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. Fast food after work habit
2. Radio Shack sales
3. Thoughts on micro housing
4. Pocket notebook organization
5. Secret inheritance and executorship
6. Boomers and the stock market
7. Most valuable tip at 18
8. Amazon product reviews
9. Financial independence unrealistic
10. Technology versus reliability
11. Stocks are gambling!
12. CSA/farm sharing advice
13. Farm fresh eggs worth it?
14. Bachelor’s degree worth it?
15. Biggest worry
This past weekend, I had the opportunity to be with my sister-in-law as she embarked on a new stage in her life, that of a church pastor. It is going to be a very challenging path for her in almost every way.
It is always scary when you start a new stage in your life where so many of the day-to-day elements change. When you add to that the spiritual needs of the people that you’re hired to serve, it becomes extra challenging.
Having said that, I feel like my sister-in-law is perhaps better suited for this challenge than almost anyone I have ever known. She is incredibly good at putting people at ease and making them feel comfortable talking about personal and spiritual things. She is aware of her own limits and skills at a very deep level – she knows what she’s good at, and what she’s bad at. More than that, she cares about the well-being of others on a very deep level, which has filled her adult life up to this point (she was previously involved in a very challenging social work organization).
I wish her the best of luck in this position… but I don’t think she needs it. I think she’ll do great anyway.
So I have this bad habit of stopping for fast food on my wa home from work at about 4:45ish. I know it’s not the healtiest option, but it wouldn’t be as big of a deal if I didn’t find myself hungry again at about 9 PM and make myself some scrambled eggs and toast or something. So it ends up like I’m having two suppers and that has an impact on both my weight and my money.
I haven’t come up with a great way to break this habit yet. Do you have any suggestions?
If I were in this routine, what I would do is start making slow cooker meals.
It seems to me that you’re hungry when you leave work and want to eat soon afterwards. You don’t want to wait to go home and prep food.
Well, if you start a slow cooker meal before you leave the house, then you’ll have a warm meal ready to eat as soon as you walk in the door. It’ll also provide leftovers, so if you want a little more at 9 PM you can have it then.
Of course, if you come home and can wait 30 minutes or an hour to eat – and it’s your easy choice to do so – you can eat closer to a dinnertime that won’t leave you hungry at 9 PM.
Just a tip. If you have a Radio Shack in your town, you should stop in now. Almost every Radio Shack is moving toward closing down shop and is having progressively better sales. You can get things like batteries and headphones and clock radios really cheap now and it’s just getting cheaper.
Good tip. Since Radio Shacks nationwide are going out of business in the next month, it’s well worth stopping by.
This is also a great example of what I call the “going out of business” game. When stores go out of business, they start gradually dropping the prices on everything. However, the longer the sale goes on, the emptier their shelves get.
My philosophy with a sale like this is to think about things you might actually want and for what price before you even go in the door. That way, you won’t end up spending money on things you don’t really want or need.
Naturally, when they get to the point of having a “fill up this bag for $10” level, which many stores do during the last few days of a sale, just get anything you think you can re-sell on Craigslist or eBay.
I live in rural Oregon and have several friends who live in the Bay Area in San Francisco. Two of them are living in a really unusual housing situation. They have these “micro apartments” that are about 70-80 square feet. They’re basically big enough for a bed and a dresser. They’re smaller than a typical dorm room. The landlord there converted the top floor of a house into six of these mini-apartments and rents them out cheap (or at least cheap for the Bay Area). My friends say that the only time they’re home is to sleep (there is one shared bathroom and a “kitchen” that has a tiny table and a microwave).
It seems like a money saver but I am not sure how much they’re really saving. They basically can’t eat at home in those conditions and they’re always at shops or other places where they spend money so I don’t think they’re getting ahead.
I think this kind of life could reap a lot of financial rewards, but it depends on how you execute it.
I have two reasonably close friends who work for well known companies in the Bay Area and in both cases the corporate campus provides a lot of services: free meals, places to shower, evening entertainment (lectures and the like), and other things like that. They use those services a lot… which does mean that they rarely leave work, but it also means that they’re not spending much at all.
If your friends are in that kind of situation and they’re paying very little rent, they might be banking a lot of their money. When you visit them, they may be trying to “show you the town” rather than just hanging out on the corporate campus all the time, so you may not have the best impression of their day-to-day life.
