Updated on 02.29.16

Questions About Food Sales, Stocks, Children’s Clothing, Self-Employment and More!

Trent Hamm

Reader Mailbag

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Money when you’re deceased
2. Sales on unusual foods
3. Late college attendee
4. You Need a Budget discontinued?
5. Why do stocks retain value?
6. Finding local self-employment groups
7. ETFs and index funds
8. Future numbers?
9. Tip for children’s clothing
10. Finding time to read
11. Harry’s or Dollar Shave Club?
12. Presidential election thoughts

Several months ago, our family adopted a shelter dog. This was not a move that I was a very big fan of, as I did not really want to be a dog owner, but literally everyone else on our family wanted a dog, so I acquiesced.

For the most part, this experience has been a fine one. We got a very friendly half-Yorkie half-Maltese dog who has no signs of aggression at all other than the fact that he barks at people walking down the sidewalk (something we’re trying to break him of doing). He gets overly excited pretty often, so it’s sometimes hard to tell when he’s signaling that he needs to go to the bathroom or that he sees another dog outside or that he wants to play, as he runs around and puts his paws up on you and barks a little in a very similar way for all of those things. He’s potty trained, though it is very difficult to get him to go outside on the coldest days.

Have I changed my mind about dog ownership? I like our dog very much and I have a very good relationship with him, but I don’t think I would own a dog if I were single again. If I found myself single with this dog, I think I would care for him through the rest of his natural life and then simply not get another dog. Pet ownership isn’t for everyone, and I now know that it’s just not for me.

Q1: Money when you’re deceased

Shouldn’t the ideal goal be to have nothing left when you die? I don’t understand why a person would want to spend very little in life so that they can have a huge mountain of money that they will never spend before they die. Seems like a waste. I want to leave this world with what I came in with – nothing.
– Donald

I agree with you. If it were possible, I think almost everyone would shoot for that kind of conclusion to their life, leaving with a net worth of $0.

The problem is that we don’t know the exact date when we are going to die. No one does (unless they are contemplating suicide). I don’t know when I’m going to die. You don’t know when you are going to die.

I might not make it to age 40. I might live to age 110. I don’t know. No one knows.

For me to hit that target of having nothing left when I die, I would have to accurately know my date of death within a month or so. If I die earlier than that, I’m going to have money left over. If I die later than that, the last days/weeks/months/years of my life are going to be pretty awful – scrounging for food, praying that the bills can get paid, and so on.

That seems like a pretty wretched way to spend the final period of my life. I want that final period, however long it may be, to involve me personally spending quality time with loved ones, giving them gifts/mementos to remember me by, maybe traveling a little bit to see things I want to see again before I pass away, and so on.

I would far rather die with money left over than to have a miserable existence at the end, given the choice.

And the thing is, I have the choice. I can choose how much to save right now. I have that choice every day. To me, it’s worth giving up my most extraneous purchases today to have a relatively high quality of life near the end of my days without worry that I’m going to run out of money.

Since I don’t know when I’m going to die, in order to live out that dream, I have to plan for a situation where I can live in perpetuity on what I’ve saved, where my investments will either never draw down to zero or draw down so slowly as to not really matter in terms of a normal human lifespan.

Yeah, I’m going to leave some behind. That’s okay. Let my kids and grandkids have a big boon when I die. Let a handful of charities that I care about see a nice check, too. I can definitely live with that.

Q2: Sales on unusual foods

I’ve been trying your strategy of using the grocery store flyer to make a meal plan each week. Some weeks this is fine but some weeks the flyers contain almost nothing that I am familiar with. Like cottage cheese. I have eaten it a couple of times but other than using a scoop for a side dish I don’t know what you do with it.

What do you do if the flyer is full of stuff that seems useless to you?
– Ana

Research those ingredients!

Just go to Google and search recipes using cottage cheese, substituting the ingredient that you’re unsure about, and browse through what you find. I found results that suggested using cottage cheese as a ricotta replacement in lasagna (which is actually pretty good – I’ve done that before), using it in a parfait, and this interesting turkey and kale bake that I actually want to try with some of the modifications suggested.

