Questions About Bitcoin, Books, Fake Debt, and More!

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Investing as a group
2. Bitcoin thoughts
3. E$Planner thoughts
4. Healthy use of credit cards
5. Handling fake debt
6. Self-improvement book recommendations
7. Stepping back from work
8. Accounting software for freelancing
9. Meal prep day thoughts
10. Savings plan for next holidays
11. Negotiating job offer
12. Board games and bad behavior

Hope you have a wonderful day today, whatever it is you are doing.

I have just one tiny suggestion. If you’re celebrating today – or even if you’re not – think of someone that you really care about and just haven’t had a meaningful conversation with in a while. Ask that person how they’re doing and listen. Ask some questions and minimize talk about yourself.

You’ll feel better. They’ll feel better. The world will be a little better place.

Q1: Investing as a group

What is your opinion on group investments?

A friend of mine suggested this a few weeks ago. She’d like a group of us to each commit to investing between $100 – $500 every quarter in the stock market.

She’s still investigating what kind of stocks we’d invest in. (I suggested the S&P 500 Index)

I’m wondering if there are investment programs specifically set up to support this kind of investing.

We are all women in our mid to late thirties, most of us married with children.
– Mary

Unless you have an extremely clear written contract, this is a bad idea that has a very high likelihood of ending up with some people getting ripped off. Do not pool money with others without a strong legal structure behind it. Period.

For just the most obvious example, what happens when one person wants to leave the group and withdraw their funds? As you describe it, this relies on one person withdrawing the money and giving it to the withdrawing member. There’s also tax ramifications which are going to become really messy.

If you like the idea of an investing club, I suggest all of you have your own individual investment accounts and you meet regularly to discuss investments and you can match what everyone else is doing within the club. That way, if you choose to withdraw, you can do so without a big mess.

Q2: Bitcoin thoughts

Been watching Bitcoin go up and down like a yo-yo for the last month or so. Thoughts on it or other cryptocurrencies?
– James

Bitcoin, for now, is a commodity without a real world use. Think of it as being like gold, except you can’t use Bitcoin for real-world manufacturing.

It is a medium of exchange, but only in a very limited way. You can’t take a bitcoin to the grocery store and get food other than in a handful of exceptional situations.

I think, 100 years from now, we’re going to look at Bitcoin as the first step in a radical change in how we secure our identity and our money, but Bitcoin itself isn’t there yet. For now, it’s just a wildly speculative investment on the back of a really fascinating idea.

Q3: E$Planner thoughts

Have you ever tried/reviewed/suggested E$Planner? They let you do “what-if” tests on how financial decisions affect your lifetime trajectory, accounting for all (current) federal and state taxes. For example, it would be simple to test putting all retirement savings in regular IRA/401ks or maxing out Roth IRAs and putting the leftover in regular.
– Max

E$Planner is probably the best all around free financial planning calculator out there, but it definitely is one of those software tools that dumps you into the deep end of the pool. It requires you to have a good grasp of your finances – it doesn’t really walk you through anything and expects you to understand what you have. It doesn’t hand hold at all, though it does have a ton of documentation.

However, if you’re willing to push through that, it’s a great piece of software.

I basically view tools like these as being very through Excel spreadsheets with some nice data entry options. There’s almost nothing in them that you couldn’t do in Excel, but these tools have all of the formulas set up already for you so you don’t have to figure them out. E$Planner definitely falls into that category.

Q4: Healthy use of credit cards

Surprised that you have credit card ads given the things you write about.
– Jeremy

Honestly, I have no real opposition to credit cards. I view credit cards as being akin to a very sharp knife – they are incredibly dangerous if you don’t know what you’re doing, but incredibly useful if you do.

They’re dangerous because they make it so easy to overspend if you lack attention and discipline. This is much like a sharp knife – if you lack attention and discipline, you can cut yourself badly.

If you have that attention and self-discipline, then they’re incredibly useful. If you keep your bill paid in full every month, then it’s more convenient than using checks or cash for you regular purchases, plus there are a lot of cards that basically pay you for using them.

If you’re struggling with discipline, put down the card and live off of cash until you build some better self-control. If you have that self-control, then a good card is probably going to be useful for you.

Q5: Handling fake debt

Thought you might want to discuss this in a mailbag response……vengeance
– Charlie

When I read this, I can’t help but think that it’s simply explaining a giant problem in how the modern world currently handles debt and why the internet is still immature in terms of identity and data.

It also really identifies another problem in dealing with payday lenders. Because of the business they’re in, they often operate in a cutthroat fashion to get loans repaid.

It also points to an additional problem with poverty in America. Scams like this almost exclusively target people who cannot fight back legally or financially, which makes it even harder for them to escape a bad financial situation.

This is well worth reading.

Q6: Self-improvement book recommendations

Looking for books to put myself in a better place in the coming year. I lack discipline and goals. I want to have more friends and a better job in my career path (engineering). I also want to feel more in control and less down all the time. Ideas?
– Marvin

There are a lot of books that I think match up well with what you’re looking for. Here are three I think will really click with you.

The Subtle Art… by Mark Manson makes the core argument that, rather trying to turn life’s lemons into lemonade, one should learn how to stomach lemons better. Setbacks are part of life – learning the right stance means that they won’t knock you over. I think that’s a key first step. Be aware – this book uses a lot of rough language.

Principles by Ray Dalio is a very solid book about defining one’s own principles and figuring out how to live by them, something else I think you’re trying to strive for. This is a long one, but well worth it – read it in chunks and think about how it connects to your life and what your core principles are.

The final book I’ll suggest is Extreme Ownership by Jocko Willink and Leif Babin, which is one of the best books I’ve ever read on self-discipline. You own what you do – it’s not someone else’s fault if you choose to sit on the couch. Highly recommended.

