus, practice, good money management, and improvement of your skills means that when opportunities come along, you’re actually able to see them much more often and are financially capable of jumping on board much more often as well.

Eleven | The Art of Negotiating
Eventually, you’ll have to negotiate something with some other party. Dennis strongly suggests deciding what your “target” is before you even begin and that “target” should be set with a lot of careful homework and study. You should never go into a serious negotiation without your homework or your target. The biggest part of your homework should focus on the other party. Why are they negotiating with you? What is it they really want? How can you use that to get what you want?

Twelve | Ownership! Ownership! Ownership!
When you work hard and create something beautiful, you need to maintain ownership of it. When you sell it or sign it away to someone else, you’ve basically agreed to give away this thing that you made. Whatever becomes of it will not matter to you, but your heart will still be invested in it. It’s fine to sell pieces of ownership along the way or to take a burgeoning company public, but remember that whenever you sell ownership, you sell control. You’re no longer making decisions.

Thirteen | The Joys of Delegation
At some point, you’ll have to start delegating some of the things that you work on. You should focus on delegating the tasks you don’t enjoy. The routine tasks that bore you are the first ones that should be delegated so you can retain your energy and focus for the meat of your work. For example, the type of work that I first looked at delegating was the approval of comments – I love to read the comment threads, but distinguishing between spam comments and real comments is/was drudgery.

Fourteen | A Piece of the Pie
If you shouldn’t relinquish ownership, how can you encourage people to help you and to work hard for you? Use your profits to grow what you have. Don’t just channel the proceeds into your pockets – pay yourself a small salary and then channel the proceeds from your work back into the work. This is true whether you’re building a big business or a small non-profit.

Fifteen | The Power of Focus
Having focus right off the bat is easy. The trick is maintaining it. How can you keep focus on what you’re doing? The best way to do it is to change the environment as much as you can on a regular basis. Find new projects to work on. Change the people around you – or at least the positions they’re in.

Sixteen | Whoops!
Eventually, you’re going to make mistakes and fail. The easiest thing you can do to make this more bearable is to build a wall between your personal money and personal assets and the money and assets of whatever endeavor you’re building. Make that wall as ironclad as you can. That way, when whatever you are building runs into trouble, it won’t sink your personal ship.

Seventeen | A Recap for Idlers
The biggest message that Dennis seems to pass along throughout this book is that success relies on self-reliance. You can’t be a success if you rely on others for money, for help, or for anything. Yes, it’s valuable to have those things around to use, but if you rely on them, you’re not independent. Your success depends on their continued support and thus it’s not your success.

Eighteen | How to Stay Rich
The best advice I saw in this entire chapter is to give away what you earn. Give what you’ve earned to charities or to people trying to start their own great thing. This might be money. It might be expertise. It might be connnections. When you give, it comes back to you tenfold because the people you help will feel a great deal of gratitude toward you and will help you in countless unforeseen ways.

Is How to Get Rich Worth Reading?
Absolutely. If you want to succeed at any sort of endeavor in life, read this book. Don’t get caught up in the specifics of business success that he’s talking about, because an awful lot of it won’t even be true for other businesses. Instead, focus on the broader principles of what he’s talking about.

This book is an automatic addition to my “keep ‘em and reread ‘em” shelf of personal finance and personal growth books. There’s just a lot of great material and food for thought between the covers here.

The only problem with this book is the title. A much more apt title – but perhaps less sell-able – is How to Succeed. Indeed, it does a pretty good job at that.

Whenever I go shopping, I find myself with an interesting mix of items in my cart. There’s quite a few generics, quite a few “low cost” name brands, and still some more rather upscale items (like organic fresh foods). Organic baking soda gets tossed in right next to the free range eggs, for example.

Why exactly do I skimp so hard on some items but spend so much more on the others? How is that frugal in any way?

Here’s the thing: it’s all about the value I get from the item, which may or may not be the same as the value you get from the item. And that may be different than the value someone else gets from that item.

Take the generic baking soda. Baking soda is sodium bicarbonate, whether you buy it with an Arm and Hammer logo or with a generic source. There is no extra value, from my perspective, from buying name-brand baking soda. I’m happy to save $0.25 on a box here.

Then we go to the milk aisle, where I’m likely to pick organic milk that is completely free of artificial hormones. To me, the extra dollar or two per gallon that I pay for this is well worth it, as it greatly reduces my children’s exposure to rBS and rBGH, which can alter their development and trigger puberty earlier (among other effects), and the cows do not consume feed treated with pesticides, which shows up in small amounts in non-organic milk. This has a value to me that’s worth paying extra for. This may or may not be your value.

