Updated on 06.05.14

Reader Mailbag #12

Trent Hamm

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.

Dealing with professional burnout without quitting your job
Financial implications of moving back in with mom and dad early in your career
If there’s a nearly identical product in both name-brand and generic, try the generic first

And now for some great reader questions!

Now that you’ve been a full time self-employed writer for two and a half months, how is it going? Do you have any thoughts to share?
– Tim

It’s still going great and I thoroughly enjoy it. I have tons of time to spend with my children and plenty of time to write and choose topics with much more careful consideration than before.

My sole complaint is the new impression that my time is now easily borrowed. People call and visit and ask things that they’d never dream of asking of a person who was working at a 9 to 5 job. The constant time intrusions are a serious frustration – hour long phone calls in the middle of the day, guests from out of town showing up at ten in the morning instead of at four in the afternoon because they know I’ll be home, a constant “oh, you can take a few hours and take care of this” drumbeat, and so on.

This can really be solved by me taking a stern stance with people who attempt to intrude and simply give them a clear “Not now… later” response.

Aside from that, I couldn’t be happier.

“I don’t worry at all about just busting out the plastic to cover it, going home, and paying off that whole card balance out of the emergency fund.”

Out of curiousity, do you really pay it off quickly after purchasing it, or do you do it on a monthly basis?
– StackingPennies

I pay off my full credit card balance each week on Sunday when I go through the unprocessed mail for the week. I just log onto the websites, get the current balance, and pay it off in full using online banking. No muss, no fuss.

This makes it easier to use credit cards for the regular expenses like groceries, gas, and so on. I just swipe my card, don’t worry about it, then pay the whole thing off in one lump from my checking account once a week.

This procedure allows me to (a) maximize credit card rewards, (b) get the buying protections that credit cards afford, (c) utilize the convenience of credit card purchasing, and (d) ensure I’ll never accidentally overdraft or anything like that. It works like a charm for me because I just keep the cards paid off.

The Lost season finale is this week. You’re a self-avowed Lost fan. Make three predictions about the finale.
– Mal

I think they’re going to show the funeral again from the end of last season and Locke will be the guy in the coffin – Locke’s been my guess since they showed that episode. What else? I don’t think Jin is going to die – they basically strongly implied that he was earlier this season, but I think he’s just going to be left behind. And I do think the island will actually move, and that’s why the chopper can’t go back to the island.

Actually, I have no clue what’s going to happen. I usually make guesses and they end up being massively wrong. The only big guess I’ve been right about for a long time is that Michael would be on the freighter.

Couldn’t you use a credit card instead of an emergency fund, and stash the emergency cash(sorry for the rhyme) into a higher paying investment?
– Nate

You can do that, but there’s a problem: you’re putting your emergency fund at risk. The point of an emergency fund is to be completely reliable so that you know it’s there during an emergency. In a “higher paying investment,” such as stocks, you lose that guarantee. If the stock market has a bunch of down days and then you need the fund, you may have lost a good chunk of your original amount.

If your emergency fund is enormous (a year’s worth of living expenses or more) and you’re putting it into a highly diversified investment, like the Vanguard Total Stock Market Index, then you’re probably at least somewhat protected from such a disaster. But if you know how big your fund should be, I wouldn’t invest like that unless I had at least 25% more than the amount I would normally have in my fund. That way, a 20% stock market drop would only take me down to the emergency fund level I would have normally.

For me, though, I simply wouldn’t do it. I prefer to keep my emergency fund as stable as possible, and that means in a high interest savings account.

On your Twitter feed, you mentioned you picked up Wii Fit. Any thoughts on it?
– Wilson

Frankly, I love it. It’s a very good motivator and record keeper for getting yourself into shape. I’ve been using the aerobic and yoga stuff primarily – they’re both easy at the start, but it’s not long before it gets challenging – maintaining some of the more advanced yoga poses for a long time is hard, and the thirty minute jog is a great little exercise (you run in place with a remote control in your pocket or hand).

My only criticism is that the balance board has a maximum weight limit of 330 pounds, which is very close to my current weight (I’m 6’6″ and broad shouldered – it’s not as bad as it sounds). Basically, that means it excludes some of the people who could use it the most. What’s even more strange is that the board is physically designed to support twice that much weight – it’s a software issue that keeps the weight limit at 330 pounds.