The point is, it’s very possible to make this kind of life work if you have the right employer. Since I don’t know what their employer is like, I can’t really comment one way or another on it for sure.
You’ve mentioned before that you love little pocket notebooks of the Field Notes size that fit great in your hip pocket. How do you organize these so that you can find anything? Mine always seem to devolve into chaos and unusability.
My pocket notebook is simply used as a place to write down the thoughts I’m having at the time in a form so that I can mentally work through them right now or remember them in the very near future (like a grocery list or a to-do list for later in the day). That’s the sole purpose of my pocket notebook.
Usually, at the end of each day, I spend a few minutes going through the last several pages of my notebook again to see if there’s anything I want to save or hold onto. For example, sometimes I’ll scribble down an article idea for The Simple Dollar when I’m out in the woods, so I’ll want to transfer that to a place where I keep a more permanent list of post ideas.
Basically, it’s all short term stuff that I process in some fashion by the end of the day. Either I use up the functionality of the note (like a grocery list or a doodle or a mental workthrough of a problem) or I transfer that note to somewhere else for more long-term use (like an article idea or an idea for a gift for Sarah or something like that). Everything that goes into my pocket notebook is one of those things.
Over the holidays, my grandmother took me aside and told me she had made me executor of her will and had some things she wanted to talk to me about after the holidays were over. So, we met yesterday and I am really struggling. I hope you can help.
First, she told me that as soon as she saw real decline in herself she was intending to “go peacefully” by taking pills, which kind of shocked me, but it’s her choice. What did surprise me is that she has way more money than I thought or anyone else in the family thought. Like, 100 times more. She’s a millionaire several times over.
She told me she chose me to be her executor because she trusts me the most of anyone in the family and she knew I could handle this business quietly and effectively.
Her estate plans are straightforward and I am pretty sure I understand everything. I am supposed to meet with her lawyer to go over details of the trust arrangement.
The real problem is twofold and this is what I need help with. One, I am really feeling uncomfortable keeping all of this secret from the family for what could be years. Two, I am earning a fee for my efforts that I feel is way out of line for what I’m going to have to actually do. I estimate it will take like 40 hours of effort when she dies (at most), but I am earning a fee that will amount to the low six figures. I know she is doing this because she loves me but it feels awkward and just too much. I have talked to her about it and she basically said, “Oh, just be quiet.”
Hoping some of your ideas will put my mind at ease.
The first and most important thing for you to remember is that this will and estate plan are the wishes of your grandmother. They are not your wishes or anyone else’s wishes. She earned this money and has the right to have it used in whatever way she sees fit when she passes on. She chose you to be executor because, for whatever reason, she trusts you with the job more than she trusts others in the family.
What does that mean for you? It means you have a job to do, and part of that job is not talking about things unless she wants you to talk about things. That’s part of how you earn that fee – by keeping quiet now unless she wants you to talk about it. You’re also going to earn that fee by dealing with the family squabbling that will likely happen after she passes away, and you’re also earning it by keeping in contact with her lawyer so that you understand everything that needs to be done. It’s more work and effort than you’re thinking right now, especially given the size of her “surprise” estate. Trust me, in your situation, you’re going to be earning this money. In fact, you’re earning it already by keeping your mouth shut.
For your grandmother, the fee makes a ton of sense. She’s probably already aware of how challenging all of this can be – keeping your mouth shut, handling the legal efforts after her passing, and so on – and wants to compensate you for it. Maybe she’s compensating you a little much, but I don’t think it’s as crazy as you seem to think that it is, especially when you consider it’s mixed with the love and respect that she has for you (which she must have, since she chose you to do this).
If you’re still nervous, remember that you’re doing this for her, this wonderful grandmother of yours that you have a good relationship with. This is what she wants you to do and it is very important to her. Do it for grandma.
Do you think that the stock market is a good long term investment with all of the baby boomers heading toward retirement? Won’t they all retire and stop buying stocks and start emptying their 401(k)s? That will cause the stock market to go down, not up.
The truth is that most boomers don’t actually have much in their 401(k)s at all. This article from Bloomberg sums it up: boomers have less money at this stage in their lives than their parents had and they’re probably not going to settle for a cheap retirement.