As we walk down the aisle with the garbage bags, I don’t choose the generic, nor do I choose the expensive one. I choose whatever bag is recommended as a “best buy” from the most recent Consumer Reports rundown of trash bags that I’ve read. Why? Because a ripped garbage bag is a big mess that I don’t want to deal with – and generics often rip – but the expensive bags don’t really add anything extra.

Naturally, with all of these choices, I tend to stock up when they’re on sale or I have a coupon.

What process led me to these choices? It’s a pretty simple one.

First, I make my buying decisions outside of the store. If you’re trying to decide which one to get when you’re standing in the store, the psychology of store marketing is going to be at work. Carefully designed packaging and familiar name brands will play a big role in determining what you buy.

If something’s on my list, I usually know the exact brand I’m going to buy before I walk into the store. That way, I’m not spending time standing there idly trying to decide between several options, because that’s when marketing takes effect.

Second, if I don’t know exactly what I’m going to buy, I research it. Consumer Reports is one of my first stops, but I tend to use a lot of different sources. I want to know the ins and outs of everything that I buy, even down to the $0.99 stuff.

Third, if I can’t explain why I would specifically need a higher-cost version, I buy the generic. With the baking soda, I can’t see a reason to spend extra money to get an Arm and Hammer logo. With the garbage bags, I’m buying the “best buy” bags because I do not want the bags to rip – it’s not a mess I want to deal with. With the milk, I’m buying the organic milk for the family health reasons stated above.

This holds true for every item on my list. If I know what value I want from the item and I’ve done a bit of research, I know what version I’ll be buying. I don’t have to look at nine different kinds of diapers or twenty six boxes of cereal to decide which one I want. I’ve already done much of the shopping outside of the store.

This has another big benefit: this, along with a shopping list, drastically reduces the time spent inside a store. I basically move most of my grocery store time out of the store to my home, where I can make my own list and do my own research without all of the marketing distractions in the store.

The end result? I don’t go into a store until I know exactly what I’m going to buy there. That makes it easy to go through the store very quickly. I fill my cart with the stuff I want that delivers what I want and maximizes the value I get for the money I spend. Even better, my time for impulse buys is almost eliminated.

That’s how we’re rolling through the grocery store this morning. How about you?

Given all of the things I write about on The Simple Dollar, some people tend to assume that all of this just comes easy for me and my family. To put it simply, it doesn’t. Just like everyone else, we struggle with decisions at times and find ourselves flailing at things that seem easy on paper.

Here are five things we struggle with.

Clutter / Keeping Too Much Stuff
I’m a collector of things that are important to me now, but I have no problem letting go of collections that I’ve grown away from. My wife, on the other hand, doesn’t collect as much, but she’s very sentimental about the things she has collected.

As a result, we run into problems where one closet in the basement is full of board games I’ve picked up at various sales, crowding out her box of She-Ra toys from her childhood that she keeps for sentimental reasons. A corner of our garage is devoted to several tubs full of “sentimental” items of hers that she rarely looks at but gets upset at the scarcest mention of tossing out or selling. Our son somewhat follows in his mother’s footsteps here, as the thought of getting rid of some of his most favorite toys freom his early childhood makes him very upset.

As a result, we simply accumulate too much stuff over time. On occasion, I go on large purgings of this stuff, usually with her blessing and a few rules as to what not to touch. Still, my feeling is that we have far too much stuff accumulated here and there throughout our home.

Assigning Tasks
My wife prefers to pay bills with a checkbook by looking at the statement, writing the check, and sending it in. I prefer to do that all electronically.

The end result is that several times a year, we both pay the same bill. She’ll pay the cell phone bill by check, while I’ll pay it electronically, and the next month we have a bill with almost a zero balance on it.

While this isn’t necessarily a terrible thing, it does mean that we’re losing interest on that money during the “extra” month and it also means that we could communicate better when it comes to such bill paying and basic planning.

Event Planning
Again, this is another “digital versus analog” conflict. My wife puts all engagements and appointments on a paper calendar in the kitchen. I do all of my calendaring on Google Calendar. This means that we need to sync the calendars on a fairly regular basis.

When that doesn’t happen, of course, there are problems. “You didn’t check the calendar? Today’s the day you’re supposed to pack a vegetarian sack lunch for Joe!” “Didn’t you see? I have a teleconference today at 2!”

Of course, the real solution is probably about two or three years down the road – a digital kitchen calendar that syncs with Google Calendar. I’ll be early in line for one of those.

Limits of Spending Choices
My wife and I are both strongly on board with spending less than we earn and, on the whole, we do a good job at achieving that goal. Of course, we each have different ideas on what some of the better choices on the fringe of frugality are.

My wife, for example, tends to be very picky about cleaning supplies, whereas I’m happy to clean with vinegar and baking soda. On the other hand, I’m very particular about the food we eat – I’ll choose organic milk, while she’ll choose the cheap milk.