There’s been lots of information in the news about the price of food going up. Drastic language has been batted around (”silent tsunami” and whatnot) and staple grains have been rationed at Sam’s and Costco. Are you at all worried about food security in the US?
– T

It depends on where you’re talking about. I live in a rural area where we have our own garden and deer walk through our back yard all the time, plus we have several months’ worth of food on hand in our house. We both have the skill set we would need to convert quickly to making our own food. Thus, for us, it’s not a major concern.

However, if I lived in a city, I would be feeling nervous about this. People living in cities are largely reliant on people outside of cities providing their food – without that support, their food supply goes away. If it comes down to hard choices like this, farmers are going to make sure that they’re fed first and that their neighbors are fed next – in a drought, it will be the cities that are cut off first.

Another problem is the delusional view that crops can be used for fuel needs. Ethanol production is a neat trick, but if it reduces the amount of food available to the world, it’s also an expensive trick. We need to look at other forms of energy production that don’t intrude on our food supply.

What would I do if I lived in a city? I’d probably stock up on food in the basement – but I do that anyway.

I have an interesting situation. I have a credit card debt that has a total of $10,000. $3,500 of it is locked in at 0% on a balance transfer – the other $6,500 is at 18.9% APR. I’m trying to decide which debt to pay off first and I don’t know how to compare this debt to other ones. Help!
– Millie

There are a lot of approaches to this. What I usually recommend is that you figure out the current APR for that bill and use that to determine what to pay next – but realize that the APR will change over time on a bill like this, so you’ll have to recalculate it.

The current APR is easy to figure up. You just figure out what portion of the interest is at each amount. In the above example, 35% of it is at 0% and 65% of it is at 18.9%. Thus, this calculation is easy. .65 * 18.9% = 12.285% is what your APR is right now on that bill.

But let’s say you make the minimum payments over the course of a year. Depending on your agreement, the small amount of principal might come out of only the 0% part. If your minimum payment knocks the total bill down to $9,500 over a year, with $3,000 being at 0% and $6,500 at 18.9%, the proportions have changed. Your APR is now (6500/(6500+3000)) * 18.9% = 12.93% APR.

In other words, you need to recalculate the APR every once in a while to see if it changes your debt repayment plan. If the debt is now the highest APR on the stack, you should be focusing in on that debt.

Do you have any advice on how to go about finding a good financial advisor?
– Gayle

Let me be clear here: while it’s great to get some financial encouragement and some food for thought online, before you make a major financial move yourself, you should strongly consider contacting a professional financial advisor. These people are trained to do this stuff. I made my own financial choices without one, but I took a sizable risk in doing so – I stumbled into the right moves instead of having a good plan right off the bat.

Your best best for finding a financial advisor is to hit up your social network. Ask people you know if they’ve used one and if it was a good experience. Hopefully, you’ll find some good pointers right there.

If that fails, turn to the yellow pages. Here are some specific criteria you should be looking for if you want to hire one:

First, ask if they’re fee based. Commission based advisors make their money by earning commissions on the financial products they sell you, meaning they’re more biased towards selling you stuff that makes them more money. Instead, look for one that’s fee-based – those charge a fee up front and don’t earn commissions on sales, thus they’re much more likely to be shooting straight with you.

When you find some that are fee-based, meet with them. The biggest factor (in my opinion) that the person should address is knowing you and, most importantly, understanding your goals and also the level of risk you can tolerate. If the advisor is immediately feeding you a plan before you’ve told them anything about yourself, you’re wasting your time.

One big tip of advice: put the money in a safe place for a while and educate yourself first. Read some good basic books on investing and know roughly what you want to do with the money before you ever start looking. If an advisor is going strongly against the stuff you’ve learned, you’ll know they’re feeding you a line.

Would you ever discourage your kids from marrying someone who does not have any tertiary education and they have a masters and are considering getting a doctoral degree?
– Audrey

I receive questions along these lines all the time, and my answer to them is pretty much the same.