Finding new ingredients in the flyer and then Googling for interesting recipes using those ingredients is a great way to try new foods that aren’t too dissimilar from things you already like. Then, once you’re a bit more familiar with the ingredients, you’ll feel more and more confident about experimenting with those ingredients.

This is actually something I still do sometimes. I’ll see a sale on something that I rarely if ever use in the kitchen – like kumquats – and I’ll have to go figure out what to do with it. That usually lures me into some new recipes and a new ingredient in my cart.

Q3: Late college attendee

I am thirty two years old and single. After high school I went to trade school and became an electrician. I am very fed up with the politics of the electrical trade in my area and want to go to college and study computer science and become a IT specialist. I have plenty of money saved to cover at least a couple of years of college.

The thing that is holding me back is the possibility that this is a really bad investment. If I don’t finish a degree this money is basically a waste so I feel like I need a plan, but I feel overwhelmed when looking at the college materials and trying to figure out an optimal plan for this. Don’t want to just lose money on this. Suggestions?
– Cory

First of all, if you go to college, you’ll be assigned an academic advisor who will help you navigate all of this. Most academic advisors are very good, but if you happen to get a lemon, you can usually talk to the college and they’ll find you a new one.

Your primary concerns should be what you want to do for a career after college, whether the degree you’re working on is the right one for you, and whether you’re academically up to the challenge of it all. If you’re really on board for all of this, your advisor will really help with getting you into an efficient degree program. So, start by researching your desired career path. What kind of degree is recommended? Then, what is that degree program like?

What I would do if I were you is look up the syllabus of some of the classes you might take in your degree program (you know the classes already according to your message). Look over the materials for the first few weeks. Do they seem completely overwhelming? (It’s not a good idea to look at the more advanced classes because classes build on each other.)

You’re also going to need some study skills. Can you sit down in a room with no electronic distractions and study for a while? If that’s difficult, you may find college studies difficult.

Q4: You Need a Budget discontinued?

Do you have any thoughts on the new version of You Need a Budget? It has moved to a subscription model. I am sticking to version 4 for now but that softare is supposed to no longer be updated at the end of the year. Is the subscription model worthwhile?
– Annie

This is something that’s frustrated me deeply with You Need a Budget. I am a huge fan of YNAB version 4, which is what I still use. I have no interest in switching to a subscription model.

In about a year, the company is going to discontinue updates for YNAB 4. It will still work at that point, but gradually it will become incompatible with operating systems and with Dropbox (which a lot of people use for syncing). I’d suspect that in three or so years, the software will still work but will have a few features that are no longer functional.

I understand why the company has moved to a subscription model for their software. When people buy software, it’s a one-time thing. You can’t sell it to them again and again. When you move to a subscription model, those customers become steady long-term streams of income.

However, that runs counter to why I use the software in the first place. I use it to manage my budget and see what subscriptions and services I can cancel, not to add another one to the pot.

I’m sticking with YNAB 4 for now and probably forever, at least until it stops working completely.

Q5: Why do stocks retain value?

I don’t understand why stocks retain their value? Does everyone just agree that they’re worth something? I understand why companies would sell stock to the public to make money, but why do they hold onto value?
– Phillip

There are actually a lot of reasons beyond merely “everyone agreeing that they have value.”

The big reason is that most companies issue dividends. A dividend is a small payment by a company to the owner of every single share of stock in that company. They’re usually issued quarterly. So, let’s say you have a share that’s worth $50 and the company issues a $0.25 dividend every quarter. That means you’re earning $1 every year just for holding the stock – a 2% return. Companies usually raise their dividends over time, too. If you sell that stock, you lose that dividend. How much would you pay for something that spit out $0.25 into your savings account every three months, especially considering that it will have significant resale value later on?

Some people buy stock because it offers additional access to the company via shareholders meetings and so on. Typically, these are large-scale investors who want a company to make choices that will benefit the value of the stock that the investor owns.