If we were on the same page on these issues, we would probably save a lot more money than we do. But, since neither one of us spends money in any outrageous fashion, we let the other one have their way on buying decisions like these.

Long-Term Investing Risk
Sarah is far more risk-averse than I am. We’ve known this for years, but it really came up recently when we both took a quiz identifying what sort of investments our retirement savings should be in.

My investments suggested 95% of the money should be in stocks, with a good portion of that in foreign and developing country stock and in small cap stock. My wife? 40% stock, 30% bonds, 5% real estate, 25% cash. She’s thirty years old.

What we’ve done so far is to put her retirement savings in a portfolio that matches her risk and put my retirement savings in a portfolio that matches mine. Of course, since we’re tied together, that does mean that she’s exposed to more risk than she’d like and I’m more conservative than I’d like, but it’s worked fine so far – even through the 2008 bear market.

Many newer readers of The Simple Dollar haven’t been exposed to the hundreds of great articles in the archives of the site, so this is a weekly series that highlights the five best posts from one year ago this week, two years ago this week, and three years ago this week. I call it … the Time Machine.

One Year Ago (April 11 – April 17, 2009)
Personal Finance 101: Charge Cards Versus Debit Cards Versus Credit Cards – Pros and Cons These terms aren’t interchangeable, though many people swap “charge cards” and “credit cards” as though they mean the same thing.

Nine Ways to Save Money at Your Desk in the Next Hour This is a perfect way to fill a lunch break at work, especially if you haven’t done any of these things before.

The Art of the Apology It’s hard to apologize, but apologies are almost nothing but beneficial in maintaining good, strong long-term relationships.

Nine Pieces of Free Software I Use Every Day These little pieces of software simply help me keep my day going.

The Little Benefits of Trying You’re almost always better off trying something that seems hard than just backing away from it and bringing in an “expert.” Quite often, the thing you’re timid about is easier than you think.

Two Years Ago (April 11 – April 17, 2008)
Building a Powerful Social Network in Your Immediate Area What do you do if you move to a new area without any sort of social network in place? Here’s some advice on how to build that network.

How Much Money Is “Walk Away From It All” Money? I view “walk away money” as being truly financially independent, as it means you are no longer chained to a particular job in any way – you can work on what fills you with passion.

8 Ways to Easily Reduce the Energy Consumption of Your Computer – and Save Big Money Computers can suck down a lot of energy, a consumption that shows up painfully on your energy bill. Here are some techniques for reducing that consumption.

Sunday Conversation #1 I enjoy such interviews with people doing their thing.

How Important is Fuel Efficiency When Purchasing a Car? It depends heavily on what you’re using it for. It’s much more important on a vehicle mostly used for commuting than it is on vehicles for other purposes.

Three Years Ago (April 11 – April 17, 2007)
Fifteen Free Things To Do During A Money-Free Weekend There are lots of entertaining things to do out there that don’t cost anything. Here are fifteen of them.

The Frugal Wedding Registry: Wedding Gift Ideas To Help Put That Special Couple On A Sound Financial Path Most wedding registries are filled with stuff that will often wind up gathering dust in a person’s home or eventually regifted. Why not give the couple something that will actually grow in value?

A Fresh Start: How To Organize All Of Your Financial Documents In A Filing Cabinet Financial document filing can be invaluable for keeping all of your records straight (think auditing or figuring out where your money is going).

The Dangers of Financial Paralysis – And How To Get Out Of The Rut If you spend too much time trying to choose the “perfect” option, you’ll lose money compared to simply choosing a very good option with some rapidity.

Some Thoughts On Voluntary Simplicity I’m a big believer in this philosophy and am moving more and more in this direction as time goes on.

If you’d like to browse through more of the archives, visit the chronology, where all posts are listed in chronological order.

Nine Ways to Get More out of The Simple Dollar
This is kind of a FAQ for new readers and is posted each week along with the Time Machine. Here are nine great ways for new readers to dig deeper into The Simple Dollar.

1. Subscribe by email or RSS. Visiting The Simple Dollar’s website is great, but for many people, it’s more convenient to receive the articles in another form. It’s easy to join 60,000 other subscribers and get The Simple Dollar’s content by email or in your RSS feeder (if you’re unfamiliar with RSS, check out Google Reader.

2. Comment. Each article on The Simple Dollar has lively discussion. Just click on the green square in the upper right of each article on the website and join in!

3. Read my story of financial meltdown and recovery. The Simple Dollar isn’t based on what I’ve read in books or learned in school. I’ve made a lifetime of financial mistakes – The Simple Dollar is a record of what works for me during the process of getting my life on a better track.

4. Download my free 49 page e-book. Everything You Ever Really Needed to Know About Personal Finance On Just One Page is completely free. It summarizes all of the key lessons I’ve learned along the way about personal finance in one tidy package – in fact, all of the main principles can be found right on the cover.