I have only two things I’d look for when my child is considering marrying someone – that the potential spouse loves my child and respects my child. Other than that, I don’t care about their social status, their economic status, their race, their gender, their sexual preference, or anything else. Naturally, there are some situations where I might want to give them a lot of pre-marital advice, but if there is real genuine love and respect there, I would be the last person to squash it out.

All I really care about in terms of my children in adulthood is that they’re fulfilled and happy with their lives and have respect for other people, no matter what path they choose. If my children wind up being social workers at an orphanage in Romania making seven dollars a day, I’ll be happy for them if they’re happy.

I am an unmarried 25 year old guy in a well-paying and stable job. I currently have approximately $21,000 sitting in my ING Direct account and have no debt. I rent an apartment and save on average of approximately $2,500/month.

You have mentioned the importance of getting started early – given my situation what would you do with the $21,000 and the $2,500/month of saving? Thanks.
– Joe

If I were in your shoes, the first thing I’d do is figure out why I was investing. What’s the big goal? Right now, it’s probably pretty nebulous for you, which means that you can have a fair amount of risk in what you do with the money since you’ve got no distinct plans for it.

The first thing I’d do is keep two months’ worth of living expenses aside for an emergency fund. Know what you spend in two months and keep that much in savings.

After that, I’d invest the rest and – given your situation – I’d probably put it fairly risky. I’d probably put it in three index funds in equal amounts – a total stock market fund (that’s for domestic stocks), a total international market fund (for foreign stocks), and in an emerging markets fund (really high risk stocks). I’d do the whole thing through Vanguard, then just sit back and watch. Don’t panic if it goes down – just ride it out and study carefully what you’re holding.

Along the way, I’d also learn – read a lot of books about investing, starting with the great Bogleheads’ Guide to Investing. Read as much as you can.

That’s what I would do in your shoes, though you should probably contact a financial advisor if you want a structured plan that matches exactly what you’re doing.

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

Loading Disqus Comments ...
Loading Facebook Comments ...
  1. Saving Freak says:

    I have to agree on the emergency fund. Having it available and secure is a very important part of financial stability. For me it also keeps my wife very happy and gives here a great sense of security with our life in general.

  2. Andy says:

    I think Americans will be fine if there is a food shortage – both because we produce so much and because we are so wealthy as a nation. We can afford expensive food much more than poorer nations.

  3. Andy says:

    One more thing, about Lost, I’ve only seen a couple episodes of the first season, but I’ve watched most of the second, third, and fourth. I’ve enjoyed the fourth season a lot, but will you admit that the writers essentially said screw you to the fans in the second and third seasons, and created lots of filler content that didn’t advance the story at all, but was there just to drag out the show and create more seasons/episodes. I felt like 2/3 of what I watched was completely pointless and boring. I can’t forget that episode about Hurley being in charge of the food and then giving it out at the end.

  4. Dave says:

    Trent, glad you like the wii fit. I was hoping to see some first hand reviews from people before making the leap myself. Did you go the online route for grabbing one or a brick and mortar?

  5. q says:

    Guy with the ING fund – Buy a house and sit on it (with 10k downpayment)… I’m sure you rent payment is only slightly less than the house, and it will appreciate.

    Put aside the emergency fund sure, but take about 10k and go to Prosper.com and start funding high risk loans there. Better return for your same risk, and your helping people (sort of), instead of businesses who don’t mind losing your money you’ve invested in emerging market funds.

    Are you funding 401k, IRA, etc? If not, do that too.

    I’m 26 and have only half as much and am still trying to stick to that plan.

    Don’t kid yourself into working past 40 ;)

  6. Trent Hamm Trent says:

    Andy: I think a lot of that was to build characters, so you’re more emotionally involved with how the story turns out for specific characters. For example, with Lost, I have a HUGE amount of empathy for Locke, probably more than for any character on any television series I’ve ever seen. My wife feels a huge amount for Sun. It’s because of the character-building, I think.

    Dave: I got it off of Amazon.

  7. Louise says:

    Trent, you say, “However, if I lived in a city, I would be feeling nervous about this.” We travel extensively and buy a few groceries every couple of days. I have literally been in 20 stores this month, all different sizes and companies.

    There is no food shortage here.

    Sure, a few items may be unavailable, such as large bags of rice. But American grocery stores stock tens of thousands of items. There is an embarrassment of riches on the shelves. Choose another item and still eat better than 90% of the planet.

