Reader Mailbag: Working Ahead

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. Recovering from a big loss
2. A disastrous turn of events
3. Feeling scared all the time
4. Dodgy seminar?
5. Basic budgeting for young adult
6. Credit card strategies
7. SAHM transitioning to career
8. Investing with risk
9. Organizing tax-deductible expenses
10. Meetups

The month of June has seen me working like crazy to get additional posts in reserve for some periods of travel later on in the summer. My goal is to be able to enjoy these trips without worrying about writing content while also not missing a post here at The Simple Dollar.

That means, of course, that I’m working overtime right now. Today, for example, I’m assembling and working on almost a dozen reader mailbags (it’ll take me several days to do all of these).

Q1: Recovering from a big loss
In 2007/2008 I invested in some individual stocks, Citi, Fannie, Freddie etc. amongst others. Since then the portfolio is at an 90% (30K) loss. I don’t NEED this money so I’m OK with riding it out for 30-40 years, in hopes of a recovery. Even if I lose it all its fine, as fine as losing 30K can get, it still hurts but what can I do, can’t beat myself up about it.

This was my first venture in to investing for retirement. Now I’m in a place where I’d like to start investing for retirement again, with a much more conservative mindset, ETF’s, mutual funds, etc. But I am terrified of losing any more of my hard earned money. So it sits in savings accounts earning 1%. My plan actually is to wait it out until interest rates go up significantly 8% or higher and just load up on 10-20 year CD’s, to play it safe. I fear this master plan will never come to fruition and since my money won’t work for me I will have to work that much harder to retire. What do you think?
- Rachel

There have been very few times in history where savings accounts have paid 8% or more. In the mid 2000s, some accounts inched up to 5% with a few teaser rates at around 6%.

However, for such rates to exist, the economy has to churning along quite strongly, causing the Federal Reserve to raise interest rates to a point where banks can make money with such interest rates. That won’t happen soon.

The problem with your initial investment is that you bought into individual stocks. Individual stocks are a very risky investment because you’re investing in just that one company and the people running it. Do not judge all investments by your experience here.

A much better approach is to invest very broadly in stocks using an index fund. A fund like the Vanguard Total Stock Market Index essentially allows you to own a part of a share in almost every publicly traded company in the United States. This protects you from individual company failure and even individual sector failure (which seems to be what you found). Instead, it’s more like riding the stock market as a whole. You’ll have a 15% gain one year, a 10% gain another year, a 30% loss another year, but over the long run (more than, say, 15 years), it’ll trend upwards with a pretty good average annual return. You can buy index funds from many investment houses; I use Vanguard.

Q2: A disastrous turn of events
In October 2010, I had a trach installed and have weakened to where I am on a vent 24/7. I was supposed to only need the vent at night and able to continue my job full-time. Since then I have not been able to return to work on-site. I am able to connect remotely but being in IT it’s hands on so there is not much I can do from home. I am now part-time with no set hours per week.

I just received a letter that I will be terminated on June 30th. So here’s where I need help.

I haven’t driven since my surgery and the van hasn’t been started since. My thinking is (since I’m the only one who can drive it with a big hassle to seek repairs) that it’s better to let it sit and not know if there’s issues then know and not be able to do anything about it. My expenses now are roughly the same minus the gas and other vehicle related expenses. I am still paying car insurance in hoping that I will be able to drive again. My inspection is due in September.

Since October my income has been significantly less but I’ve had the money + working a few hours didn’t hurt my emergency fund. I will have no income as of July 1st. Before I started I was receiving Social Security Supplemental Income (SSI.) I plan on seeking that again. The amount I received was comparable to what I am earning now (until the end of the month.) I don’t think I will be denied as my health has gotten worse and I’m not able to leave my house. The farthest I’ve gone since October was the end of my ramp otherwise it was on a gurney to the hospital.

Should I stop paying my car insurance? I don’t know if I’ll be able to drive when it’s due in August lasting until February. I can’t really sell my van because it’s customized for me. It’s under a carport but it’s only going to get worse in condition.

I really feel stuck. I had my dream job but lost it. I’ve come to accept it when they hired another IT person since I didn’t return soon enough (or now not at all.) I plan on writing thank you emails to a few people as I don’t hold any ill feelings. They gave my months to get back an unfortunately I can’t. The work I do from home is more of a handout and would not be missed as it can be done there.

Right now my day consists of being on the internet all day either working or just looking at websites. I wanted to get off the vent but now I feel too weak to breathe on my own. I have nurses here almost 24/7, my parents are here when they’re not. I feel like I’m being babysat (I’m 32 years old) but need the help because I could get a clot and without someone to remove it will not be able to breathe after 5 minutes (therefore be dead.)

I’m really banking on the SSI to pay my expenses. If I don’t get it, I don’t know what I’ll do.
- Dan

It sounds to me like you hope to be able to drive your van in the future, but you haven’t been medically able to do so for several months. How long is it before you expect to realistically be able to drive your van?

I don’t know the answer to that. That’s something for you and your doctors to determine. However, if that time frame is more than a month or two down the road, you’re wasting money keeping insurance on that vehicle. You can always get insurance on the vehicle when you are able to drive again.