5. Follow me on Twitter – or other social networks. I post tons of interesting articles, quotes, follow-up material, commentary, and other material on Twitter. Follow me! If you’re unfamiliar with Twitter, it’s essentially an open discussion forum for people to share ideas and thoughts with other like-minded folks – you just choose the people you want to listen to and their ideas and thoughts are all delivered to you on a single page.

I also participate on several other social networks. Feel free to check me out on del.icio.us (it’s where I collect links, from which I select the ones that appear in my weekly roundups), wakoopa (what software I use), GoodReads (what books I’m reading), Facebook, and FriendFeed (which aggregates everything). I also have an irregularly-updated personal site, TrentHamm.com.

6. Dig through “31 Days to Fix Your Finances.” 31 Days to Fix Your Finances is an article series that outlines how you can get a grip on your finances over the course of a month.

7. Send me your questions and suggestions. Send me an email and let me know what you’re thinking, what you’d like to see, and any questions you might have. I try to respond to as many emails as possible and I read them all. I may even use your question in a future article!

8. Become a “Friend of The Simple Dollar.” If you find the stuff on The Simple Dollar valuable and are willing to spend five minutes or so a month to help me out with small things, please consider signing up to be a “Friend of The Simple Dollar”.

9. Email a great article you find to a friend. Find an article that you think your friend would love? At the bottom of each article, you’ll find a link that says “Email this” – just click on that, type in your friend’s address, and send it right along to them!

Mal writes in:

I loved your post about how little you save by not flushing. You should do the same thing about your favorite bugaboo, rewashing Ziploc bags!

Rewashing Ziploc sandwich bags is something that I’ve joked about being a frugality “step too far” since the first days of The Simple Dollar. In March 2009, I completely prepared a post on this very topic, intending to present it in a very tongue-in-cheek fashion on April 1, 2009, but I never got around to posting it. Why? It simply read too close to being serious, as though I were strongly advocating rewashing Ziploc sandwich bags as a method to become a millionaire.

However, I did do some real research into the topic to find out how much a person could actually save by rewashing Ziploc sandwich bags. Here’s what I learned.

First of all, in experiments in our own dishwasher, you can wash and re-use a single Ziploc sandwich bag seven times, for a total of eight uses, on average. I would test this by seeing whether or not the sandwich bag would hold liquid after a thorough cleaning. I tried several bags, with use counts ranging from two uses up to one bag that managed nineteen uses. The average, however, was eight uses per bag.

I also timed how long it took to handle each individual bag to properly clean and dry it. In order to get it clean and also get it appropriately dry, you have to pre-rinse the bag a bit, then carefully spread it across as many dishwasher tines as it will fit around. With some practice, I was able to get this procedure down to about twenty seconds a bag.

How much water and detergent is used to wash a bag? I could fit eight bags on the top rack of our dishwasher. According to my calculations, the cost to run a full load is 15.6 cents worth of detergent and water. This means each bag uses 0.9 cents’ worth of detergent and water to get clean.

How much do such Ziploc sandwich bags cost? You can get 500 Ziploc sandwich bags for $8.38 at my local Sam’s Club. This calculates out to a price of – get this – 1.7 cents per bag.

It’s not going to be good, is it? Let’s run the calculations and figure out the savings.

Over eight uses of a Ziploc sandwich bag, you can either buy eight new ones at a cost of 1.7 cents per bag, for a total cost of 13.6 cents, or you can use one bag (cost: 1.7 cents), wash it seven times (cost: 0.9 cents per wash for a total of 6.3 cents), giving a total cost of 8.0 cents, and spend two minutes and twenty seconds rinsing and positioning the bags so that they actually get clean.

You could repeat all of this 25.7 times in an hour, so let’s look at the final math.

You could either use 206 new Ziploc sandwich bags at a cost of $3.50 or you could use 26 new sandwich bags at a cost of 44 cents, wash each one seven times in the dishwasher (at a cost of 0.9 cents per wash, a total of $1.64), and spend an hour doing it.

Your total savings for an hour of washing Ziploc sandwich bags is $1.42.

That, to me, is not worth it. Given the multitude of things a person can do for an hour to earn a return better than $1.42, to spend your time washing Ziploc sandwich bags just to save that small amount is a true waste of time.

Sure, a person with very strong environmental beliefs might choose to do so. Of course, if you have strong environmental standards, why are you using Ziplocs in the first place? Use some heavy-duty reusable containers.

The moral of the story is this: washing Ziploc sandwich bags is not an effective use of your time. It’s an activity that earns $1.42 per hour of nonstop baggie washing. That’s simply not worth it.