    There is no food shortage here.

    Should we be concerned that in other parts of the world, poor people are struggling to eat? Yes, of course. Compassion is always appropriate. There is much work to do to make sure everyone has enough food. Drought, infrastructure, economics, and climate variations affect supplies. But there is no food shortage here.

    Your voice is respected in the community and the worry of leadership often gets spread like wildfire down through the ranks. Panic spreads quickly when prominent voices worry. I urge you to not add to the rumors.

  8. Frugal Dad says:

    Trent, interesting theory that Locke is the one in the casket. My wife thinks it is Michael, and I’ve wondered if it isn’t Ben (or Locke)- although this would be disappointing because both characters have really developed over the past two seasons.

    Kudos to Joe who wrote in with the money stashed away in ING Direct and no debt. Talk about getting off on the right foot! I’m betting he’s a future millionaire.

  9. My friend just got a Wii fit and we used it this weekend. I really enjoyed it. We were debating the weight limit because most of us are heavy. (Over 200 pounds.) While I agree that it would be nice if it went higher, 330 pounds is pretty impressive.

  10. Sara A. says:

    Question for next week:

    There are a lot of books, classes, organizations, etc. that claim to help new or emerging writers. Do you have any advice about which of these is worth spending money on, if any at all?

  11. margo says:

    Ack! I have been anticipating the release of the Wii Fit for months, but didn’t preorder it, since I wanted to be coolheaded about it and let the real reviews start cropping up before I invested.

    But of course now it is sold out everywhere and I have a terrible case of the Wants.

    Does anyone have any advice for me? My husband and I have been looking for ways to exercise together. This weekend, we rented bikes and had a lovely 12-mile ride on a local paved path. We really enjoyed it. Now we are seriously researching investing in a couple bicycles but we are totally ignorant on the subject. We are unsure where to look– pick up some cheap cruisers from Target? Try Craigslist and take our chances with bikes that might need maintenance/fixes we don’t know how to do? Go to a pricey bike shop with a budget, willing to throw down a little more for the knowledgeable staff’s help with purchasing and learning how to maintain the bikes? We are interested primarily in riding for fitness & fun, we live in a fairly hilly neighborhood and aren’t going to be doing any “commuting” or similar on the bikes.

  12. Andre Kibbe says:

    I find that using the phrase “writing hours” (e.g., “Actually, that’s during my writing hours, but I can do it afterwards.”) liberally helps people understand that writing is a job. I used to say, “I need to write” or “I have writing to do,” but then people don’t associate the activity with something specific to a time and place.

  13. Alyssa says:

    @ Margo

    Go to a store like Target right when it opens on Sunday. Sunday is the day when their ads come out. If Wii Fit is in the ad circular, they should have at least a few copies.

    That is how we got ours.

  14. Alex says:

    @ Margo:

    I’d recommend a bike shop, actually. I’m not a rider but I know quite a few, and I think the investment is worth it, both for the comfort of getting the right bike for you, and a better bike will last you longer.

    If you’re looking for something else to do with your husband, you could always take up running :) this is an easy plan that will have you running 30 minutes after 9 weeks. Just make sure you get good running shoes (from a real running store) first.

  15. KC says:

    Food shortage?? Prices are up, but no shortage of food. I live in the city and I can get anything I want…and its within walking distance. The grocery store shelves are my stockpile of food.

    To the guy with the $21k in ING that’s great! It could easily be your emergency fund. You could get away with $10k as an emergency fund, but $20k isn’t too much. But like Trent says – what are you saving for? If it is the responsibility of home ownership then it sounds like you are ready to start shopping for a house. If its just long term savings pick up some books on investing and educate yourself – you’ll find your risk tolerance and what you want to go for. You are young, you can take on more risk – but don’t be foolish, don’t be too high risk.

  16. Ed says:

    The person in the casket has to be someone who got off the island, which would be one of the Oceanic 6, Michael, Walt, or Ben.

    The credit card question where some is 0% and the rest is 18.9%, since it is the same card, you do not have a choice what is going to get paid first. The credit card company is going to put your payments towards the 0% first, so your remaining balance continues to grow. Just one of their many tricks, the lowest interest rate is always paid first.