What does that mean? A lot of boomers – particularly the portion of them that would actually use a 401(k) – will have to keep working until they’re quite old, and many of them will die before retiring.
Not only that, only 52% of Americans own any stocks at all and the vast majority of the stock market is owned by the top 1% and by institutional investors who are holding onto large chunks of investments for the very long haul (think places like Ivy League schools, for instance).
I don’t think there’s a coming stock market collapse due to boomers selling their stocks and moving to Florida. There will be a few that do that, but the numbers are just a few drops in the bucket compared to the overall size of the stock market.
I am eighteen years old and about to graduate from high school. My parents went to college about 20 years ago and made a pile of financial mistakes and are still in debt up to their ears. I want to avoid that. If you were to give one piece of advice to an 18 year old starting college, what would you tell them?
Outside of covering your basic living needs, there is no physical purchase you can make that will provide you even a little bit of long-term happiness. Nothing you buy right now will improve your happiness in any significant way on a time scale longer than a year at most. It just won’t.
If I look around at the things in my life that I really value – and I’m honest with myself – almost all of it is just a representation of a set of experiences. The object itself doesn’t really mean anything. It just represents a set of enjoyable things I’ve done or will do.
If you’re going to spend money, spend it on experiences or improving yourself, but most of the time, you don’t have to spend very much to do that. Minimize the amount of stuff you have. Put enough money in the bank so that you’re not stressed out about where the money to pay next month’s bills will come from.
Do you think Amazon product reviews from users are actually useful? My husband says that they’re all either cranks or people who are company employees who are paid to write great reviews or negative reviews. What do you think?
I think that most reviews on Amazon are okay. If you read through the reviews on a product with a ton of reviews, they’re pretty clearly written by a lot of different people, they’re not all universally positive, and many of the three and four star reviews are very fairly written.
Most of the bogus nonsense occurs in the one star and five star reviews, where people are either being irrationally negative or irrationally positive about the product.
I read a lot of reviews on Amazon, but I generally stick to the 2, 3, and 4 star reviews. I think they’re mostly useful.
I appreciate that you have a strong goal of financial independence, but it just is not a realistic goal for me or for a lot of other people. Very few people can actually manage to save enough so that they don’t have to work. You have to be making a lot more than an entry level income to do that.
First of all, financial independence is basically another way of saying “retire early from your current job/career, but don’t sit around doing nothing all the time.” It doesn’t mean that you’re suddenly playing golf for the rest of your life. It simply means that you have strong enough finances that you can try something completely different without losing the life that you had.
That kind of life isn’t unrealistic for most people. Almost anyone can reach that level if they make the choice to do so.
The problem is that the choice to do so is really hard. The vast majority of Americans live paycheck to paycheck. It is not naturally easy for Americans to take some of their money and save it for the future.
That doesn’t mean that it’s impossible or even all that hard. It just means you have to choose to do some things differently in your life. Some are willing to do that. Others aren’t.
I just wanted to throw another wrench into the whole “buy it for life” reliability discussion. My parents have a microwave that still works that they bought in the 1970s. Great, right? The problem is that the thing sucks down electricity like there’s no tomorrow when they use it, it takes up a huge amount of space, and it cooks food really slowly. Even junk microwaves today work better than that one. The “buy it for life” advice in the 1970s would have been to buy that behemoth, but they are simply losing money on it now because of the energy use. Sometimes technology advances enough that buying it for life isn’t always the best option.
Sure, there are times – like your microwave example – where newer versions of products are light years better than old versions of products, and if you hadn’t invested in a reliable product back then, you would be able to get the new technology now.
That’s a big part of the reason why I don’t usually recommend that people “buy it for life” when it comes to things with lots of components, particularly electronics. They are usually outdated quickly and they also have a lot of failure points.
Many things, however, don’t radically change over time. A great knife from fifty years ago is going to be not that much different than a great knife now. Today’s knife might be incrementally better, but not radically so. A cast iron skillet from 100 years ago is basically identical to the one from today. Those are the areas where “buy it for life” really shines.
Why do you tell people to gamble their hard earned money in stocks!?