One suggestion I frequently give to readers who write in unsure what to do with their money is to plot out some long term goals. The big question I usually ask them to think about is where would you like to be in five years?

Over the last few months, my wife and I have done some soul-searching with regards to that very question in our own lives. We’ve come up with a small handful of five year goals for us. To put it simply, we’re shooting for 2015 with these items.

We will be living in a more rural area.
When we first moved to our current house, there was a cornfield directly behind it. In the ensuing three years, the space behind our house has been purchased for development and a few houses have gone up. While I can still see the cornfield several hundred feet away, the house has gone from being almost in the country to being part of an oncoming property development. That’s not really what my wife or I really want.

That means that, eventually, we will be moving on. We would like to own property in the actual country – an area where we have some wooded land to ourselves and there aren’t many other houses in sight. We’re still debating as to exactly where that land will be, as we have four different general areas that have logical benefits for moving there (one is close to our current social network, one is close to my extended family, one is close to her extended family (and is very beautiful in terms of geography), and one is close to her sister (and is the most beautiful place we’ve ever seen in terms of geography). Thankfully, my work can easily move with me and my wife, as a teacher, can find work with relative ease anywhere.

In the next few years, before our children become too entrenched in their current social networks, we will be making one of the above moves. The longer we stay in this area, the more likely it is that we will just find land nearby and live there.

I will have published multiple works of fiction.
I write fiction all the time. I spend several hours each week working purely on fiction, mostly writing short stories, but also tinkering with a long-existing novel called Rings of Saturn (it’s got some light sci-fi elements, but it’s mostly a story about sibling rivalry).

I don’t feel that any of it is good enough to publish yet. However, I do feel that it’s getting better all the time. My skills with the written word are growing and the stuff I produce is just simply better in every dimension than the stuff I was churning out several years ago. I often attempted to get those things published and all I did was rack up a big pile of rejection letters. At this point, I understand why they were all rejected – they simply aren’t very good.

At some point in the next two years (I have a firm deadline of New Year’s Day 2012), I’m going to submit a few of my best short stories for publication. From there, I would love to build things into actually publishing a novel, but I do fully intend to at least have a decent number of my best short stories published by 2015.

We will be finished having children of our own.
My wife and I do not want to be raising young children in our late forties or fifties. Our goal, by the time we’re fifty-five, is to have all of our children out of the home and on some sort of path towards successful adulthood. If you assume that our children will be primarily out of the home by age twenty, that means we have to cease having children at age thirty-five. That means once 2015 rolls around, we’ll be done having children.

We currently have two children and a third child is just about to arrive. Will this be enough for us? We haven’t really decided yet; we want to see how our family fits together with two adults and three children first. If we decide to try again, though, it will be sooner rather than later. We also want a situation where our children have siblings close enough to their age that they view them at least somewhat as peers and equal playmates, which we’ve accomplished with our first two children.

The only debt we will hold will be a mortgage on our primary residence.
This should be easy to accomplish, as the only debts we have right now is the remainder of my final student loan and the remainder of a car loan, both of which we could easily pay off if the money were not locked into CDs earning a better return than we would get from paying the debt off early. These CDs will mature over the next few years, making wiping that remaining debt out quite easy.

Of course, doing this also means that we have to stick to the mantra of “spending less than we earn,” but that’s basically the normal standard of our life at this point. It’s just how we live, and I can’t see anything that would change that.

My primary writing effort will be in some form other than The Simple Dollar.
Will it be fiction? Will it be another blog? Will it be a series of books? I don’t know for sure. I do know that I love taking on new challenges in my life. I also know that I won’t switch gears unless I believe what I’m producing is a net benefit for others, as good writing can be.

Of course, this means I’m going to be pushing myself to explore new avenues. As I mentioned above, fiction is one of those avenues. As time goes on, I may try other avenues of online writing. I’ve experimented in some other avenues lately without connecting them to The Simple Dollar at all (think politics) with some degree of success.

If I do not try new things, how can I ever grow?

Jennifer writes in:

My husband grew up in an area that often had summer droughts and water rationing. Because of that, he was trained as a child to stick to the “if it’s yellow let it mellow if it’s brown flush it down” mantra. We’re married and live in an area that doesn’t have any water issues at all. In fact, we live near an immense reservoir.

My husband still sticks to that same mantra, but now he claims it’s to save money. I can’t find any evidence one way or another when it comes to this concern. I can’t believe it would save much money at all.

I’m surprised how often I’m asked this question. It must be something that comes up pretty frequently in marriages and relationships. Interestingly, it’s almost always the guy who lets the “yellow mellow” and it’s almost always his female partner complaining and saying it doesn’t save that much.

The big question, of course, is how much does it save? Let’s find out.

