Questions About Crowdlending, Prayer, Christmas Trees, Chess, Beans, 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 for child’s future
2. Crowdlending investments
3. Shorter workweek thoughts?
4. Struggling to improve at work
5. Last minute holiday gifts
6. Praying for financial help?
7. Child care suggestions
8. Christmas tree suggestions
9. Learning chess for cheap
10. Keeping beans fresh
11. 401(k) help
12. I never want to retire

I get two or three requests a week from a reader asking to reprint an article I’ve written for some purpose. So, here’s my policy on that.

If you wish to reprint an article of mine for a print publication or an email newsletter, not a website, you have permission to do so provided that you attribute the article to Trent Hamm at The Simple Dollar and include the URL of the site, http://www.thesimpledollar.com/. If you are interested in a reprint on a website, ask me first.

Make sure that the article was actually written by Trent first, however, by visiting that article on the website and verifying that Trent was the writer of that specific article. Some portion of articles that appear on the site were written by other writers and you’ll need to ask them individually for permission.

On with the questions.

Q1: Investing for child’s future

I have a young kid (6 years old) and I’d like to invest a little bit for him in a set and forget fashion. I realize I’m pretty lucky to be living in an expensive place (Seattle, WA) while being able to max out my 401k, my Roth IRA and my wife’s IRA. We don’t have any loans, pay off out credit card monthly and just have a home mortgage with low interest.

I am still able to put a little bit of money regularly on a brokerage account and a 529 for my son (although I don’t want to put too much for a few of reasons: I don’t know if he’ll go to college here (expensive) or in France where I’m from (cheap), I value community college highly and don’t necessarily aim for him to go to ivy league schools and finally I don’t believe in taking at my charge all his higher education expense.

My only downfall here is that I feel a bit behind on retirement because I moved to the US AT 26 for a temp job that became permanent at 32 and only understood 401k since I was 34. I’m been maxing out ever since. I definitely have the saving mentality that we find Europeans!

In essence, we live on about 40% off a single about 110k/year (my wife works for a non profit and brings an income that pretty much only pays for her laptop, cell phone, car gas and child care once in a while for us to go on a date). With that in mind, what could be our next smart moves (I feel that is not often addressed for people that are able to to reach all the conventional goals we see out there but don’t fit in the high income category where advance money placement and tax schemes can be beneficial).

So my questions are two folds:
– what is the next smart move for us (just keep investing in the Vanguard Total Market Index Fund?)
– what can I do to invest long term for my son? I was hoping for an IRA but he is not earning income. Is the anything else?

– Bob

First of all, a 529 might still be useful for you even if your child goes to school in France, provided that he’s attending a college or university that’s eligible for Title IV student aid. There are hundreds of overseas universities and colleges that are, so you’ll have to research the ones he’s considering.

If you’re not strictly saving for education for your son, however, your best bet is probably what you’ve already stumbled on – gifting your child a certain amount each year below the gift tax exclusion limit ($14,000 a year) and then investing that money in a taxable account in your child’s name while again gifting your child enough to pay any taxes on dividend income. This is of course assuming that your child is not earning an income of some kind via modeling or acting or something akin to that.

For us, our savings for our children’s future is strictly in the 529 plans. Once they move out and go to school, their 529 plans are our financial support for their education. We hope to have enough in each account to cover in-state tuition for a few years at a state university (like Iowa State U or University of Iowa), though they can make other choices in terms of where to go to school should they wish too.

Q2: Crowdlending investments

What do you think about crowdlending investments?
– Carly

Crowdlending refers to any program in which individuals can lend money to other individuals or businesses, supplying the capital for the loan and earning a return on that money in the form of the borrower’s interest paid on that loan. Typically, many people provide small amounts to make up the capital for that loan – for example, someone might want to borrow $10,000 and that loan is made up of 100 people lending $100 each. A number of businesses exist to help facilitate this, such as Lending Club and Prosper.

It really comes down to the riskiness of the borrower. Someone with a high rating as a borrower represents pretty little risk and you’ll almost always get your money back and more. A high risk loan might net you a very nice return, but you have a real risk of losing your balance.

In general, I would not invest money I needed going forward in a crowdlending investment. It’s a good place to put money that you don’t need if you’re seeking a nice short term return on it and you’re willing to pay a lot of attention and take on some significant risk. Remember, if someone defaults on a crowdlending loan, that means you’ve probably lost most (if not all) of what you’ve invested.

Q3: Shorter workweek thoughts?

What do you think about this article that argues that people 40 and over work better if their workweek is shorter? It matches my own experience. This one?
– Jenna

I frankly agree with it. Speaking from my own experience, I find that the vast majority of my work gets done during three days a week. I tend to have about three days each week when I can really slip into a writing zone, and my “work” on other days is often just busywork.

