Reader Mailbag #9

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

As usual, we’ll start things off with a few links to older articles that directly answer questions I’ve heard recently.
The best personal finance book I’ve ever read

What The Gap can teach about sound personal finance management

What you should do if you think I’m wrong

And now for some great reader questions!

Is Nutrisystem a cost-effective way to loose weight?
– Janie

what is your favourite vegetarian frugal recipe, for us vege people?
– Kelli

NutriSystem is basically paying someone to cook for you, except that the meals they prepare are capped very tightly in terms of fat, calories, etc. However, for the quantity you get, it’s pretty expensive – more than $10 for three tiny meals prepared in a factory. In other words, when you buy NutriSystem, you’re buying convenience, not food.

If you’re actually committed to losing weight, you can do all of this yourself for much cheaper if you’re willing to devote a weekend to it. Just prepare a bunch of healthy meals in advance and then go through them throughout the month. It’s NutriSystem without the high daily cost.

Here’s an example that illustrates what I’m talking about and also answers Kelli’s question. I LOVE bean and rice burritos. What I’ll often do is boil up multiple pounds of beans and a bunch of rice, then make 32 burritos at a shot. Lay out the tortilla, put beans on it, put rice on it, put a bit of cheese on it (that’s out for lactose-avoiding types), put a bit of lettuce on it, put a bit of salsa on it, wrap it up, and then wrap the burrito in Saran Wrap. I fill up a box of these and put them in the deep freeze. Any time I need lunch and there’s no leftovers, I eat a couple of these bad boys – two minutes in the microwave and they’re ready to go. They’re healthy, higher in quality than NutriSystem, have the same convenience level, and cost about 10% as much.

What’s your handicap? And if you don’t have one, what do you usually score?
– Chris

I have a handicap of 29 – for those unaware, that means that a trained chimp could beat me on a golf course.

My weakness is my driving – the problem I have is that I’m rather tall and when I was learning to golf, my driver was simply too short, so I learned how to drive very awkwardly and I’ve not been able to correct it as of yet. So pretty much every hole either starts off with me using a middle iron or me hitting an atrociously bad drive with my driver. Get me within 100 yards of the hole, though, and I’m much, much better – chip shots are by far the best aspect of my golf game.

If I’m so bad, why do I play? It’s fun. I truly love golfing with friends and family on warm summer afternoons – being out on the course with a club in hand is a lot of fun for me.

What is the best way to pay down my mortgage? My bank offers many options, and I’m not sure which is the best…make a payment every two weeks all year or divide my mortgage pmt by 12 and pay 1/12 against the principle or just make an extra payment each year? Is one way more effective than the others?
– Cheryl

The best method for eliminating a mortgage is to get one with the lowest interest rate possible. That might mean higher payments if you get one with a shorter term, but it’s better in the long run.

Once your mortgage is settled, the best payment plan is the one that gets you the most principal reduction over the course of a given year, but any fees you have to pay weigh against that. For example, some banks charge extra fees for alternative payment schedules that might put you in better balance shape at the end of the year, but the fees eat that up and more.

Go to your bank and ask them what payment plan reduces your principle the most over the year without incurring any extra fees. If all else is equal, choose the one that has the lowest total payments for the year, because that’s the one that’ll have you giving less interest to the bank (and thus keeping that money in your pocket).

If you didn’t have a wife and children, who would you leave your assets to? I am hesitant to leave my assets, life insurance, etc. to my family because of their lack of fiscal responsibility. That has created a quandry about where I will leave the money. Right now I am considering college funds for the children of close friends.
– Jeremy

I would either leave my assets to children I care about or to a charity, one or the other. I think it depends on your personal beliefs and also how many children your close friends have – and who you define as a close friend.

I think if your circle of close friends is clearly delineated and you wouldn’t be leaving anyone obvious out, I’d split your assets among those children evenly. If you’re going through a thought process where you think if you include this one, then you have to include that one, then either cut it very tightly or give the whole thing to charity, because even though you’re giving the money with the best of intentions, it might not be seen that way when you’re dead and gone and people are feeling hurt and resentful because they didn’t understand.