The key thing in your situation is to not give up or give in to depression. Keep your chin up. Find online communities that engage you and interest you. Get outdoors as much as you can and enjoy some fresh air. Good luck.

Q3: Feeling scared all the time
I am 26 and live with my mom (this is not a bad thing where I live). About 18 months ago my father suddenly passed away, leaving my mom devastated.

His death, aside from being a sudden and a very, very heavy blow emotionally, led to certain complications:
–mom being unstable emotionally for quite some time. She used to be such a strong person and now she rarely has the strength or desire to do anything.
–me going back home to her, leaving the friends I had from university and other people I knew
–huge money crisis since I spent two months looking for work, while having a business loan to pay
–break-up with my boyfriend of three and a half years (we lived together the whole time)
–leaving a start-up business which just started to earn tiny bits of money
–a lot of stress trying to figure out how to handle it and what to do next – go back to the big city or stay with mom, for example

By the way I LOVE my hometown and my mom, and I don’t view coming back as some sort of sacrifice (people have suggested so before but it’s really not true).

So my questions are:
1) I now realize I have this subtle feeling of being scared which doesn’t go away. I worry about mom, my future, her future. I also feel very alone because I am a single child, all my grandparents are dead. My aunt lives in the same town but we’re on bad terms. My other family is very far away. I feel like I have no one to rely on – because even though mom really does a lot, I can see she is not the same as before and I just don’t get the same sense of security as before. How do I deal with it?

2) As a result, I spent all my efforts to paying back my debt and saving. I now have growing savings which gives me some comfort and security. However, people my age tell me that I’m being too extreme with saving and trying to insure against everything. They say I should “live a little”. Do you think they are right? To be honest, so far having money in the bank really did help ease the worries to some extent, but like I said the fear of SOMETHING is still here. It is a fear that something would happen and I wouldn’t have the resources to fix it. Am I oversaving? Should I loosen up a bit and spend more on travel/entertainment? (Right now I get free-fun with books and walks etc. which I really enjoy.)
- Anne

It sounds to me that you’re afraid of losing your mother and being alone in the world.

Let me put it this way: if you’re close enough to your parents to just drop your life and move back to your hometown to help out at this point, your parents were very central in your life. You’ve also broken up with a boyfriend that you dated for three and a half years recently.

Two of the three most central people in your life have vanished recently. That’s a major thing to deal with.

My honest suggestion for you is therapy. Simply go to a therapist and talk through these problems. I don’t think you’re in a situation where pharmaceuticals are a good answer, but talking through all of this will do you a world of good.

Q4: Dodgy seminar?
My dad has just finished a seminar about Be Your Own Banker, wherein you use dividend-paying whole life insurance policies as a vehicle to give yourself “loans” to make lifestyle purchases, like a house, car, etc. I’ve gone to the web site, but it just has cursory information, and not much substance (I guess you have to pay to go to the seminars or buy the book to get the entire philosophy). What do you know about this, and in your opinion, is he being taken for a ride? I know you’re not a proponent of whole life, and neither am I – my husband and I both have term policies taken out on each other. However, if this is one way that you could build your wealth, after eliminating your debt, and also a way to finance “loans” to yourself, rather than being dependent on banks or other financial institutions, with all the tax and interest implications, it seems as if it might actually be a good way to build wealth, avoid taxes, and live your life independently. They’re not billing themselves out as a “get-rich-quick” scheme, so I have to give them credit for that, at least, but if they’re fleecing people long-term, then it’s still a scam and people should be aware of it.

- Colleen

It’s not a get rich quick scheme, but it’s not a brilliant scheme either. It’s not always as easy as they describe to borrow money from a whole life policy.

For one, there are often waiting periods to borrow money. It’s not always available just when you need it. For another, you have to pay interest on that loan at a rate specified in the contract. All that does is tie up your monthly cash flow again, no different than any other debt.

While the concept is good – have enough money in the bank so that you can borrow from it! – it doesn’t make sense to work a whole life insurance policy into the mix. Just have your own saving/investing plan and take money from that when you need it. No monthly payment, no waiting period, no interest. If you want life insurance, get yourself a term policy, as it’s a lot cheaper and provides the same peace of mind.

Q5: Basic budgeting for young adult
I just graduated from University in May and have a smallish amount of debt, $4,500 in federal student loans at about 6% interest and $450 on my credit card (interest is about $4/month and I pay 2x the minimum). I have 5 months left on my loan grace period before they start payments. In addition, because I chose to study abroad in London my last semester, I have saving of about $600. I was lucky enough to get a fulltime temp job (3-5 months) that pays about $500/wk, 75% goes straight to savings, the rest checking. I live with family so I have limited expenses aside from gas for my hour commute (Biking or busing would take 4hours total) and about $20 in coffee per week. I would like to pay off my debt, save for an apartment, and also build an emergency fund, but I don’t know how much of my income to allocate to each area. Any advice would be great because I am financially lost in this “transitional” period of my life.

- Max

If I were you, I’d prioritize those goals you have according to the specifics of your current life situation.

