Questions About Affordable Housing, Hidden Problems, Profitable Hobbies, and More!

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. Finding hidden problems with investments
2. Feeling bad about financial state
3. Finding a profitable hobby
4. People assuming that I’m rich
5. Affordable housing and jobs
6. Saving Christmas leftovers
7. Gift cards for unavailable restaurants
8. Thoughts on Dollar Shave Club
9. A path to moving out
10. Using leftover ham
11. Being happy with older car
12. Best books of 2015

For me personally, the week before Christmas is the most stressful week of the year. We’re filling in the remaining gaps in our Christmas wish list (“Did we completely forget to get a gift for that person? Oh… um…. any ideas?”). We’re trying to pull off a nice holiday meal and some interesting holiday surprises besides gifts. We’re cleaning like crazy. We’re usually traveling somewhere. We’re staying up late wrapping gifts and filling out Christmas cards.

And then Friday will come. Our children will come flying into our room at about five in the morning, jazzed from the adrenaline of Christmas morning. They’ll encourage Sarah and I to get up in a half-awake stupor to open presents.

Then we’ll spend the day enjoying our gifts, planning for an event with extended family over the weekend, preparing a really cool holiday meal, and (this year) trying to roast chestnuts.

In the end, the best part of all of it is simply being with those people. Seeing Sarah with her eyes still sleepy and a cup of coffee in her hand watching the children open gifts. Seeing our daughter crash at about eight in the morning because she actually woke up from excitement at about 2:30 in the morning and so she’s wrapped up in a blanket on the couch. Seeing my oldest son trying to convince us that he needs to go outside to try out his new outdoor sporting gear (and probably succeeding this year, as Christmas is supposed to see weather in the 50s), and then convincing me to go outside and help. Seeing our youngest son trying to sneak a cookie before dinner… and then trying to sneak another cookie.

Forget the presents or the meal or anything else. Those moments, right there, are the reason that even though it is so much work and often so stressful, I still look forward to Christmas.

Q1: Finding hidden problems with investments

Where do you start in finding any problems in your investments (outrageous hidden fees, the wrong investment style for your age group, etc.)? Is there a program you can enter this information into, or is it something I need to look at and research myself?
– Larry

The first thing I would do is visit a website that contains unbiased comparison info about mutual funds and other investments. Morningstar is a great example of this type of site and is my first stop for these kinds of comparisons. Just go there and look up your investments. I tend to give a fair amount of trust to Morningstar’s star rating for investments as a quick snapshot.

Now, if you’re asking questions along the lines of whether an investment is the wrong style for your age group, I’m assuming you’re saving for retirement. That kind of question is much more personal and much more difficult to answer because it ties into your target retirement date, your risk tolerance, what you’re contributing each year, and so on. In other words, it’s really hard to just find a simple tool that will tell you whether you’re good to go.

What options do you have, then? The best option is to simply learn as much as you can about saving for retirement. I’d recommend reading a good book like The Bogleheads’ Guide to Retirement Planning in order to get a firm understanding of the ins and outs of retirement planning. It will also help you assess things like your own personal risk tolerance and the types of risks you should have at your age and so on so that you have a good grip on your own needs.

Q2: Feeling bad about financial state

Whenever I read about someone else’s success on a personal finance blog, I end up feeling like a giant failure. How can I compete? What’s the point? The advice is good I guess but I end up feeling like I can’t measure up and that my own finances are such a mess that I’ll never be in a good state like you or the other writers.
– Alex

If you’re simply using personal finance blogs as a comparison tool for your own relative success or failure, you’re doing it wrong. One of the key rules of personal finance success is stop caring about what other people think¬†and how other people are doing. The only comparison that matters is the comparison to how you were doing a year ago. Are you in better shape than you were a year ago? If so, then you’re doing well, and the bigger the change the better.

The value of personal finance blogs isn’t in comparing your story to theirs, but in taking the advice that they have on offer and using it to improve your own successes. If you look at a frugal story and are blown away and intimidated by what those people are able to pull off, you’re wasting your time reading the site. What you should to is take a frugal story and ask what elements of that story you can apply yourself to improve your financial state.