There’s also the possibility of the company buying back the stock directly. Companies sometimes do this to reduce the amount of dividends they have to pay out over the long term.

These factors combine to keep the value of stock shares high. There’s real value there.

Q6: Finding local self-employment groups

I was interested and curious about the part where you mentioned you joined a Slack group with other self employed folks in your area. Any suggestions on how to actually find such teams/groups?
– Marcus

I found my group via meetup.com. It exists as a face-to-face group, but I actually get far more value out of the online discussions with group members.

Aside from meetup, I really can’t advise you on where to look. Some professions have professional organizations with local chapters, which might facilitate this type of thing.

If you know at least a few people in your area who might be interested, you can start a group on your own, spread it by word of mouth, and list it on meetup. A friend of mine did this with a local group within the past year and it has more than a hundred members now.

Q7: ETFs and index funds

What is the difference between an ETF and an index fund? I see both terms bandied about but I don’t know what the difference is. They seem to often be used interchangeably. Is there a difference?
– Martin

An index fund is simply an investment option offered by an investment house. You put money into the index fund and this gives you a certain number of “shares” of that fund – here, you usually invest a certain dollar amount and they give you a number of shares (including fractions of a share). Those shares go up and down in value depending on what the index fund is invested in; they also often pay out dividends. When you’re ready to sell, the investment house will buy those shares back for whatever their current value is. There usually aren’t any trading fees or anything.

An ETF is short for “exchange traded fund.” The way I like to think of it is imagine that it is a company itself that is issuing stocks, and the only thing that company does is own a bunch of shares of other companies, sit on those shares, and pass along the dividends to people who own shares in that “shell” company. Popular ETFs usually match the value of all of the shares that they’re holding really well, because that’s how the free market works – if enough people are buying and selling, the value of the item will approach the real value. You buy and sell ETFs through a normal brokerage by paying that brokerage to issue “buy” and “sell” orders. Unlike index funds, you typically can’t own fractions of a share. This is a good way to go if you’re wanting to invest in a mix of individual stocks and index funds and other mutual funds.

Since I have no interest in mixing and matching investments, I invest my money solely in index funds through Vanguard. There are no “buying” or “selling” fees. Instead, I just deposit a certain amount each week and let it sit until I need that money for something. If that’s the kind of investing you want to do, I recommend just getting into an index fund and not bothering with ETFs.

Q8: Future numbers?

How do you figure out what the best financial path to take is when it’s all about future numbers? My husband and I were talking about whether to pay off our mortgage early. It is at 5.5%. We already contribute plenty to retirement so our other option is to put that money into an index fund for possibly starting a business in several years without business loans.
– Denise

Given your two options – investing in something or paying off your mortgage early – you really can’t go wrong either way. You’re getting different things out of each investment.

If you pay off your house, you’re essentially getting a 5.5% post-tax annual return on your money (assuming you’re not deducting your mortgage interest, which you may or may not be depending on family size and other factors).

If you invest, you’ve got a lot of options. You can get a very steady return, but it’s going to be lower than 5.5%. You can accept some risk and volatility and get your average annual return over 5.5%, but that’s pre-tax return (meaning you’ll have to pay taxes on it). Depending on your tax rate and how the investment volatility goes, you might beat the 5.5% post-tax return… or you might not.

My thought? Don’t worry about it. Whichever way you choose, you’re making an excellent move. You’re spending less than you earn. You’re doing something productive with that extra money.

I’d suggest choosing the path that feels right to you in this case. This often has a lot to do with your risk tolerance as well as your goals. For me, I’m a pretty big advocate for debt freedom, so I’d pay off the debt first. I like just having it gone and having a lower stack of bills each month. Other people feel differently.

