Reader Mailbag: Fresh Strawberries

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. Paid-up life insurance
2. Tablet as frugal computer replacement?
3. Online stock trading
4. Frugality and income
5. Why revocable trusts?
6. Need donation receipt
7. Camping in or near Iowa
8. Use for old playing cards
9. Internet and phone bundling
10. Clothesline worth the time?

The work needed to start a garden is pretty immense. The tilling. The planting. The weeding.

Then, you get that first handful of strawberries in the early summer.

Somehow, it’s all worth it.

Q1: Paid-up life insurance
I have a friend who has several paid up life insurance policies. One of the companies servicing the policies wants to convert a policy to an annuity, another wants to convert dividends into more paid up insurance. What is the best thing to do in this situation? (A few details; my friend is 68, no debt, separated and in OK health.)

- Monica

What will happen with those policies when she passes away? Who’s the beneficiary? Will that money actually support someone? Or will it just be money in the pocket of a descendant once the estate is handled?

If there are no dependents and no spouses involved here, the best thing for her to do at this point is to get as much cash as she can for those policies.

The purpose of life insurance is to protect the ones you leave behind from the impact of your passing. If you don’t have a spouse and you don’t have any other dependents, then your only real concern is burial expenses.

Q2: Tablet as frugal computer replacement?
My mother’s old computer is dying and we’ve decided to replace it for her for her birthday next month. My sister thinks that a tablet would be perfect for her. She uses her computer just for email and looking at some websites and Skype. Would a tablet be a good fit here? It would be less expensive for sure.

- Jim

A tablet is a great fit in this situation, actually.

Tablets are perfect for anyone whose computer usage is relatively low on typing and mostly involves reading and watching content. If your primary uses for your computer are web browsing and using Facebook, then a tablet will work wonderfully.

A tablet isn’t the best choice if you’re a heavy typer – a writer or a computer programmer. I don’t think those two situations really describe your mother.

Q3: Online stock trading
Can you give some tips and pointers for someone breaking into online stock trading as a complete beginner? Do you have a suggestion for how much to start with or advice on how to pick which website to use? Also, I’m viewing the money I would put into the market as money that I have specifically taken from my bi-weekly paycheck (a percentage of what my normal savings would be, while still putting the chunk of my savings into an online savings account). Is this how you would recommend to keep building the amount you have in stocks or do you have another way? Thanks for your all that you do!

- Donald

If you are just starting out, I would put aside a block of money that I’m completely okay with losing before I delved into active online stock trading.

I’m not sure what you’re looking for in terms of being a complete beginner. Are you looking for a beginning strategy guide for stock trading? Are you looking for a guide as to how to sign up for an account at a brokerage?

My guess is that you’re looking for something like A Beginner’s Guide to Short Term Trading by Toni Turner. That’s probably where I would start.

To repeat: I would not use any money that I would be afraid to lose into this endeavor.

Q4: Frugality and income
I read an article online where Zooey Deschanel was described as being frugal when she spends $25,000 a month. This is insanity. What is that telling people about what frugality means?

- Roger

Based on the things I’ve read about her, I actually think she is rather frugal.

For one, she spends somewhere around 20% of her monthly income and is banking the rest of it, at least from what I can tell across multiple articles. In 2012, she made somewhere in the ballpark of $10 million from her activities.

For another, her life is full of expenses you and I don’t have. In order to manage all of those things and put up appearances that are likely required by her career choice, she almost assuredly has multiple assistants. She has an agent representing her as well.

Anyone who is only spending 20% of their income and banking the rest is living in a frugal fashion, in my opinion. The scale of income and the scale of expenses are just different than what we’re used to.

Q5: Why revocable trusts?
Why should someone have a revocable trust? I watch Suze Orman and she always dings folks for not having one. I don’t have kids and don’t plan on leaving an estate to anyone.

- Marvin

The biggest reason she advocates for this is that a revocable trust avoids probate.