Since I don’t know all the details, I can only give you my impressions based on the information I have. I would probably save a small emergency fund first, perhaps $500. After that, I would knock out the debts. Once that’s done, I would start saving for an apartment.

This, of course, assumes that your living situation is tolerable both for you and for the person you live with.

Q6: Credit card strategies
I’ve got a question regarding my credit card debt. It is currently at $7,500 and has a 11.79% interest rate, but is interest free for 55 days after purchasing items. My current strategy is that every time I get paid I transfer the bulk of my salary (apart from 10% which goes into a high yield savings account, and roughly 300 dollars which I keep in case something comes up that I might need cash for) onto my credit card, and then pay for everything using my credit card. I then try and spend frugally, so that I’m spending less than what I’ve paid off, slowly chipping away at my debt. My logic is that by doing this I’m avoiding having to pay off interest for my purchases, and in fact I very rarely get charged interest, because I’m constantly paying (most) things off within 55 days.

What do you think about this strategy? Is it better to just accept that I will be charged interest and begin just paying off the minimum amount each month? Or should I keep doing what I’m doing, but work harder at trimming the fat out of my spending habits?
- Serena

The idea of using a credit card for purchases but keeping the balance at zero to avoid interest is a good one. Credit card interest rates are usually painfully high.

Your best approach for this – which might be what you’re doing, I can’t tell – is to simply have online access to your credit card account. Each time you get paid, log onto that account and then issue a payment either equal to the balance or equal to as much of the balance as you can pay. If this leaves money in your checking account, good. Ferret most of that off to your savings account.

Beyond that, I’d start looking at goals so that you can start doing something sensible with your savings. What are you hoping to achieve with that savings?

Q7: SAHM transitioning to career
I’ve been a stay at home mom (SAHM) for 5 years, and am starting to think about planning to get back to work (yes you read that right – I’m taking this slow!).

My background: before kids, I worked in IT, mostly on the support side. I did tech support (+ some business analysis, training & site implementations) for a specific system for several years. When the time came to replace this system, I was on the project team to design, develop, test, implement, and roll out the new system. I was very involved in the design and test phases, with some involvement in the other aspects.

Throughout my career, I had an interest in programming. The “puzzle solving” and “create something” aspects of programming appeal to me, plus I have some natural aptitude for it. I took some community college classes, and did some study with mentors and on my own, but didn’t get beyond a basic learning level before kiddos came and I stopped working.

As I think about returning to work in a couple years (my kids are still in pre-school), programming still has my interest, and I’m seriously considering pursuing it. I would like to start learning and preparing now, as my full-time Mom schedule allows. My issue is that I don’t know where to start. There are so many specialties in programming, and I have no idea what direction makes the most sense – what skills will be the most marketable? Two areas that interest me are web development and ipad/iphone development, but really, I’m pretty open here! The style of job I’ll be looking for is one that is flexible when it comes to schedule. I want to be home when my kids get home from school, and probably won’t want full time hours.

Do you think it’s even possible to learn programming on a “part time” schedule, rather than in college classes or on the job? Is it ridiculous to think of taking on such a technical career at this stage of my life (I’m nearly 40)? Other advice? Knowing you’ve been in a programming career before, and you totally get life-with-young-kids, I really value your input.
- Katie

My suggestion to you would be to pick out an area of programming that interests you and dive in at home with the goal being to produce a product that you can show to potential employers.

Let’s say, for example, that you’re looking at iPhone app development. Start learning that at home. Get the dev kit and start making applications on your own. Come up with a project that you think people might actually want, code it, then get it listed in the iTunes store.

If you build a small portfolio of these types of things – and you can do the same thing with websites, etc. – you can not only use that as part of your resume to demonstrate current skills, they may become revenue generators on their own.

Q8: Investing with risk
Where do you find a “high-risk” place to invest? Please do a newsletter on risk opportunies. I saw what you said about index funds. Did you mean that?

- Clay

“High risk” is a relative term. Loaning my deadbeat cousin $50 is an extremely high risk investment.

If you’re looking at investments that investors typically make that are considered high risk, you’d probably be looking at things like stocks in individual companies (which you can buy at online brokerages like E*Trade), index funds of stocks from emerging markets (which you can also buy at such brokerages, but also from low-cost investment houses like Vanguard), or precious metals. All of these things are extremely volatile. All of these things can see 50% returns in a single year – or 90% losses in a single year.

Usually, when you buy such items, they’re balanced by lower-risk items. You might buy an index fund of a huge range of domestic stocks (which might have a 20% return possibility or a 40% loss possibility in a single year, with the upturns being more likely) or simply keep money in cash (always returns about 1%).

If you have, say, 50% of your money in cash, 20% of your money in domestic stocks, and 30% in foreign stocks, you are hedging your risk while also being on board for any periods of exceptional returns.

Q9: Organizing tax-deductible expenses
How do you track your tax-deductible expenses during the year, to make things easier in filing your taxes? I tuck relevant receipts in a folder during the year, but at tax time it takes a few days and lots of piles in the living room floor, to organize and itemize everything. Our itemized expenses include things on our charge statement, checks written, automatic bill payments through our bank, direct deductions from our checking account, etc. Also, I’m self-employed, so have office expenses, and more to track and deduct.