  17. margo says:

    @Alyssa: Thanks, we’ll try that next Sunday!

    @Alex: Funnily enough, I am a runner but my husband has tried it, doesn’t enjoy it, and finds my love for the sport strange! We also walk our dog daily but have agreed its time to kick it up a notch. Biking is something he and I are both interested in, and after the initial purchase, if one doesn’t fall down the rabbit hole of wanting the Latest Greatest, it seems like a pretty frugal fitness hobby.

  18. Lola says:

    Trent, I liked the answer you gave about who your children should marry. I hope more parents thought like you, instead of trying to impose their “father knows best” values onto their children. That’s one of the reasons I absolutely hate films like “Meet the Parents” and “My Big Fat Greek Wedding”. In my world, if my parents didn’t approve of the person I chose to spend my life with, well, tough luck. It’s my life and my marriage. But the huge commercial success of films like these show that people still think their partners have to be approved by their parents (usually the father, obviously).

  19. Susan says:

    Do you have any advice how to save for retirement without relying on a 401k? I am working abroad on a local contract and am not able to contribute to a 401k. I pay about 50% of my gross salary to various taxes and health care, and am still paying down about $25k on my grad school loan.

    I am thinking of index funds, but I am a bit wary. The 401k’s I had from when I was working in the States about 10 years ago got rolled over into mutual funds with a large financial services company, and today, after all the market ups and downs, they are still only worth the initial investment! So if the mutual funds aren’t gaining in value, what other options do I have? Thanks for any ideas.

  20. JFrance says:

    @q (#5)

    After the real estate bubble I see people giving advice like this all the time, and in drives me nuts. Index funds are a better long-term investment than real estate. The justification for investing in real estate is ‘land will always have value’. True, land is a limited resource and will always have value. But that value is pretty fixed. Unless you strike oil, you’re not going to get 100x your investment out of it–in fact, long term, you’re only going to keep up with inflation.

    Owning stock gives you partial ownership of a company. This also has real, concrete value. But the potential upside is far higher: if you come across the next Microsoft or Google the potential gains are essentially unlimited. Of course, if you own shares in the next Enron your potential for loss is higher too, though, which is why the diversification of index funds is so important: it gives you average returns without having to be an investment guru. And those average returns will still be better than what you can expect from real estate, a savings account, or any other form of investment–if your time horizon is long enough. (At least historically it has been.)

  21. Carrie says:

    Question for next week:

    You mention doing research for some of your posts. How do you go about researching? The internet? The Library? Experimentation?

  22. Joe says:

    I agree that there is no food shortage, simply pricing pressures. Earlier this month, Michael W. Masters testified before the Committee on Homeland Security and Governmental Affairs on why he thinks we have experienced a huge increase in oil and food prices. The transcript is located here http://hsgac.senate.gov/public/_files/052008Masters.pdf. It gets a little technical and talks about the futures markets and commodities a lot, but it is a very interesting read.

  23. April says:

    I also live in a rural area, and we, too, have a garden. I get a lot of flack on PF blogs about not living in a high-rise condo in the city, 2 blocks from work, so I can walk or ride a bike every day. That scenario doesn’t work for everybody, and I have zero interest in living in the suburbs. My home in the country is a sanctuary, and I love growing my own food and not living ten feet from my neighbors. I like to be as self-sufficent as possible. We do what we can to counterbalance living further out. I carpool to work. We stay at home on the weekends cooking or watching Netflix. It’s not much of a sacrifice to me, though, since it’s what I enjoy doing. It’s nice to see a PF blog mention the benefits of rural life.

  24. Kandace says:

    There may be no food shortage here now, but with gas prices, subsidies for farmers not to plant, grains being turned to ethanol, I don’t know how long it will last. I would advocate having an “emergency food supply” just like an emergency fund. A few months’ of dry goods would be very helpful to have on hand. If you buy now, the cost will be less. Dollar cost averaging applies to rising food/gas costs, too. Also, think about natural disasters and the difficulty government and aid groups have getting in to provide relief.

    I don’t think there needs to be an alarmist approach, but just be wise about it, like financial planning.