Q9: Tip for children’s clothing

A suggestion for your readers about kids clothes. Whenever a clothing season is ending and clothes of that style are on discount I go to the stores, estimate the size that my kids will be when that season rolls around again, and I stock up. I estimate on the big side and sometimes I’m too big so the clothes have lasted two years before wearing them. I have been able to get tons of clothes for just a few bucks each as they’re on clearance. The only trick is storing them and then finding them the next season! I use cardboard boxes that are labeled in our garage rafters.
– Connie

This is a good idea if you’re really in tune with the growth of your children. To be honest, we’ve done similar things when they were younger.

However, I would probably stop doing this around age ten or eleven, because when that growth spurt hits, all plans go out the door. I grew a foot, jumped four shoe sizes, and gained about forty pounds over the course of a summer. That would have destroyed any reasonable winter wardrobe my parents would have purchased for me.

So, this works well for early childhood up to about age ten. After that, other frugal clothing strategies work better. I highly recommend checking out secondhand clothing stores and consignment shops.

Q10: Finding time to read

How on earth do you ever find time to read all of the books that you claim to read? We have two children and I’m lucky if I can read 30 pages a week, let alone two entire books!
– Janine

I probably average about two books per week that I read. Obviously, this number goes down when I read a really challenging book or a very long book, and it goes up when I read shorter books or page turners. Still, this is a devotion of a good ten to fifteen hours per week. How do I do it?

First of all, I watch very, very little television. Aside from “family movie night,” I honestly don’t remember the last time I watched a television show. During times when I might have crashed in front of the television, I read, and if I’m too tired to read, I go to bed.

I also intentionally set aside reading time. I usually block off one hour a day for focused reading in the evenings. If there are no urgent household chores, I also usually participate in my children’s “sustained silent reading” that they do after school each day (they all read for 20 minutes after school before any screen time). I also usually read before bed.

These strategies add up to more than enough time to finish two books a week.

Q11: Harry’s or Dollar Shave Club?

Have you tried a subscription razor club like Harry’s or Dollar Shave Club? Was it worthwhile? I tried using a safety razor and it didn’t work for me as it burnt my skin up and I cut myself repeatedly. I want to stick with cartridge razors.
– Melvin

I have tried both in the past. I think they are both on par with the quality of a cartridge razor you might buy at the store (like Gilette Mach 3) or maybe even a bit nicer. Looking through their current offerings, it looks like the prices still constitute a small savings over buying cartridges locally.

However, there’s a catch. In order to be sure that you don’t run out of blades, you have to order more than you’re going to use, at least for a while. You can’t just run down to the store and buy more blades like you can with the store-bought cartridge razors. These blades aren’t compatible with anything else.

If you’re willing to look past that, I consider these clubs to be a better value for the dollar than store-bought cartridge razors. You’re just going to want to have a bit of a blade surplus on hand, which means ordering extras at first.

Comparing the two? I thought Harry’s sent nicer stuff, but it was also more expensive. I’m not sure the “niceness” was worth the extra cost.

Q12: Presidential election thoughts

Do you have any thoughts on this crazy presidential election season? Which candidates will be best in terms of our finances?
– Dennis

First of all, everyone has their own set of personal political opinions. I have my own ideas on what should be done to improve our country, but they’re just that – my opinions. I’m not a politician, nor am I a political pundit, so I don’t think there’s really any point in sharing my views or starting needless arguments. I’ll save that for my extended family Thanksgiving dinners, thank you very much.

However, I will say this. The best thing you can possibly do to figure out which candidate is the best one to vote for is to read both the pros and the cons of each candidate. No candidate is perfect, nor is any candidate completely reprehensible. For the most part, they’re each expressing a particular view of the world, one that isn’t “evil” but simply different than how you see things.

You should take the time to read positive coverage of each candidate, as well as negative coverage. You should read conservative-leaning profiles and liberal-leaning profiles. With each of those things, you’re going to learn new facts and facets about each candidate that will help you make a more informed decision.

I also recommend doing the same with major issues of the day. What are the major policies being bandied about regarding immigration? What are some of the criticisms of each of those policies? What are the good things? Which candidates are in favor of each option? And which ones make sense to you?

The more informed you are as a voter from as many different angles as possible, the better off you’ll be… and the better off we’ll all be.

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

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