I think this is honestly true of most information and creative jobs. For every day of really great mental performance, I think people of all ages need at least a day of rest to recharge fully. If you demand mental performance day after day, that performance is going to degrade fairly rapidly and eventually result in burnout.

The trick for me is in properly preparing for a three day week and getting it reliably without interruption due to personal or family illness or some other interruption. Part of why I write for a living is the flexibility of it, which means I can’t just sit down and lock down three specific days of writing each week. Often, I have to break it up more than that.

Q4: Struggling to improve at work

I currently work as a bank teller. Went in for a performance review in October and read your advice about asking what I need to do to get a raise or promotion. Boss was great and gave me a list of things to work on. Thing is I’m always busy and rarely have the chance to work on a lot of those things. I feel like I’m not making progress on any of those things and can’t find time for them. Not sure what to do.
– Bailey

The best thing you can do is find opportunities to work on those skills in the course of your regular tasks. Without knowing your regular casts and the things that your boss suggested that you work on, I can’t offer specific advice on that. However, there are probably at least some of the elements on that list that you can work on while doing other tasks.

If there’s new material to learn, do your best to learn it when you’re not at work. If there are topics you’re supposed to know about, spend time when you’re not working learning those things.

You should also try to get into a routine of having regular scheduled one-on-ones with your supervisor just to talk over how things are going and build a stronger relationship. If you’ve not really communicated in any way with your boss in two months, you might want to strengthen that relationship a little. Just ask for a regularly scheduled meeting once every two weeks or once a month and go over the things on that list. This gives you a deadline to push toward a little more effort on those things, and it shows your boss you’re consistently trying to work for the brass ring.

Q5: Last minute holiday gifts

So my mom got sick and asked if I could host family Christmas and I said okay. In the past we did a name drawing for gifts but she also got everyone something small and she’s not doing that this year but I want to do it so I am looking for good ideas for last minute small holiday gifts under $5.
– Amy

What kinds of things did she give out?

At that price point, I’d probably go for consumable items. Get people nice bars of chocolate or a bottle of craft beer or something like that. You’re not going to go fancy at $5, but you can find something the recipient would enjoy.

Just make a list of everybody who’s attending and try to identify one food or drink item each one of them would like. There’s your shopping list, and that’s exactly what I would do in your shoes.

Q6: Praying for financial help?

I pray and pray for financial help and it never seems to come. We never make ends meet. I try to follow your advice and things always turn out badly.
– Jaime

A simple suggestion: rather than praying for financial help, pray to have the strength and wisdom and focus to make the difficult choices needed to put you and your family on a better financial path.

Don’t pray for money to be dropped on your lap. Instead, pray that you’ll have the foresight and wisdom to not spend money on foolish things. Pray that you’ll feel lower stress and that you’ll be able to lower the stress of those around you. Pray for the creativity to make your meal budget stretch a little further.

Most of us already have the financial answers we need already in our life. We just need someone (or something) to take the scales away from our eyes so that we can see those answers. That change often comes from within, not from money from outside sources. Money drops into our lap more often than we think it does – what matters is how we use it.

Q7: Child care suggestions

Moved to new city and starting school in January. Have a three year old. Thought there would be child care support through school but all slots are full. Program will subsidize child care but everything within subsidy is kind of scary. Suggestions?
– Danielle

I have helped Danielle many times over the last few years. For some background, she was engaged to be married but her soon-to-be husband ghosted her and she can’t find him for child support. She moved in with her parents for a brief while, then found an apartment on her own. She applied for a bunch of scholarships to go back to school and then I hadn’t heard from her in a while until this question popped up. She has been using many different programs to help give her kid a great life and working her tail off, so I do have some real sympathy for Danielle’s situation.

Danielle, you absolutely need to check and see whether your state has some sort of child care assistance offered through their Department of Human Services. Given your situation, it’s very likely that you’re eligible for some help through such a program, which is available in a lot of states.

Another approach you might want to consider is whether or not you have a close friend or relative you trust who could move in with you and provide child care in exchange for free rent. Do you have a sibling or close friend who might be interested in such a situation that you’d trust?

Those are the two best options I have in mind, other than making sure you’re on the waiting list for child care options through your school. This will get somewhat easier when your child reaches school age, as you’ll both be able to go to school!

Q8: Christmas tree suggestions

Is a real Christmas tree worth it? We usually only decorate for a few days before Christmas and the twelve days after taking things down on January 6. Used a tiny artificial tree for the last few years and we’re considering a real one this year.
– Arne

It depends on how you define “worth it.” Real trees are messier and take more work (because you have to water them) and need to be disposed of after the holidays; artificial trees have none of that. Plus, real trees have to be replaced every year.