The national average for a gallon of water is 2/10ths of a cent per gallon. Many municipalities also charge sewer rates based on water usage, so to compensate for that, we’ll calculate it at a rate of 3/10ths of a cent per gallon.

The average amount of water used in a flush has varied over time. Toilets from the 1950s use as much as eight gallons per flush. Over time, the total amount per flush has gone down drastically. Currently, the average toilet manufactured today uses about 1.5 gallons per flush. Since many people aren’t necessarily using brand new toilets, I’ll calculate the average at two gallons of water use per flush.

So, how many times does a person flush per day? This AWWARF study indicates the average person flushes a toilet 5 times per day. This survey would indicate that the average person has 1.5 “brown” flushes per day.

We have our data – now let’s do the math.

If Jennifer’s husband flushed every time he used the toilet for a year, that would be five flushes per day times 365 days, equaling 1,825 flushes. Each flush uses two gallons of water, meaning he would use 3,650 gallons of water in a year. Each gallon of water used costs Jennifer and her husband 3/10ths of a cent, so the total cost for a year’s worth of normal flushing is $10.95.

Under the “if it’s yellow let it mellow if it’s brown flush it down” philosophy, that would add up to 1.5 flushes per day times 365 days, equaling 547.5 flushes in an average year. Each flush uses two gallons of water, so he would use up 1,095 gallons. Each gallon of water used costs 3/10ths of a cent, so the total cost under this philosophy for a year’s worth of flushes is $3.29.

Jennifer, your husband’s prudence in flushing is saving you guys $7.66 per year. Assuming, of course, you follow the national averages on everything. Most likely, you don’t follow it in some areas, but the variation is probably a mix on both sides of the line, so I think this is a pretty reasonable estimate.

Is it worth it? That’s for Jennifer and her husband to figure out. I don’t think it’s worth $7.66 in a year’s time to deal with the odor of toilet stagnation or potential health concerns, either.

However, if you do live in an area with water rationing, such a philosophy does save 2,565 gallons per year per person that adopts it (on average, of course). It does cut down on water consumption, but as a purely financial move, it’s just not worth the $7 to me.

Good luck! If nothing else, the numbers should give Jennifer and her husband something to talk about!

Today is the official due date for federal income tax returns in the United States. It’s also the due date for the first quarter of estimated taxes for those of us who are self-employed or run small businesses.

Thus, for a lot of us, April 15 is the most expensive day of the year. It certainly is for us – we had to pay in on our returns and pay the quarterly estimated tax. Ouch. It always hurts to watch that much money go away.

Not only that, the whole process is overly complicated, with all kinds of rules and deductions and exceptions. Frankly, if one’s taxes are even remotely complicated, I don’t know how a person would do them in reasonable time without a tax preparer or without tax software (we used TurboTax).

But enough about that. Here are some good ol’ fashioned reader questions.

I’ve been a long time reader and learner of your blog and I was wondering if you ever posted an update regarding high yield savings accounts. I currently only generate 1.10% on my ING Direct account now, far below what they used to give. Is this still the most effective way to save for my ROTH IRA contribution? I am 23 and currently making $35,000 at a tech startup with stock options. Basically I was wondering if you had an updated thought on savings accounts.
- Anthony

The yield on those online high yield savings accounts isn’t anywhere near as good as it used to be. Unfortunately, there isn’t really a greener pasture elsewhere – no accounts are offering above 3% at this point and the only ones offering anything much at all are doing it promotionally.

The reason for this is our friends at the Federal Reserve. As their rates go down, banks lower the rates that thy offer to customers on their savings accounts. Most brick-and-mortar banks still just hold their rates really low – at 0.5% or so – no matter what the Federal Reserve does. Online banks, though, have to keep their rates lower than what they could simply borrow at will at the Federal Reserve rates, otherwise why bother with the expense and hassle of offering savings accounts?

Don’t worry, as the economy takes off, most such banks will begin raising their rates again.

On one level, it’s kind of crazy. When the economy is bad, the interest rates are low but more people have the initiative to actually save. When the economy is good, the interest rates are high but fewer people have the initiative to save.

My 31-year-old boyfriend is currently at a place in his career as a graphic designer where he either needs to find a new workplace or take a break and get his B.A. He is the manager in his current position but doesn’t enjoy being a manager and did not get a pay increase for his most recent promotion. As a graphic designer, he doesn’t need a B.A. to get work but would like to get his degree for job security and personal goals. However, he recently paid off all of his debt and is worried about incurring more loans for school (and delaying his career and his savings to buy a house). What advice would you give him to help with this decision?
- Joely

He needs to decide what’s more important to him – buying a home or going for what he wants to do in terms of his career. Given that he’s debt free and has a good job right now, there really isn’t a “right or wrong” answer here. It has much more to do with what he wants to do.