When you die, if you have a will, that will has to be authenticated by a judge and a court has to supervise the distribution of assets. During this process, you have legal fees, court costs, etc. Usually, these costs are low unless someone is challenging them.

A revocable trust essentially means more up-front effort for a person setting up their estate transition, but it means much easier transition once they pass away.

Q6: Need donation receipt
I donated several items to our library last year. I have asked them for a receipt for them several times, but they keep putting me off. I filed an extension on my taxes so that I could include this in my taxes. How can I get them to give me the receipt?

- Tessa

If I were you, I’d call every day. I’d try to speak to the head librarian and, more importantly, to whoever is managing the accounting for the library.

The unwillingness to provide a receipt seems a bit strange here. It may be that the message simply isn’t getting passed to the right person.

If that’s the case, you need to make that message passing happen. Get ahold of the bookkeeper directly.

Q7: Camping in or near Iowa
My family and I are traveling in an RV from Ohio to Mount Rushmore this June and we will be taking a route through Iowa and Nebraska. Since this is your “area”, I wonder if you’d be kind enough to share any suggested sites to see along the way (I-80 to the Missouri river). Also, if you know of any reputable, but cheap spots for RV. Thanks for any response.

- Logan

I don’t have any specific RV campground recommendations because we don’t own an RV.

However, if I were traveling through Iowa on I-80, I would consider stopping at Lake MacBride State Park and camping there. I’ve camped there twice and enjoyed it each time. It’s near a large and beautiful lake, offers tons of electric campsites, has a wonderful fossil gorge to check out, has tons of trails, and is near Iowa City (one of the best cities in the state).

If I were to make a single recommendation for RV camping near I-80, I’d probably vote for Lake MacBride.

Q8: Use for old playing cards
My father-in-law has a couple hundred decks of old grimy used playing cards that he keeps around “just in case.” He uses fresh decks to play cards with and won’t throw the old ones out. Is there anything useful that can be done with them?

- Angie

You can turn old playing cards into a number of things: bookmarks, ornaments, gift tags, and magnets are all easy to make out of them.

Still, a couple hundred decks? And they’re in pretty awful shape?

It sounds like your father plays a lot of cards. If that’s the case and he’s actually wearing out the decks, it’s a pretty cheap hobby. Still, this just sounds like a bit of “pack rat” nature. If I were you, I’d not worry about it and plan on disposing of them after his passing.

Q9: Internet and phone bundling
For the past several years, I’ve been paying what I feel is quite a hefty internet/phone bundle bill–$78/month. I don’t need the phone, but every time I call to ask for a better deal, I’m told I’m getting a discount already, this is the best deal possible, and eliminating phone service will not save me any money. I’m in Seattle, which might explain the price–everything is expensive here–but I am on a very tight budget and am trying to make all the cuts I can. Do you have any ideas?

- Max

Look for competitors who are offering internet-only packages. There are no telecom monopolies any more – there are other companies out there who will bring a connection to your door.

I’m not sure who you currently use, but here’s a list of providers in Seattle. There’s a lot of them.

I’m willing to bet with some shopping around you can get an internet-only deal for less than $78 a month. When you find it, you can either switch or else you can contact your current company and see if they’ll match it.

Q10: Clothesline worth the time?
Does a clothesline save enough money to be worth the time involved?

- Arthur

Between the energy use, the softener, and the depreciation of the dryer, it’s fair to use $1 as a rule of thumb for the overall cost of a dryer load. That’s a ballpark, of course.

In my opinion, clothes dried outside in the summer in the country smell a lot better than they do out of the dryer. That’s just me – and I think it’s related to how I grew up.

Is that $1 worth it? For a lot of people, it isn’t. It seems that hanging out laundry to dry is a slowly dying art. That doesn’t change the fact that we’ll almost assuredly have a clothesline when we move (it doesn’t make logistical sense where we live, as the only area in our yard that catches a breeze is right in our children’s main play area in the yard).

Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. 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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