Personal finance is personal. It’s about you. It’s not about anyone else. It’s not about comparing yourself to the Joneses. That comparison isn’t a fair one and is based on tons and tons and tons of assumptions that are mostly unrealistic. Just worry about yourself and improving your financial state year after year. The thing to take from blogs is the tips that you can use in your own life and the sense that you’re not alone in trying these things.

Q3: Finding a profitable hobby

Can you help me find a profitable hobby? I am looking for ways to make some extra income at my apartment. I am considering a second job but I need really flexible hours so I am looking for a hobby or really small business I can start that will earn some more cash.
– Danielle

If you’re just looking to directly convert your hours to money, I would look at things like Mechanical Turk, Fiverr, and Upwork.com. Those sites give you quick tasks you can do to earn some cash in your spare time.

The problem is that such sites don’t really scale up. You’re going to earn several dollars an hour (maybe more, maybe less depending on your skills) at your complete convenience, but you’re never going to build beyond that.

The routes to building up to a better hourly rate, though, involve making almost nothing for the first few thousand hours you invest. Blogging follows that model, as does making Youtube videos, podcasting, and so on. At first, you’re not going to make much of anything at all. It’s only later on where you’re going to start making some cash.

So, you have to ask yourself if you’re content to make several dollars an hour in your spare time starting right now but never really rising above that, or whether you eventually want to make more than that per hour but make far, far less at the start. That choice is going to send you down two very different paths.

Q4: People assuming that I’m rich

How do you deal with people thinking that you’re rich when you talk about retiring early? I made the mistake of mentioning my plan to retire around age 50 when we were at Thanksgiving and since then several different family members have contacted me needing “loans” for things. I told them all that I don’t make that much money and what I do have is locked in a 401(k). Now I find out that they all think I’m being “greedy” and hiding all of my cash and someone even referred to me as Scrooge McDuck.
– Dylan

First of all, your family sounds incredibly greedy. No one that isn’t innately greedy would dream of doing the things you describe here. There’s a huge sense of entitlement for the things you’ve earned for yourself, a level that I’ve never seen in my own family and would be very disturbed to hear them engage in.

If this were my family, I’d tell them to get lost without even skipping a beat, and here’s why.

During your life and during their life, you each made choices about how to use your money. You chose to save some significant portion of yours for the future and live a less affluent life. Your family members chose to save less for the future and live a more affluent life. That’s fine – everyone can make whatever choices they want.

However, their choice to live a more affluent life does not entitle them in any way to the benefits of your choice to live a less affluent life. Just as you don’t have the right to walk into their house and take their television and their iPhones and their computers and their furniture and so on, they don’t have the right to walk into your life and start tapping your savings and investment accounts.

You chose different paths in life, and that’s fine. However, that doesn’t give anyone the right to jump in and demand the benefits of another path without having chosen the drawbacks for themselves. To do so is purely greedy and self-centered and isn’t even worth dignifying.

Q5: Affordable housing and jobs

Just read this GREAT article about how every place where there is decent jobs there is no decent housing nearby, so you either have to have a very long commute or pay really high prices for housing.

Thoughts?
– Ellen

You’re absolutely right – that Atlantic article spells out the difficulty in finding a really good paying job. If you do get such a job, the cost of living near that job is usually astronomical because the landlords know that people will be able to pay that high cost. Your other option, then, is to live far away and then watch a healthy chunk of that money get absorbed into the expense of commuting and the time invested, too.

My honest response to all of this is that you should try as hard as you can to find a good job in a lower cost of living area, even if it means a lower salary. Being able to live close to where you work makes a huge quality of life difference as you’re not spending untold hours commuting back and forth.

That’s basically what I did after college. I got a job in a college town and then chose to live in a small town relatively nearby, giving me a 15-minute commute and really cheap rent. It ended up being pretty much the perfect solution for me and I think it would work well for many people.

Q6: Saving Christmas leftovers

Does it make sense to save leftover items at Christmas? Like the boxes that items come in and, if you’re careful, the wrapping paper on big boxes so you can reuse it next year? I have been doing this for years but my husband thinks it is silly and isn’t worth the effort.
– Lana

I think that it does save a little bit of money and it is certainly environmentally responsible, but I’m not entirely sure it saves enough money to make it worth the time involved.