If you’re in deep doubt, just give to a charity.

I see now how you

earn money from blogging and I understand that I shouldn’t click on ads. I’d still like to help out. How else can I support The Simple Dollar?
– Ted

There are several things you can do that would really help The Simple Dollar. Here are six.

Buy a downloadable and share it with your friends. Over the last several months, I’ve created four downloadable electronic books that are basically just collections of the best posts from The Simple Dollar – you can download them in PDF format for $2 each and freely email them to your friends, print them out, or do whatever else you want with them. Find out more about each of them: 31 Days to Fix Your Finances, The One Hour Project, Twenty Big Ideas, and Building a Better Blog.

Buy my book when it comes out. I hope that it’ll be out on bookshelves by the end of the year. It’s going to have a good price point (read: relatively inexpensive right off the bat) and be filled with a lot of the type of stuff that people like from The Simple Dollar.

Send articles to friends. If you read an article here you like, send it to a friend. There’s a link at the bottom of each article that says “Email this.” If you know someone who would like a particular article, click on that link and send it to them. That helps me by helping me reach more readers.

Participate on social bookmarking sites. Another big way I reach new readers is through social bookmarking sites like stumbleupon,, and digg. If you see a post you like, click on one of those links at the bottom of the article and bookmark me on that social site – it helps new readers find my best articles.

Participate by commenting. If you have a thought about a post, leave a comment. That makes the conversation more interesting for everyone involved, including me.

Let me know of any writing opportunities that come along. I’m always looking for strong opportunities for my writing. Right now, for instance, I’m attempting to jump-start a newspaper column. If you know of any great opportunities like these, please let me know.

These ideas aren’t just true for The Simple Dollar – they’re true for any blog. Most of the blogs you see are written by independent folks who are trying to make it on their own – for example, I’m a one man band out here in Iowa doing this without the support of a big media company. That gives me freedom to say whatever’s on my mind without running it through a corporate filter – but it also means that it’s risky to be doing this. Bloggers rely on the support of their great readers – The Simple Dollar wouldn’t keep on truckin’ without you guys.

What is your opinion of consignment and other forms of re-sale like CraigsList and EBay? I understand that during your financial meltdown, you resorted to selling items on Ebay. Are they a useful money saving tool or do they breed materialism and the urge to buy unnecessary things?
– Allison

I think it cuts both ways, depending on how you use it. For the most part, buyers on eBay and Craigslist are buying stuff they don’t really need, but that’s part of freedom – people get to choose how to spend their money. The only time I use either one is when I’m trying to buy something specific – merely browsing either one is a quick way to find yourself spending money that you shouldn’t be spending.

On the other hand, it’s a great arena for sellers. It allowed me, sitting out here in the middle of nowhere, to make a solid return on some of my DVD boxed sets that I sold. Without eBay, I would have had to sell them at a used media store and probably would have made very little back on them – because I was able to connect directly with a buyer, I made significantly more.

In other words, I think eBay/Craigslist are fine except if you’re just browsing through it looking for something to buy. It’s just like grocery shopping – you should only go there if you have something you need and you should focus only on getting what’s on your list. Everything else is just a distraction.

You’ve said that you support Obama. I’m curious as to your stance on socialized medicine. Oops, I mean “Universal Health Care”. How does that line up with your views of the government keeping out of the lives of individuals?
– Jon

I support universal health care only for people who can’t get it themselves – children and the disabled. I’m fine with there being a government-run health insurance solution that collects appropriate fees to pay for itself and allows everybody to opt in at a reasonable price, but it should be an “opt in” or “opt out,” not a requirement. Since Obama’s plan offers the option to opt out, I feel much more comfortable with his plan than Clinton’s plan.