  25. luvleftovers says:

    “What would I do if I lived in a city? I’d probably stock up on food in the basement – but I do that anyway.”

    City people don’t have basements!!!

    I’m not seeing shortages of anything here. Prices are up so people are avoiding certain items, but the shelves are full.

  26. Andrew says:

    Question for next week:

    I am a recent College Grad who is in need of a new vehicle. For the last year or so I have saved fevorishly for a used vehicle. I currently have saved enough to buy a used vehicle outright, but now I am not sure if I would be better served financing the car and then opening/investing in something such as Vangard. What are your thoughts is a 6% car loan over 3 years worth taking if I put that money into a index fund?

  27. arlen says:

    re Labeling: I put a strip of 2″ wide packing tape onto the box where I am going to label it, and then label it with masking tape on top of the packing tape. The packing tape makes it easy to change the label.

    re Paying Credit Card: My credit card bill says “Save a stamp, use online bill payment.” When I went online to pay, I read that if I used online payment it would charge a $9.95 online service fee per payment. Do you have an idea of how to find a card that charges no fee?

  28. jblee says:

    Trent, I have a question about that APR issue. Why do you have to divide 9500 over 6500 (6500/9500)? In the first APR computation, you only multiplied 6500 by 18.9%. In the second one, you included the total balance. Why is that?

  29. Lenore says:

    Thanks for commenting on the Wii Fit. Maybe the next version will accomodate bigger folks. I’ve dropped 20 pounds in two months but still weigh over 300., and it seems surprisingly few kinds of exercise equipment are designed with the obese in mind. Any mini-trampoline, stair-stepper or treadmill that would support me has been way beyond my budget. Finally I picked up a StrideCycle for under $30 at Wal-Mart. It lets me pedal like a bicycle while sitting in any chair. I like that I can use it while watching TV, and it doesn’t take up much room. It has a knob for adjusting the tension, and I can feel it working my stomach muscles as well as my legs.

  30. sm4k says:

    About the Wii Fit weight limit: I’m sure it’s physically capable of holding more, but you have to remember that when you bounce on the board, you release more energy on it than you do just standing on it. The Ski Jump and Tight Rope games encourage you to press with your legs to simulate jumping (without actually jumping), and I’m sure someone who is near 300lbs puts well more than 300lbs of pressure on the board. Go stand on a non-digital scale and bounce, and you’ll see a small sample of the difference.

    I’m sure the limit is there to ensure the product works well and fits in with Nintendo’s quality standards.

    I agree that it should allow for heavier weights, but I’m glad to see that a device that is likely to take a serious beating (and is pretty expensive) is designed so solidly.

  31. Jess says:

    Just wanted to say kudos to Joe for saving so conscientiously! I am also young and single (age 22), and have socked away about $12k for a down payment on a house. Recently, I’ve diverted savings into a Roth IRA (about $6k), but I’ll get back to the house savings soon. I’m still a full-time graduate student, so I’m looking forward to a CPA’s salary!

  32. bunny says:

    i think it is definitely michael in the coffin.
    1-the obit stated that he was from new york and had a teenage son. this would line up with him and his use of an alias.
    2-he is suicidal and the obit states that he was found hung in an apartment. he can’t die until he fulfills whatever duty the island has for him.
    3-he’s the only person who makes it back who isnt’ in the “oceanic 6.”

    also, the producers have said that he was originally supposed to be shown in the coffin, but the actor was unavailable. but i found that out after i put everything else together. ;D

  33. Joanna says:

    Question for next week:

    You seem to have a fairly solid routine. I’m currently wanting to establish such a routine which allows for maintenance of all those steady to dos like cleaning the house, laundry, finances, etc. as well as cooking at home, a reasonable amount of exercise and time with my loved ones. I get frustrated, though, as there still doesn’t seem to be enough time. Were you ever in always-behind-mode and, if so, how did you get out?

  34. Margaret says:

    If you are stockpiling food, make sure you are rotating it out. E.g. if you have 3 months worth of beans, use those when you are making beans and replace the stockpile with whatever you buy new. The stockpile is no good if you need it and all the food is spoiled.

  35. Joel Quile says:


    My son is a huge organic fan. I know it’s health benefits. I also know it is expensive too. How would you determine to eat organically or not if you lived in the city? Any thoughts you have on organic food would be appreciated.