It’s going to take some soul searching. Both choices have serious risks. Choosing the current job and the house risks severe job dissatisfaction, and given that our job takes up half (or more) of our waking hours and often invades our thoughts in the other half, such dissatisfaction can really poison one’s life. On the other hand, going back to school means giving up that steady job and getting some student loan debt as well.

I encourage him to think about his life in five years. Which side of that fence would he rather be on?

I’m 33, a single mother of two young children, and currently owe $175k on my first mortgage and $39k on a second mortgage. I have about $10k in credit card debt and receive, at best, $800 per month in child support from my ex (my ex is unemployed so I receive a portion of his unemployment check). I have a decent job and make around $50k per year. I have no savings and my 401k only has about $5k in it. To offset my mortgage payment, I have a renter who pays me $400 per month as the home I live in with my children is large. Despite this, I’m completely house-poor. The problem is that my children and I love our home, we entertain and have friends and family over all of the time instead of going out for dinners, etc. The house has been on the market for 6 months, but I haven’t received any offers. I recently found out the company I work for may be laying people off. Am I better to foreclose on the home and start over by living with my parents (who have generously offered to let us do so), or continue to scrape by each month in hopes I can sell my home? Should I consider only making partial payments on my mortgage and put the rest into an emergency fund, again, in hopes that the house will sell?
- Kristine

I think this really depends on the situation with your mortgage. Do you currently owe more than your home is worth? If you do, then talking to your mortgage holder about simply selling the house to pay off the mortgage in full might be the best move. This might also be true if you’re close to even or just barely in the profit.

If you owe a lot less than the house is worth, I’d still try to sell it. I’d probably lower the asking price a bit. One thing you might want to do is research similar homes in your area that have actually sold and see what they sold for. You might simply be pricing your home too high.

All things being equal, I would try as hard as I could to get out of the house sooner rather than later. If the house is simply too big for you and the bills are, too, you should be making every effort to change that situation as the payments for all of that unused space is eating far too much of your finances.

My husband and I have been into science-fiction, gaming, comics, etc. for many years, and we’ve accumulated a lot of stuff. We have been paring down on some items through yard sales and giving to friends (some nice Star Trek costumes went to the local club), but some things I’m at a loss as to where to sell them (example: we have LOTS of Magic: The Gathering cards). What websites or venues would you recommend?
- Lisa

The real question is how much time you want to invest in these sales.

I sold off several collections when I first got into financial trouble. At first, I was like you – I have a collection of things that, according to price guides, is worth $X, so I should be getting $X for that sale.

Of course, as you’re now seeing, the problem is finding someone willing to pay $X for the item. That takes time. Stores with a large inventory of items have the time to wait on a buyer willing to pay $X because they have thousands of items on sale and each of those items finds buyers every day because of a steady flow of customers. That’s a convenience you don’t have.

In order to sell them, you have to put in the footwork to reach the customers, and that can be quite time-consuming. After looking at a lot of options, what I wound up doing is essentially eBaying most of my collections. I took out the individual items that had significant value on their own and sold them individually. The rest I sold in large lots.

28 year old Married couple with no kids.
Finances:
401k – both maxing out
Emergency saving – 6 months of living expenses
Additional savings – 40k

1. Buy the apartment for long term investment. Take 10k loan for car purchase and cope with child related expenses starting next year.
2. Cancel the apartment losing 10k and finish off the second loan that will save us $275 a month (can be used for child expenses). Buy the car with cash next year.
- Anu

You’re spending $20,000 on a used car? I spent less than that on a new Prius not all that long ago.

Anyway, if you’re about to have a child, you’re about to experience an abrupt change in your way of life. Whenever an abrupt change happens, the best thing you can do is insure that your cash flow is stable and that you can handle any changes in that cash flow.

One thing I would certainly do is sit on that apartment deposit until December and see where you’re at then. Are you still anxious to have children in the coming year or two? If you are, I’d forget about the apartment. If you’ve decided that a child perhaps isn’t the right choice right now, I’d buy the apartment, since you have an emergency fund and a good grasp on your expenses.

Look at it this way: your $10K is water under the bridge at this point. You’re not getting it back – all it has done is change the options you have now. Look at your options right now and ignore what you once paid.

Anyways, here’s our background: DH -55 – recently laid off. Me-SAHM. Daughter – in kindergarten.

Mortage is under 100K at 5%. We currently pay $1400 month, which is about $200 more than we are required to do. We have no debt other than the mortgage. We have about $100,000 in liquid savings and probably close to a million in stock investments, etc. We have about $50K in daughter’s college fund. DH is working on trying to find a job in his field. He’ll get 6 months severance. I haven’t tallied our bills yet to see what we would need to live on…but we live pretty frugally. We don’t eat out too much, I bake bread from scratch, daughter gets second hand clothing. DH and I are in agreement on not spending more than we make…but not living a pauper’s life, either. We are blessed and we know it. Many people who have been laid off do not have the savings we do.
Our question: should we pay off our mortgage now? It would be nice not to have to factor that $1400 into what we need to live on. If we don’t pay it off, do we re-amortize it and pay just the minimum?
- Linda

This question again boils down to cash flow.