For people that might want to turn this into an Obama versus Clinton versus McCain debate, please don’t. As I’ve stated before, I support Barack Obama because his stances on the issues most important to me (government transparency, protection of civil liberties, a much less interventionist foreign policy) are far closer to my own than Clinton or McCain. To me, it’s cut and dried and based on issues. Truthfully, I could care less about Reverend Wright or sniper fire in Bosnia or McCain’s wife’s corporate jet – if you’re talking about that stuff, you’re ignoring what actually matters.

I feel pretty strongly about children, though. I think it’s wrong to not provide free health care and a quality education to a child just because he or she was born in a disadvantaged situation. The tools of success should be available to all – let the difference be what they choose to do with those tools, not mere access to them.

It’s easy to say it’s not your problem, but it becomes your problem when a child is denied access to those tools of success like good education and good food and good healthcare and then turns to antisocial behavior out of desperation – that has significant costs, too, in the form of increased police budgets, increased welfare budgets, and so on.

Education is an investment, just like economic stimulus is an investment. The only difference is which of those two can be most easily sold to the average voter – and children don’t get to vote.

Do the visits your site gets diminish on weekends? Why do you think that happens? Do you post on weekends? And about the comments: in the beginning, when you wrote like crazy and had few readers, did it bother you when you got almost no comments?
– Lola

Traffic diminishes significantly on the weekends, but that’s true of internet traffic in general. People are at work during the week. Some people read The Simple Dollar at work for their own edification. Others are doing Google searches for their job and wind up here. Both of those groups are generally present during the week but almost disappear on weekends. Because of that, I generally write two posts every day, but only write one on Saturday, which is the slowest day of the week for traffic.

As for comments, I mostly use them as a rough thumbnail sketch to identify whether something’s successful or not. Early on, anything that drew a comment was a success. Now, I view anything with fewer than twenty as something I shouldn’t repeat and anything with more than 100 as something I should look at again for future ideas.

The biggest difference is that now there are so many comments I can’t possibly keep up with reading each one. I try to keep up with the comments on the newest post or two, but older posts attract comments all the time and I simply don’t get to read them. There’s too many. To me, that’s a very good thing – it means that to some degree The Simple Dollar is almost alive to the point of being out of my hands. The readers and commenters in some way push it along now – the average post now draws many more words in the comments than in the post.

What benefit can someone get from learning new languages (french, spanish, etc..) specially if he is not willing to travel to a foreign country or at least it is not one of his current goals?
– Reem

Learning anything for the sake of learning it is a good thing – it forces your mind to stretch and exercise in new ways. I do all sorts of things to keep my brain in shape, from reading historical biographies to teaching myself differential equations (seriously, I’ve done both in the recent past). If you’re scratching your intellectual itch, it’s a very good and healthy thing.

Besides that, the biggest benefit of learning a foreign language is to understand that culture. I myself have attempted to learn French in the past, both spoken and written, but that’s primarily driven by a desire to travel.

Naturally, though, you’re probably better off gravitating towards learning things that may in some way help you professionally. Will a foreign language help you professionally? It might in some situations – you might be able to help your organization relate to people that would otherwise not be in the loop, for example. This isn’t necessarily the definitive factor, but it can nudge you in the right direction.

If it’s a strong intellectual itch, though, scratch it. Learn something new. It’s good for you.

I was wondering how protected my investments actually are. Let’s say I buy Coca-Cola stock through Scottrade, and Scottrade goes belly-up. Does anything happen to my Coca-Cola stock? Also, let’s say I buy a mutual fund through Vanguard, and Vanguard the company itself is going out of business, how would this affect the fund offered through them?
– Tim

For individual shares, it depends on your broker. Most of them are heavily insured to protect their clients. You have to read through the fine print of your agreement with that broker – and you should always keep good records, just in case.

As for Vanguard, the Investment Company Act of 1949 protects you. When you buy a mutual fund share from Vanguard, you own an asset, out of which they’re only allowed to take out the amount expressed as your expense ratio. They can’t touch the rest – they can only manage it. It’s explained well in this post over at My Money Blog.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.

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.