Investing in the stock market isn’t gambling at all, provided that you do it intelligently. When you buy stocks, you’re essentially buying a slice of a company which, in theory, is going to exist for a long time because the people running it have good products that customers want to buy and that the company can make cheaply enough that the company will make a profit. That’s a good thing. That’s how capitalism works.
When you do what I suggest and buy into a very broad-based index fund, you’re just buying a tiny sliver of every publicly traded company in the United States. I view it essentially as a bet on the United States economy as a whole, which is based on the idea of growing productivity and entrepreneurship, both of which we have in spades.
The only time buying a broad based index fund is a bad idea is if you believe that complete economic collapse of the United States is just around the corner, in which case having money in a savings account is similarly dumb because the dollar is about to become worthless.
Sure, the stock market is volatile, but over the entire history of the market, it’s gone up at a pretty steady 7-10% rate over the long haul. That’s what really matters.
A CSA farm share program has been going for several years in our town. They are expanding and have some slots available for this year for $250 for a small 2-3 person slot and $400 for a large 4-5 person slot. It seems like a lot of food for the price. Thoughts?
CSAs can be a great bargain if a few things are true.
One, you have to be flexible enough to find uses for the unknown variety of stuff that’s going to arrive in your box each week. This week, you might have several bundles of bok choy, some strange peppers, and a rutabaga, among other things. What do you do with it?
Two, you have to actually use all the stuff you get for it to be worthwhile. That means lots of vegetable-heavy meals for a while and probably some freezer storage, too.
Three, you’re not going to like everything you get in your box. That’s just life. Some stuff will be great. Other stuff… not so much. You still need to eat it to get the value out of the box.
For us, it’s worth it, but we are pretty close to vegetarian as a family anyway and Sarah and I enjoy cooking creatively and our children are very adventurous eaters for their age. If some of those elements were missing, I don’t think it would be worth it.
(I’m intentionally not talking about the other benefits of CSA, such as supporting local farmers and eating well-cared-for food. Those are real benefits with real value, but that value is hard to quantify.)
This next question is pretty related to this one.
We live in the outer edges of a metro area where there are farms just a few miles away. One of the farmers out there sells farm fresh eggs. They seem to be certified organic. The cost is a fair bit higher than the eggs at the store. I don’t get what the benefit is but our neighbors rave about them.
Organic eggs are raised on farms where the hens have access to the outdoors and aren’t raised in cages. They also aren’t given antibiotics except under rare conditions, are fed only organic food, and are allowed to molt naturally, and also have some standards for cleanliness.
Does this show up in the eggs? I think it does. There’s certainly a difference in color, and I think there’s a difference in taste, too, though it’s not a life-changing difference or anything like that.
Whether the cost is worth it for you depends a lot on the value you place on the treatment of the chickens. Some people care about it; others don’t. I’m glad there’s a choice available, regardless of what you decide.
Here is an article from CNN claiming that bachelor’s degrees are still worth the cost:
I wonder where trade schools rank in this.
I agree that a completed bachelor’s degree is worth the investment. However, there are a few factors that keep this from being a home run.
First, 44% of students drop out before completing a degree. This burdens them with extra costs – paying off the loans – without the financial benefit of the degree.
Second, as you mention, trade schools aren’t compared here. A long while ago, I compared trade schools to bachelor’s degrees and discovered that trade schools are much cheaper and don’t have an enormous drop in income compared to bachelor’s degrees.
I think that anyone who graduates high school should get some further education, but I think automatically assuming that the education should come from a college is a mistake. A trade school really is a good option.
What is your biggest long term financial worry?
I was interviewed by a student recently and they asked me this question, which I felt might be fun to include here.
My biggest worry in terms of my family is a severe health crisis, particularly one that would disrupt our income. We do have good health insurance, thankfully, but that doesn’t fix everything. It doesn’t cure cancer, for instance.
My biggest worry in terms of the larger economy is our dependence on foreign sources of energy. It’s fine to trade with other countries – in fact, it’s great – but we should not be economically dependent on any other country. I think that’s a giant mistake that could really bite us in the future. We should be looking for domestic energy sources, particularly renewable sources, so that it’s not an economic and national security risk and so that we don’t have vital economic interests in other parts of the world. That’s correct – I think our nation should be investing a lot in renewable energy at home as a national security priority.
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.