To reuse the wrapping paper, for instance, you’d have to unwrap it really carefully, remove the tape from the paper, and then store the paper in a way that preserves it and so that you’ll remember it. Even then, the whole piece probably isn’t reusable. You’ll have to wrap something smaller in it.

For us, wrapped boxes that would be big enough to make it sensible to save the paper are usually wrapped in other means – usually a large plastic trash bag with a bow on it. That way, the trash bag can be reused for the other holiday scraps.

As for your strategy, I don’t think there’s anything wrong with doing it. I don’t think it’s a huge money saver but it certainly does save some money and it does create another use for wrapping paper.

Q7: Gift cards for unavailable restaurants

At our holiday get together last weekend I wound up receiving a gift card for Ruth’s Chris Steak House. I wouldn’t ordinarily mind that gift at all, but we live in North Dakota and the nearest Ruth’s Chris Steak House is in Minneapolis which is like five and a half hours away. I can’t imagine when I would ever use this gift card.

So what do I do with it? I thought about regifting it, but the only people that might receive it are people who also live in North Dakota and wouldn’t have much use for it.
– Charlie

This is one of the problems with gift cards like this. It’s a nice idea if someone happens to live near the particular business, but if they don’t, it’s truly a wasted gift.

Your best bet would be to sell it at a site like Cardpool. You’ll likely only get a sizable percentage of the face value of the card, but that’s better than getting nothing at all and seeing it go to waste.

Another option isn’t to directly regift it, but keep it in your wallet in a prominent place where you won’t forget about it and then pay attention to the people in your life. If someone you know or care about is going to Minneapolis or another city with a Ruth’s Chris, just hand them the card and tell them to enjoy a great meal.

Q8: Thoughts on Dollar Shave Club

Do you have any experience with Dollar Shave Club? Do you think it is a good deal or is it just another ripoff?
– Marcus

It depends entirely on what you’re comparing it to. If you’re comparing it to a cartridge razor from Gilette or another mass-marketed razor, it’s a pretty good deal. The blades and the razor are very comparable to a Mach 3 (a little cheaper as far as I can tell), for example, and the price is better and it just shows up at your door.

If you want something that’s comparable to a Mach 3 but higher in quality and shipped to you every month, you’d probably want to try something like Harry’s Shave Club. Their stuff is of higher quality, but the price is a little above what you’ll find on Mach 3 products in stores.

My recommended solution is to get a Merkur long handled safety razor and then order a box of double-edged razor blades each month. If you shave daily and only use a blade once, a box will last for 200 days for $12. No “shave club” or cartridge razor can even come close.

Q9: A path to moving out

I am currently 25 years old and single. I have a degree in aerospace engineering from a decent school but have been unable to find work mostly because I didn’t make good industry connections when I was in school As a result I have been living with my parents and working a full-time and a part-time job ever since graduating, keeping my student loans paid up and saving a little for the future.

I have been looking at moving to several different cities where I could have a good chance of finding an aerospace engineering job, but that means that I need to be in a financial state to be able to move out. I am looking for some guidance there. How do I judge whether I am financially able to do that? What do I need to do to get there?
– Vincent

The first thing I’d do is identify which city you’re specifically going to move to. Maybe you’re considering Wichita, for example. Whatever that city is, start researching it in detail. What does it cost to live there? What kinds of entry-level jobs are available, both in your field and otherwise? What can you do to get your foot in the door with aerospace, mechanical, and systems engineering firms in that area?

Once you know what it will actually cost to live there, start looking at your current financial state. Could you make it there for, say, one year with a service job given your current state of affairs? If no, keep saving for now.

Remember, your goal isn’t to live there permanently while working in the service industry. Your goal is to find a permanent position in your field within a reasonable timeframe or else move to somewhere else that’s more financially sound.

If you find you’re ready to give it a shot, start planning for a move and apply for some entry-level and service jobs there. Take whatever you can get, especially if the hours make it possible to get involved in career-related networking events. Maybe you can work a morning shift so that you can go to networking events in the evening, or maybe you can work nights and weekends so you can do an internship during the day.

The goal is to do everything you can to land the kind of job you want within that year timeframe, so don’t spend your evenings playing League of Legends. Spend as much time as you possibly can doing something that will help lead you into the career you want.

Q10: Using leftover ham

Every Christmas, we end up preparing a giant ham for our holiday meal. Every Christmas, we end up with a bunch of leftover ham.