I’ve bought Quicken and installed it, but haven’t taken the time to figure out how to make it work for me. Do you use Quicken? Or how do you organize your expenses to make tax time easier?
- Ann

I usually use envelopes to track my tax-deductible expenses. I keep all of the receipts in a big manila envelope so I have them all in one spot when I do taxes the following spring.

If I need special notes with anything, I just write the note and attach it to the receipt with a paper clip.

I don’t use Quicken at all. I use Microsoft Excel for budgeting and use TurboTax for tax filing purposes.

Q10: Meetups
I noticed that in a recent reader mailbag you seemed to be avoiding an obvious opportunity for a reader meetup at that convention you’re going to. This seems to me to be either really egotistical or really poor self-promotion. Why wouldn’t you do this?

- Kevin

For starters, I’m not really a self-promoter. I’m not into doing this to make myself into some sort of guru who sells people on stuff or that people follow blindly and angrily defend no matter what.

So why don’t I do meetups and the like? The biggest reason is that most of the interactions I have with people are one-on-one interactions. They tell me some very private things about their lives and because of that, I’m able to help them. The mailbags are a taste of this, but they’re anonymized. You can’t replicate that kind of relationship in a face-to-face group setting with people you don’t know. I regularly meet up with people one-on-one for various reasons and I’m doing so at that convention. I just don’t think what The Simple Dollar talks about translates well to a room full of strangers.

I do sometimes meet readers one-on-one. I do this because I know that usually they’ve got something that they’re trying to work through or else they wouldn’t be trying to meet up with me, and in a one-on-one meeting at a coffee shop or something, they’re likely to spill the beans and talk through it.

I can actually help someone else that way. At a big meetup, the only person I might help is myself, and that’s arguable.

Got any questions? Email them to me or leave them in the comments and 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 hundreds of questions per week, so I may not necessarily be able to answer yours.

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  1. eva says:

    Re: Q2, I wonder if this reader should seek legal counsel. If they have a verified disability (seems so if they can collect SSI) their employer may be required to make reasonable accommodations if there is work they are capable of doing, under the Americans With Disabilities Act. While they say they have no hard feelings it may not be legal for their company to fire them if it is possible for them to some kind of work.

  2. getagrip says:

    @Q3 Just want to point out that not only have you lost two very important people in your life, but based on the limited information provided, you have also conceptually lost a third, your mother. She is no longer the “rock” you could rely on, if anything she is now potentially reversing roles and relying on you. Not only did you lose your father, but your fundamental view of your mother has been shattered, and that’s a tough pill to swallow suddenly, especially when there are no siblings or close relatives to help share the burden. Most of us come upon the realization that are parents are not what we imagined they were, good or bad, more slowly.

    So to me it’s no wonder you’re worried.
    I think Trent’s suggestion of talking this through with someone who deals with grief counciling is a good suggestion for you and possibly your mother.

  3. Johanna says:

    @Rachel, Q1: From the way you phrase your question, it sounds like you still have what’s left of your old investment ($3K or so) invested in those same stocks, “in hopes of a recovery.” That’s probably the wrong way of thinking about it. You say “what can I do” but there *is* something you can do – you can sell those stocks now and invest that money in something else that’s more in line with your current tolerance for risk. You can’t make the $30K magically reappear, but $3K is still a considerable chunk of change, and you can make some better choices with it.

    There’s something in our psychology that when we lose money in an investment (in stocks, real estate, or whatever) we tend to hold on to that same investment, thinking that somehow the investment owes us the money back. But it doesn’t work like that.

    So instead of holding on to those same stocks in hope of getting your $30K back, think about building the portfolio you want now with the assets you have now. If you were starting from scratch with $3K to invest (plus whatever other money you may have), would you want to invest it in those specific stocks? If not, then sell them now and move the money to some other investment.

  4. Marilyn says:

    Regarding question #9. I have several rental properties and I need to keep receipts organized. I use a separate plain manilla envelpe for each property. On the outside of each envelope I write the pertinant tax return information for each individual receipt. At the end of the year I just total the figures. It takes a bit of time as each receipt goes into the envelope but saves a ton of time at the end of the year.

  5. Johanna says:

    Q3: Trent, please stop opining as to whether readers are “in a situation where pharmaceuticals are a good answer.” You’re not a doctor, and even if you were, I don’t think that’s something you could reliably determine over the internet. Please leave the medical diagnoses to the medical professionals.

  6. Sandra says:

    Re: Q2: I don’t know which state you live it, but in many states, a vehicle cannot stay registered unless it also has insurance.

  7. MJ says:

    Q2, you don’t want to stop insurance altogether if you think there’s a good possibility you’ll drive the van in time. The insurance companies have a category for “person who owned a car but didn’t have insurance” and it makes your rates go sky-high, even if you can prove you weren’t driving the car. What you want is “storage” insurance. You can revert to regular insurance from storage insurance at any time. I’ve used storage insurance several times while spending long periods abroad; mine has averaged $20 per year.

  8. kristine says:

    Q3- Please see a professional, and let them, not a finance bloggger, guide you as to whether anxiety mediation is warranted or not.