Handling adversity. Having self-discipline. Having core principles. That’s foundational stuff, and if you nail that, you’ll find it much easier to build the life you want.

Q7: Stepping back from work

My husband and I make about $200,000 together. We live in Champaign, IL. Fairly inexpensive but property taxes are about $8,500 a year. We downsized significantly about a year and a half ago. We have five children, one of which requires daycare. We own our house outright. Our only loan is a loan for our van which I plan to start paying down. We set aside $1,000 a month for our children’s college accounts, and my husband and I max out our Roth IRAs. My husband also adds $18,000 a year to his 403b. I would like to cut back at work. If I cut work out completely, it would cut our income in half. We save a lot, but I still wonder why we would find it difficult to live on $95,000. Any ideas?
– Carrie

Budget what your life looks like if you choose to leave your job. What exactly does that look like? Where does every dollar go if you leave? Can you live like that?

I can’t answer that for you without intimately knowing your life and your life choices. However, living in a Midwestern college town with no mortgage and home ownership on $95,000 a year should be doable, even for a family of seven. It just may require making some choices that you don’t have to make right now.

Just sit down and budget it out. What exactly can you cut to make it down to $95,000 a year? What will you “make up” by not working – more meals at home, perhaps? No commuting costs? All I can tell you is to make a budget and take it seriously; that process will tell you whether it works or not.

Q8: Accounting software for freelancing

I am about to dive into freelancing. I have a few offers already on the table and have formed a LLC already. Looking for suggestions on accounting software, also on how to pay yourself.
– Stephen

I would use Quickbooks if you’re primarily going to be entering data on a desktop computer or a laptop, or Freshbooks if you’re entering data primarily on a mobile device. Quickbooks is a better all around package, but Freshbooks works better on mobile and isn’t all that far behind.

I will say that you may not want to jump into accounting software right at the start. If you’re only handling a client or two to start with, just keeping track of everything in a really basic spreadsheet is probably the best way to go.

I personally use my own spreadsheets that I made up myself, but I’m kind of a spreadsheet junkie.

Q9: Meal prep day thoughts

So I did a meal prep day and it took almost all day to prep 20 meals. That does not seem time effective to me. All I am basically doing is moving all of the time making meals during the week to the weekend and I lose a weekend day just to save 15 minutes 20 times during the coming month or two. Not a tradeoff.
– Tammy

It really depends on what you’re prepping and how you do it. There are definitely some meals that are more conducive to meal prepping than others.

Some great signs of a good meal prep meal are meals in which you can do a key step for all 20 meals (or however many you’re doing) at once. This is why I like making meals with rice in them, as we have a 1.8L rice cooker that can cook enough rice all at once for a bunch of meals. With meals that use pasta, like lasagna, I can just get out our huge stock pot and cook several boxes of lasagna noodles at once.

Ideally, you can reach a point where you can use an assembly line to churn out a whole bunch of finished meals at once. For example, when I make several lasagnas at once, I just set out lots of noodles, sauce, cheese, and other ingredients, set out several pans, and just do the same thing in each pan over and over. Then I do it again with several more pans.

It’s that synergy that saves time. If you’re just making one meal, then making another meal, then making another meal, it’s not saving you much time at all. It’s when you combine tasks or set them up so that you only have to do setup and takedown once, that you end up saving a lot of time.

Try doing a meal prep for several pans of lasagna at once. If there’s ever a meal that’s easy to do meal prep with, it’s that one.

Q10: Savings plan for next holidays

What is a smart way to save ahead for next Christmas? Want to start saving now. This holiday season is killing me and having money set aside for it would be great!
– Dana

How much did you spend on holiday gifts this year, in total? Divide that by 50.

Then, take that number and set up an automatic transfer from your checking account to an online savings account. If you don’t have one, open one at Ally or Capital One 360 – both are perfectly good for this.

If you start now, what’ll happen is that every week, that amount will be slurped out of your checking account into that savings account. Late next year, just transfer the full balance of that savings account back to your checking account and use that for holiday spending. It’s as easy as can be!

Q11: Negotiating job offer

In September, my company went out of business – nothing to do with me, all to do with a corrupt son of the owner. Anyway, I’ve been unemployed ever since, but I recently got a job offer for just below the average salary for people in my field in this area. I really need to get back to work, both for the pay and so my skills don’t die off. Should I negotiate at all?
– James

If I were you, in your situation, I wouldn’t negotiate a higher starting salary in a position that’s at the average in your area as a starting salary. Instead, what I would do is talk about performance.

Right off the bat, I would ask for performance-related incentives. If you do a really good job by whatever metric is used in your field, you will earn a nice raise at your next review.

In other words, if you can show you are an exceptional employee, you quickly earn a raise.

I don’t fully buy into the idea that “the worst they can say is ‘no’” when negotiating a salary unless you happen to be in a field where it’s very easy to find work in your area. The rules change when there are more good candidates than good jobs; but playing hardball without evidence of your skills generally starts you off on the wrong foot.

Q12: Board games and bad behavior

Thought you might enjoy this article! Is that how you act when playing board games? HA!…board-games…worst-us
– David

Board games tend to bring out people’s true behavior. If people have some bad character traits, they will often show up in the midst of board games.

Why? It draws your focus away from maintaining your “public face.” You let your guard down a little because you’re focused on the game (or, at least, if you allow yourself to get focused on the game).

That’s actually one of the things I like most about playing board games with people. It really does a good job of revealing some inner characteristics. It’s incredibly effective in terms of building meaningful relationships, in my opinion. I’ve built many of my best friendships around the table.

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.

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.