From a purely financial standpoint, real trees aren’t “worth it.” However, real trees have an enormous aesthetic advantage. They smell wonderful. When properly cleaned up, they look better than artificial trees (in my opinion, assuming you don’t buy one that’s half dead).

Is the work and the (eventual) extra cost worth it to you? For some people, it is. For some, it isn’t. We had a real tree for a few years when I was growing up and while I appreciated it in my teen years, it wasn’t life changing for me. As an adult, I probably would not have a large real tree unless my children were genuinely excited about the concept and brought it up frequently.

Q9: Learning chess for cheap

My five year old was taught chess by his cousin at Thanksgiving and now he wants to play chess all the time. I can fumble through the moves but he is finding stuff on his tablet about openings and stuff that I have no idea about. I want to get better at chess and also help him find things to help him get better at chess. What tools are cheap/free?
– Andy

It really depends on your goals with this. If you’re just wanting to get a bit better and assume that this is a fad that’s going to burn out, I’d just get an inexpensive chess app for his tablet and for your phone and just play lots of games. Most games have a feature where they suggest good moves and point out bad ones and over a lot of games, you can gradually learn from that.

If you really want to start learning openings and stuff, there’s almost nothing better you can do than visiting your local library that has a selection of chess books, picking out a few, and then going through them at home. My local library has a couple dozen chess books on the shelves and can reserve hundreds more via interlibrary loan.

Take them home and then just try an opening during a game with your kid. Pick one that looks like fun, memorize the first three or four moves of it, and bust it out with your son. Tell him what the opening is and then see whether or not it looks like you’re in good shape.

I have an eight year old that loves to play chess constantly but really has zero interest in actually learning the game. If your son is into openings, play into that and use it as an opportunity to learn together.

Q10: Keeping beans fresh

You mentioned cooking beans early in the week and keeping them in the fridge all week to use for meals. How do you keep them fresh and not just turn to mush? Every time I do it they get mushy.
– Blair

First of all, don’t cook them quite all the way to completion. I try to aim for beans that are not quite all the way cooked, just done enough so that they wouldn’t be annoying in the dish but clearly could use just a bit more cooking. They’re really firm at this point but definitely edible.

I drain them and let them slowly cool down to room temperature. This usually cooks them just a bit more so they’re pretty close to exactly what I want. I drain them and rinse them again so that they’re close to dry, then I put them in a sealed container in the fridge. I aim to use them within four or five days.

Most of the time, I add these beans late to something else I’m cooking, like a soup. If I’m using them in a salad or something, I might cook them just a bit more in some simple fashion, like with a bit of water in the microwave, but I’ll usually just toss the beans right into the salad.

This works for all kinds of beans. My personal favorite is black beans, which I’ll use for pretty much anything I can get away with.

Q11: 401(k) help

I just signed up for my company 401(k) and there are only a few options available and none of them match up with anything you have ever mentioned. They have names like “aggressive growth” and “moderate” and “safe.”
– Alex

Likely, the options you see are ones that whoever runs your 401(k) have pre-chosen for you and given “friendly” names that actually make it harder to figure out what they actually include. The first retirement plan I signed up for was very similar in that regard.

You can ask the HR representative that deals with the plans whether or not you can pick your own funds, but it’s likely that you don’t have such control, so you probably just have to choose one of these options.

The honest truth? In a situation like this, it’s really hard to pick the “best” option for you because you don’t really know what’s going on underneath the options. In your shoes, if I was more than ten years from retirement, I’d choose the most aggressive option available. If I was less than ten years, I’d choose a moderate option. That is, assuming I couldn’t see anything more about the plans than such vague descriptors.

Q12: I never want to retire

I don’t like reading about retirement talk because I never want to retire. I love what I do (nursing) and I want to keep doing it in whatever aspect I can for as long as I can until I’m shoved out the door and straight into a retirement home (or a casket). Why should I worry about retirement?
– Dinah

Never retiring is a marvelous idea in theory, but it often doesn’t quite pan out that way. Many career paths nudge people out the door when they get to a certain age, regardless of whether those people want to keep working or not, and sometimes health conditions pop up that continue to allow a mostly full life but cut off certain career paths.

Another reason to save for retirement is that it opens up the possibility of a second career or a different kind of job later on. You may end up taking on a position that uses your nursing skills in a very positive way but it doesn’t pay nearly as much as your current job; a retirement savings plan can help offset that loss in income.

You really should save for retirement no matter what career you’re in and no matter how much you love it. It’s “cover all your bases” money, because you simply can’t predict what the future holds.

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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