    Also, you may want to suggets your mom talk to someone as well, as her grief could transition to clinical depression.

    For criminy sakes Trent- you don’t even have a complete list of symptoms or doctor’s diagnosis! How do you know the woman is not pulling out her eyeleshes, not eating, or waking up with palpitations? You only know a brief outline, which makes dispensing medication/no medication advice completely baseless and arrogant.

    At least you suggested therapy, which is a step in the right direction.

  9. kristine says:

    Q7- You might want to call your old supervisor and ask him/her what programming skills are the most in-demand at the moment, and what is anticipated to be in demand next year.

    You might also check the job boards for what is being sought after in the job descriptions that meet your income target.

    Cross-ref with what interests you. Then search for expedient training venues- tech training schools, local college, online classes, or even a past colleague willing to tutor you for a fee. Then choose what will give you the most bang for your buck in every way.

  10. Kevin says:

    Re: Q6

    “The idea of using a credit card for purchases but keeping the balance at zero to avoid interest is a good one.”

    Right. But he’s NOT “keeping the balance at zero.” He said he’s carrying a balance of $7,500.

    The advice given doesn’t apply at all to Serena’s situation. Unfortunately, it seems Trent misread or misunderstood Serena’s question. Serena clearly explained that she plans to keep using her credit card to pay for things, then each month, paying slightly MORE on her credit card than she’s added. This will have the effect of slowly whittling down her balance.

    I’m not inferring anything here – this is exactly what she said in her question.

    In the “olden days,” what she’s describing wouldn’t work. The bank would apply her payments to the MOST RECENT charges, leaving the older purchases on there to rack up interest. Now, however, with the passage of relatively recent legislation, I believe banks are required to apply your payments to the HIGHEST interest items on your statement, so I think her plan will actually work, on a mathematical level.

    On a behavioural level, however, I think it’s a terrible plan. It perpetuates a dependence on high-interest credit card debt. One or two missed paycheques, and it all unravels extremely quickly, ruining her credit. Serena should pay CASH for things, develop a written budget, and slash her lifestyle until that high-interest credit debt is completely paid off.

    Get it down to ZERO, Serena. Quit playing with snakes!

  11. Kevin says:

    Mea culpa. The “He”s in the first paragraph of my last comment should, of course, be “She”s.

  12. Jonathan says:

    I still don’t understand the negative comments that Trent gets when he mentions that it sounds like someone could use therapy, but may not necessarily need medication.

    First, a good therapist is going to recognize if someone needs medication, and make suggestions accordingly. On the other hand, going to a family doctor and asking for medication is not necessarily going to result in a recommendation of therapy. By suggesting therapy Trent pointing the OP in the direction of what they need, which is someone qualified to talk to and someone who can make a determination of whether or not they might need to seek medication as well.

    Second, for many people taking such medication has a very negative connotation. I’ve experienced this first hand when I took such medications as well as when family and friends have. Suggesting that the OP should talk to someone is a much gentler suggestion, and the type that is easier to accept by some people, than a suggestion that they should be put on medication.

    Different issues require different treatment. Some require therapy, others require medication, and some require both. I have yet to see Trent say that taking medication in these situations is bad, which seems to be the impression some other commenters have gotten. What I have seen is the suggestion of therapy, which if followed should result in the appropriate treatment being prescribed.

  13. Josh says:

    Q1: You are in a position that many people today are in. Once you have a bad experience in the market you realize there is no reason to put your money at risk.

    It may be surprising to you but the best and safest place to put your money is in a properly structured life insurance policy. It has guaranteed minimums, it grows tax free, it’s post tax dollars so you will never have to pay taxes again, and it is protected from creditors and government.

    Also your money is liquid so you can continue to use it whenever you want, unlike most other investments and retirement plans.

    It’s not right for everyone, however it is worth checking into. Most wish they knew about this when they finally learn.

  14. Kevin says:

    #12 Josh is a sleazy spammer.

    His name links to a website that sells whole life insurance products. They know the name “whole life” is poison, so they’ve come up with fancy new euphemisms for it, like “Inifite Banking,” but it’s really whole life insurance.

    Whole life insurance is a terrible, rip-off product, and nobody should ever buy it. Josh, you’re a filthy dirty spammer. Go away.

  15. Johanna says:

    Q5, Max: Good for you for paying more than the minimum on your credit card. But even paying twice the minimum, it’ll still take you (I’m guessing) a couple of years to get rid of that balance. The balance is small enough, and you’ve got enough spare cash, that there’s no reason not to knock it out much sooner than that. Pay the whole balance off out of savings right now, if you want to, or bump your monthly payment up to at least $100 a month. You’ll save a few bucks on interest, but more importantly, you’ll have one less thing to worry about.

    $20 a week on coffee is a lot, actually. That’s $1000 a year. On coffee. Think about what you could do with an extra $1000 a year. Then think about whether there might be a cheaper way for you to get your caffeine fix.