  36. CK says:

    Re: Finding a good financial advisor:

    Be aware that “fee based” and “fee only” advisors are NOT the same thing. “Fee based” means fees + commissions. It just depends on the advisor as to what the split of fees/commissions is. “Fee only” advisors are those that do not accept any commissions whatsoever.

    As for finding a fee-only advisor, one method is to search on http://www.napfa.org. This is a professional association of fee-only financial advisors, and you can see their Fiduciary Oath on the site. (The website may be a little convoluted to navigate – they’re working on a re-do to make it easier.) Of course, like any association, not all of the advisors who qualify for the organization are members, so it’s not necessarily a bad thing if someone you get recommended to is not a member.

    Disclosure – I am a fee-only financial advisor and am a member of NAPFA. I’m not soliciting business here in any way, which is part of why I’m not even using my real name in this comment. I’ve worked in a fee-based office in the past and ultimately chose to work for a fee-only firm instead, due to fewer conflicts of interest. However, I have friends in the industry who are fee-based, and I have no doubt of their ethics and commitment to working for the good of their clients (and not themselves). What I’m getting at is that not all folks who accept commissions are dishonest.

    Important parts of finding a good financial advisor include finding someone that you feel comfortable talking with and can trust, and making sure that you are all on the same page as far as how they are compensated. Also, make sure the advisor has a fiduciary responsibility to you. Depending on the compensation method and how they are regulated, some advisors do not have a fiduciary responsibility to you.

  37. Sylvia says:

    I think I warned you way back that you would have more people calling and knocking at your door when you left your full time position. The hour long calls and unexpected visits are my biggest trial in being home all of the time. That hour or even half hour on the phone could be put to better use on a project. I love people and if the phone call is really important–then I’m ready to give my time. But often –it is just that kind of conversation that turns into time waste.

  38. Marcus Murphy says:


    Have you had any experience with time tracking tools that measure productivity and the sort? I’ve recently downloaded Rescue Time (http://www.rescuetime.com/) and I think seeing my usage patterns has created a better awareness for me. I’d love to hear your thoughts on the subject. Thanks.

  39. leslie says:


    Can cosmetic surgery ever be considered an investment? Or are the studies/rumors that ‘beautiful people make more money’ not stable enough to rely on recouping the surgery costs?

  40. Jess says:

    I have a question for next week’s mailbag. First, the background: I start grad school in the fall. I was working a job I hated, which was only tangentially related to my career aspirations. (I have a degree in a field I love but that will never pay well.) I’ve been accepted as an intern for an organization that could be my dream job, and will definitely help me on my way to that dream job more than the other would have. I was awarded full funding for my first year of grad school, which will be extended to my second (and final) year if I keep above a 3.0 GPA, so I’ll graduate with no debt. I do have undergraduate debt, though I can defer payments on that while I’m in school. I live with my boyfriend, who is a computer programmer and makes substantially more than I did even at the real job. Now, with me taking a 2/3 pay cut for the internship, he’s making about five times what I am. My internship is for the summer, I start school in September and will be getting additional funding starting about a month after that. I’m applying for additional internships, and I’ve let my internship know that I’m interested in working for them in some capacity after the internship ends, but I don’t know if anything will come of that.

    Now that the background is out of the way, here’s my question: I could qualify for about $200 in food stamps a month. I don’t need them, my boyfriend generally buys our food (I cook a lot, so it’s not like we’re buying fast food or pre-made stuff) but it would help the budget a lot since I can’t really contribute to rent anymore. I also hate feeling like I’m taking advantage of my boyfriend’s generosity and would like to be able to contribute to the household expenses. I could get a second job for the summer, but I don’t want to work two jobs and go to school full time; I think it would be really hard to do the work that is required for grad school while spending so much time working. It just feels ethically wrong to me, like I would be taking food from some poor person who really desperately needs the food stamps to make it. Everyone I’ve talked to has said that I pay taxes, so I should take advantage of these programs if I qualify for them, but I wanted to get the opinion of someone who doesn’t really know me and has no stake in it.


Leave a Reply

Your email address will not be published. Required fields are marked *