It seems to me that you have plenty of savings and assets to get you through almost anything that might be thrown your way. If I were you, I would try getting by without paying off the mortgage. Make a sincere effort not to tap your saivngs and see how things are going.

If you find that you’ve reached a point where you’re purely living off of savings, then I would strongly consider dipping into your assets to pay off the mortgage. This way, you’ll eat through your more liquid savings much more slowly – $1,400 a month more slowly. You also have the time to think about what assets you want to sell instead of having your back against the wall and being forced to sell quickly without careful consideration.

I am a 25-year-old young professional and I love kids, I grew up in a large family, and I have lots of experience (but am not certified in any way). A few times a month I babysit for coworkers, friends and sometimes new people through referrals. I do this partly for fun and partly as a small boost in spending money, so I’m not looking to make gobs off of it or use it as income I depend on. So far I have left it up to the parents to decide what to pay and I am never dissatisfied (usually around $6-8/hr). However, I know that I could probably ask for more, but I just don’t know what the “going rate” is for babysitters who are older than the young teen age range. I am on a pretty tight budget right now while I work on paying off debt so maximizing this income stream could help me out a lot.

Often when new people ask me to care for their kids, it’s awkward for both parties coming to a conclusion because I don’t want to ask too much, and they don’t want to offer too little (especially if they haven’t had many babysitters before and don’t know what’s fair either). I feel like having a set rate would make things easier for everyone, it’s just so darn awkward to discuss. Any thoughts? Might be useful to note that I live in a small/medium-sized city in the Midwest.
- Noelle

Given that you live in a small to medium sized city in the Midwest and the babysitting work is not your primary source of income, I think the $6-8 range per hour is reasonable. I would probably raise it a bit in other areas of the country and also if it is your primary source of income. I would lower it a bit if you were younger.

Part of the challenge here is that you’re babysitting for coworkers. If you suddenly started asking for a high rate, you might end up poisoning a valualbe workplace relationship.

If I were you, I would pick a rate in the range that you’re talking about – say, $8 an hour – and then just make it clear the next time you’re contacted about sitting. Simply tell them that in order to avoid confusion and uncomfortable discussions, you just decided to set a clear rate for everyone.

My hubby and I just became parents recently. As part of our daughter’s baptism this past weekend, we ended up receiving some money from relatives. I didn’t even think people gave presents for a baptism, but here we are…..Now, I wonder how best to save the gift money for her future….I would like to avoid weird paperwork, and/or being forced to use the money for XYZ college “or face huge penalties”.

If I set up a simple interest bearing account in her name, can she avoid paying taxes on the interest?
- Rachel Rose

If you set up a simple interest bearing savings account in her name, in most situations she would be responsible for taxes on the interest. Of course, unless your relatives gave amounts totaling in the six figures, we’re talking about a small amount here. If you put $10,000 in an account earning 1.5%, she would make $150 a year and pay taxes on that at a 15% rate – $22.50. If the $22.50 is breaking you, take the money out of the $150 in interest earned.

The best choice would probably be in an open-ended 529 savings plan that allows you to use the saved money for any form of education spending. The College Savings Iowa plan that we use is open to everyone, run by Vanguard, and is easy to sign up for. Money accumulated in that account isn’t taxed. When you withdraw the money for use on any approved educational expense (textbooks, tuition at any school, etc.), you don’t have to pay taxes then, either.

I was wondering if your website is now your source of income, or do you still have a day job?
- Jeremy

Our family’s income is based on The Simple Dollar, other projects that I take on (like my upcoming book), and my wife’s current 9-to-5 job.

The biggest benefit of this is flexibility. My schedule is extremely flexible at this point, enabling me to take care of lots of things.

The biggest drawback is very, very uneven income. We have to budget incredibly carefully to make all of this work.

What do you eat for breakfast? You’ve mentioned how you eat breakfast each day to get yourself going and I’ve seen a lot of news about how it’s really good for you. But I haven’t eaten breakfast regularly since I was six! What do you eat each morning?
- Allie

Most mornings, I eat a piece of fruit for breakfast, like a banana. Sometimes, I’ll eat something like a bagel or something like that if the situation calls for it.

The biggest reason is convenience – it’s really easy to just grab a banana or an apple and munch it as I begin my daily routine. Along with that is the health reason – eating fresh fruit is pretty good for you.

On Sundays, we usually have a larger family breakfast, but those are the exception rather than the rule.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag. However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.