    What are your prospects for getting another job once your temp position runs out? If there’s a significant chance you’ll end up totally unemployed, I’d horde as much cash as possible while you still have an income, so you’ll be able to make payments on your student loan once those kick in. (And be very nice to your family, so they’ll let you continue to live with them.) Don’t bother distinguishing between “emergency savings” and “savings for an apartment” until you’re actually in something like a stable, permanent job. Then you can start thinking about an apartment.

  16. valleycat1 says:

    Q2 – comment 6 – If you aren’t driving the vehicle for an extended period, in CA you can notify the DMV that the vehicle isn’t in use & you pay a very low non-op registration fee & don’t have to have insurance.

    Q9 – organizing receipts: My DH is self employed. The best advice we got on paperwork is to set up financial files (or envelopes) based on the categories of the IRS tax form you use to file (business income or farm income schedule). We even organize them in the same order as the form line #s. We also categorize the accounts in Quicken the same way.

    That way, we’re spreading the sorting of info across the entire year (we file the receipts after we’ve entered the purchase in Quicken), and when we run our year-end totals, everything’s organized & we just plug the numbers in at tax time.

    We have the folder labels in a Word document & just print a new batch each new year; we put the line # on the labels too to make it even easier. We don’t use tax software. It also makes it easy to find a receipt if needed, because we know to look in the file for sales, repairs, or equipment, or chemicals, etc. (categories on the Farm schedule), instead of having to go through a huge file with everything in it.

  17. Johanna says:

    @Jonathan #11: The thing is, Trent has no idea whether the people who write in would benefit most from talk therapy, medication, both, or neither. (And neither do you.) And yet, he’s weighing in on the matter anyway.

    As for the “negative connotation” of “such medication,” don’t you think that Trent is contributing to that with what he’s saying here? The implication is “Don’t worry, you’re not one of *those* people who needs medication. Those people are *really* messed up. But you’re not as bad as they are!”

    There isn’t (or at least shouldn’t be) anything shameful about taking medication to improve your mental health if that’s what would help the most.

  18. Steven says:

    I think the real reason is that Trent is an introvert and therefore has difficulty relating to people in real-life situations. I know the same is true for me. I’m a real loud mouth on the Internet, but get me face to face and I’m quiet and mild-mannered. It takes a while for me to warm up to someone. I suspect the same is true for Trent. We can be outgoing and friendly for about 10 minutes before we run out of things to say and revert to awkward silence.

    That said, I also thought it was a bit egotistical of him to say, “No, I won’t meet up with you, but carry my book around and if you see me, I’ll sign it.” Sure Trent…whatever. If that were me making the request to meet and say “Hello” I wouldn’t even bother after that kind of remark.

  19. jim says:

    Q1 Rachel : I agree with Johanna. Also, if your stocks aren’t in a tax sheltered retirement account then selling them now should give you a loss that would help offset your taxes.

    Q2 Dan : Call the insurance company and see if they can suspend your coverage so that you aren’t canceled but have it on hold or something like that. I think companies often offer such a thing for situations like yours. I’d also try to find work from home jobs in the computer field. With IT experience you should be able to find something. Lots of legit companies do WFH, you just have to hunt to find them.

    Q3 Anne: We can’t tell if she’s oversaving since we don’t know how much she’s saving vs spending. Yes its possible to oversave.

    Q7 Katie : Yes its possible to teach yourself programming at home. But we all learn differently and class instruction might help. You might want to take a course or two at the community college to help get yourself the fundamentals. I’m not sure how employable self taught programming skills would make you. You’d be at a disadvantage to people with degrees so employers would expect you to have relevant experience. You’d be in a chicken-egg situation. Employers want experience but you can’t get a job to get experience. Doing independent work like a web design home business may be a good option for you. I’d consider getting a degree via part time or online courses from your local public colleges.

  20. jackowick says:

    @Johanna #5 in response to Q3: he’s expressing an opinion, which is the entire basis of this site/forum/experience. Advising her to talk to a therapist, who may actually decide that pharmaceuticals are needed, is a more conservative path than just going to a doctor and saying “I need Lexapro/Xanax/Avocet/Flonase” whatever.

    In addition, it may be cheaper to find a pro-bono style therapy counselor through either a work benefit program (we have that here) or some other outlet, which could be cheaper and thus contributes to the theme of this site.

    And I disagree with your response on comment #14 “Don’t bother distinguishing between “emergency savings” and “savings for an apartment” until you’re actually in something like a stable, permanent job. Then you can start thinking about an apartment.”

    An apartment cost is a one time load fee for the deposits, but emergency funds are always there. I personally think it’s a good strategy to not “get into” an apartment until you have both the e-fund and deposit saved. You can rename it all “cash in the bank” or call it two separate accounts, but the underlying gist is yes, you don’t want to have a cash fund for an apartment and find that when you sign the lease you are back to zero dollars.

    Politely disagreeing.

  21. Jonathan says:

    @Johanna #11 – I understand your point. My point, though, is that since Trent can’t possibly know if the OP would benefit from Medication he’s pointing her in the direction of a therapist, who then can make that determination. I don’t know how it is in other places, but around here you can go to a rural physician and have them put you on medication (what my grandmother would call “nerve pills”) without ever talking to a psychologist or psychiatrist. I think that you would agree that being prescribed medication when its not the best course of action is not the best solution. From my standpoint suggesting a visit to a therapist is much more likely to result in the correct treatment being prescribed than suggesting that someone might need to be put on medication. I realize that it could be different in different areas, and perhaps most physicians would not prescribe the medication without first referring a patient to someone qualified to do a psychological evaluation. Unfortunately that is not the case around here.