I am always hesitant to do the obvious thing and cook a smaller ham because our numbers vary so widely. We have had as few as six at our Christmas dinner and as many as 30+ and we often don’t know the number until very close to the meal, sometimes the same day. We invite a lot of people and get a big mix of “yes” and “no” responses.

So most years we have a lot of leftover ham. What do we do with it besides fill up freezer bags with it?
– Jenna

In the past, we have saved leftover ham in the freezer, but we’ve first chopped it into tiny cubes and saved it in containers that contain eight ounces of ham apiece. We then would use those containers throughout the year for any recipe calling for ham, from omelets to fried rice.

For example, if we were making a recipe that called for a pound of cubed ham, we could just pull out two containers from the freezer and suddenly we have that ham on hand for the recipe.

The idea is really straightforward. We’re just making the ham as useful as possible throughout the year by making it as prepared as we can. That way, recipes later in the winter or the spring become really easy to pull off.

Q11: Being happy with older car

I know the financial advice on cars is to buy a late-model used car and drive it until it’s not reliable, but I am having a hard time doing that. As soon as a car gets around the 100,000 mile mark I start getting worried that the car is going to fail any minute. I’ll take it to mechanics whenever I hear any sort of noise (and most of the time it’s road harmonics) and I end up stressing and spending so much money on it that I just can’t see how it saves money for me.

I have a 2011 Honda that’s at 103,000 miles and I’m basically scared to drive it three hours for the holidays. I am going to have to trade it soon.

Other than the obvious “get over it,” how do you suggest saving money if I’m trading in my car at the 100,000 mile mark every few years?
– Kelly

As someone who is currently driving a Honda Pilot with about 160,000 miles on it and recently drove it from Iowa to Texas and back, I’m clearly of a different mindset when it comes to cars. To me, the time to replace a car is when it’s about to fail (based on the words of a trusted mechanic) or actually does start failing, to the point where repairs will exceed the value of the vehicle. I keep up with my maintenance schedule and ask a mechanic to look at the car regularly and keep me abreast of anything that may need attention. Because I have that word, I don’t really worry about it. A car has to show me it’s about to fail before I actually replace it.

I guess my best advice for you is to find a mechanic that you really trust, start letting that mechanic handle your car maintenance, and ask that mechanic to watch for anything that might be trouble down the road. Then, just trust that mechanic. When the mechanic tells you it’s time to think about big repairs, then trade the car.

It sounds to me like you’re a person who isn’t experienced with cars but you’re relying on that inexperience to judge whether it’s time to replace it. Trust a more experienced and knowledgeable judge instead.

Q12: Best books of 2015

What were your favorite books of 2015? Your lists from past years have ended up helping me find a bunch of great books at the library!
– Kevin

The book that had the biggest impact on me in 2015 is hands down Between the World and Me by Ta-Nehisi Coates. The book takes the form of a series of letters to his teenaged son. It is challenging and hard to read because it tackles racial issues in modern America in a very strong way. Some parts left me confused. Some left me bordering on angry. But all of it made me think about the world, and that’s the most powerful thing a book can ever do. A great book makes you see the world through different eyes and it makes you think about what you’ve learned from that experience, and if there’s a book in 2015 that pulls that off, it’s this one.

The book I perhaps enjoyed the most as a pure page-turner in 2015 was… well, I have to choose two of them. First, Jim Butcher’s The Aeronaut’s Windlass is an incredibly fun adventure set in a world that seems right out of a Jules Verne novel, with airships flying around in a crazy world much like Victorian England. It’s one of those books that’s just fun from beginning to end if you just let go and let yourself get sucked into the book.

The other one is Epitaph by Mary Doria Russell, who wrote perhaps the most haunting book I’ve ever read, The Sparrow, which I read almost in a trance-like state and has been in my thoughts ever since. Epitaph comes very close to matching that (it’s still in my mind after quite a while), but it’s set in a completely different world – it’s her retelling of the gunfight at the O.K. Corral. As with The Sparrow, she manages to make the whole situation incredibly, incredibly human and personal and yet so fascinating you almost can’t take your eyes off the page.

Those were the books I loved the most this year, at least of the 2015 releases I’ve read.

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

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