    I agree with you whole-heartedly that taking medication to improve one’s mention health should not be shameful.

  22. Johanna says:

    @Jonathan: It sounds like we agree about what the appropriate recommendation should be. But in making that recommendation (“Make an appointment with a mental health professional to see if they can help you”) there’s no need to mention medication at all, one way or the other. But Trent did mention medication, specifically to say that he doesn’t think it’s needed, which is not something he can possibly know. That’s what I’m objecting to.

  23. Jeff says:

    @Q1: I would highly recommend the BogleHeads investing forum. You can learn a lot there about low cost, safe, “buy the market” investing. More or less the opposite of the situation that got you burned. Also, as far as interest rates go: it is important to remember that what you care about is after inflation return. If interest rates on savings accounts and CDs are 8%, inflation is going to be near 7 or 8% as well. You are unlikely to gain significant amount of real worth using savings accounts. To increase return, you must increase risk. There is no free lunch in investing.

  24. Sandra says:

    Re Q2 and my previous comment: It might be worthwhile to maintain at least minimum coverage on the vehicle.

    In my state (Maryland), one is required to turn in their license plates and registration card when the vehicle’s insurance is cancelled.

  25. Brittany says:

    This was actually a pretty solid mailbag. First one in a while. Thanks for encouraging therapy for someone who needs it (but still–what the unnecessary and unsubstaniated “I don’t think you need drugs.”? If you’re thinking that she may be scared to go to a therapist because she doesn’t want drugs, maybe phrase as “I’m not suggesting drugs–just to go talk to a professional. He/she can help you figure out what you need.”

  26. rubyleigh says:

    Q10: While I appreciate your none self promoter stance and a little less narcissism in blog land is certainly welcome. I’m not convinced that meetups are strictly about self-promotion. I’ve really enjoyed getting to meet some of my favorite bloggers (and not necessarily because I have personal problems to discuss), and I count it as nice that they set up such events for me to do so.

  27. Courtney20 says:

    Sandra – Actually in Maryland one is required to turn in the license plates and registration BEFORE the insurance is cancelled. They ask you at the desk. If you cancel the insurance first, you will get a very big fine for having an uninsured vehicle, even if it was only for a day.

  28. Joanna says:

    re #2: In Texas at least you can keep a car insured for significantly less $$ if you’re not going to drive it more than a certain # (very few) of miles over a period of time. I kept my car parked at my parents’ house & insured for very little in this manner while living abroad for a few months. That way you have no worries registration-wise.

  29. Bill says:

    #19 Johnathan touched on it but Q1 Rachel really needs to think about selling her old positions solely for the tax benefit. If you have 30k in capital losses you can use that to offset short term capital gains elsewhere or even ordinary income. If you leave it in your old positions it will be offsetting what should be future long term capital gains. There’s no reason to think your 3 year old losers are going to do any better in the future than the broader market. Sell the positions and invest in something you believe is a wise investment as of today. At the worst you’ve transferred your money into an investment you believe in at best you are saving 30k times the difference in the long term and short term capital gains rate.

  30. Jake says:

    I’m pretty new on the boards but gotta say, this is a wonderful site and obviously there is alot of people that have great trust in your wise words. I hope I will be looked at in a similiar fashion in the near future.

  31. JS says:

    Q10: Did you ever consider that some people don’t like to work when they’re on vacation, even if it’s work they enjoy?

  32. Des says:

    Q7 – Katie, while Trent’s advice is good, you should be aware that most programming jobs are not only full time, they are overtime and often come with on-call responsibilities. It is quite common in this field to work 50-60 hours a week, and have a smartphone sewn to your hip. I have never, ever seen a part-time programming position. (They might exist somewhere, but they are certainly rare and likely very competitive).

    With that in mind, I would suggest you consider working freelance or on a consultation basis if you only want to work part time. Both web development and iPhone development lend themselves well to freelance work. However, this may be difficult to get off the ground without first working in a shop. Difficult, but not impossible.

    It is definitely possible to learn programming on your own and part time. And no, it isn’t ridiculous at all to try and learn after 40. After all, the entire field changes every few years anyway, so we’re all learning as we go. It is the desire to work less than 40 hours a week that I think will hang you up. You might find it easier to learn on your own, get a full time job with a good company for a couple of years, then venture out on your own.

    Good luck :)

  33. Vanessa says:

    Q10: “So why don’t I do meetups and the like? The biggest reason is that most of the interactions I have with people are one-on-one interactions. They tell me some very private things about their lives and because of that, I’m able to help them.”

    Do you always have to play the role of counselor? What’s wrong with meeting with people just to have a good time? It’s called networking. You could possibly meet someone who could help you as well.

  34. I disagree with you on one part. You mentioned that it’s ok for you to lose 30k because you didn’t really need it. But how do you know one day in the future, that 30k could have helped you in a big way? Hence, it’s best to start investing (in your retirement) with a small amount of money.

  35. Gretchen says:

    #10 isn’t asking you to lead a seminar, they just want to say hello and have a chat.

  36. con says:

    I tried once but it got deleted (maybe my me?)

    Anyway… addressing Q#10) You can have a one-on-one with a meet up. You don’t have to stand on a stage and address everyone at once. The meet ups I’ve gone to are always the host walking around and talking with folks. I just shake my head sometimes on this stuff. Like #28 said, “it’s networking.” Aren’t you always talking about that? I’m not trying to be mean, but it just seems that it’s more like “do as I say and not as I do.” That seems to happen a lot lately. You have good stuff sometimes, but I think you need to regroup and find your focus.

    But, hey, it’s your blog and none of my business. Just my two cents’ worth.

  37. CindyD says:

    #10 It is a gaming convention, how would meeting a finance blogger be applicable to that event?

  38. Mister E says:

    I also read Q10 as asking about a casual meetup rather than a counselling session.

    I would wager that a good percentage of readers would be much more interested in a regular human conversation rather than in sitting under the learning tree.

    Some people just like to say Hi.

  39. valleycat1 says:

    #31 CindyD – re #10, I don’t think Kevin is wanting a financial advice session with Trent, just a chance to say hello since Trent keeps putting it out there that he’s going. A lot of bloggers do that, but I think #17 hit the nail on the head, Trent’s an introvert and has his different interests (finance & the blog, family, gaming) firmly segregated. So anyone associated with the blog is in his mind going to want advice.

  40. Tom says:

    Courtney – only if you get an -hole at the MVA. I’ve done it the other way with no problems, other than a threatening letter, but you list the correct order.

    I think Etrade is considered a “low cost” brokerage

    Josh isn’t really a spammer, he comments frequently here, usually not about life insurance. Maybe this post was a little disingenuous.

    Q7 might be able to pick up some freelance programming. Knowing some html can get you in with small local businesses setting up websites, etc.

  41. MattJ says:

    #24 Courtney:

    I got a fine in a similar situation to the one you describe from the state of Georgia. The sequence of events goes like this:

    I moved to Alabama with fully insured and licensed (in Georgia) vehicle.

    I needed to transfer my tags to Alabama. In order to do that, I transferred my insurance to an Alabama policy. (Same company, new agent) At this point (unbeknownst to me) my previous insurance agent informed the state of Georgia that I was no longer insured in Georgia and my county in Georgia immediately began preparing a fine for driving an uninsured vehicle with Georgia plates. Meanwhile, I immediately drove to the court house and got my Alabama plates – probably two hours later.

    A few weeks later, my ticket arrived, after being routed through the post office’s address forwarding system. I called my new insurance agent, my old insurance agent, and the Georgia county. None of them could tell me how I could possibly have transferred my tags without spending those crucial two hours driving illegally according to one of either Alabama or Georgia law.

    The matter was resolved when Georgia sent me some sort of form to fill out. I got out of the ticket by lying (after being no-so-subtly instructed to lie by the government lady on the phone in Georgia) on the form.

  42. Anne from Q3 says:

    Hi guys,

    Thank you all for pitching in and mostly, thank you, Trent.

    The reason I decided to ask Trent about this was because he seems to have a good and solid, rational view on life as a whole, and of course on personal finance.

    #2, thanks from your answer. You are right about saying that I often felt like I’ve lost mom as well. And I honestly underestimated the fact that I split up with my then-boyfriend.

    I guess it is because I always thought I was a strong person and could deal with anything… I guess that’s why I underestimated the effect of all things that happened, I only realized dad’s passing as a trauma but not the other changes.

    My mom went to therapy 18months ago (when dad passed away) but not me. I somehow figured we can’t both go to therapy. She used to cry so much, she was really depressed, and I guess I felt the need for me to stay “normal” as if nothing happened.

  43. littlepitcher says:

    @Dan–First thing is to get a letter from your physician detailing your problem. Call your insurance agent. Some companies will suspend driving coverage for a minimal premium and continue your comprehensive and collision coverage for driveway only–this is storage coverage. It will keep you insured enough to satisfy the DMV. If your state and insuror can’t do that, shop for a metered coverage policy. They will install a meter in the van, and you will only be charged for the time you drive the van or for a minimum premium.
    You will need that van if your condition continues to deteriorate and you require full-time caregivers with clean backgrounds and MVRs. May your condition take a permanent turn for the better!

  44. Courtney20 says:

    @ Tom – perhaps you’re right; I’ve never gotten the fine, I just know that’s how you’re supposed to do it because I owned three different cars in MD (and then moved one to VA) and they’ve always asked me at the plate return if the car was still insured.

    @ MattJ – that is very strange. When we moved from MD to VA this year we switched insurance policies and then registered our cars a day later without any issues. But we stayed with the same insurance company/agent – maybe that was the difference?

  45. Marianne says:

    Trent- I adore your blog and read it daily. I must, however, point out that suggesting to a person who is on a ventilator 24/7 that they go out and enjoy the fresh air, when he has already explained that he can’t, doesn’t show a lot of compassion.

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