Reader Mailbag #13

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.
Money merge accounts: my thoughts (this post has an astounding 1,267 comments)
How to find a decent credit card
A buyer’s guide to personal finance books (this is a bit older and I will be updating it in the future)

And now for some great reader questions!

Is ID theft insurance worth the money it costs to participate in it? I signed up for the program that Dave Ramsey recommends (Zander Insurance) about 2 years ago. It costs $6.95 a month. I really want to know if this expense is really worth it or not, the hype sounds good, but not sure if in reality it is. Any thoughts?
– Josh

Insurance is protection against a perceived threat. The questions that need to be asked here are really questions you need to ask yourself. Identity theft has a small likelihood, but when it does occur, it can be a significant headache to deal with. Is that $6.95 a month buying you peace of mind against that potential identity theft situation? Or do you feel that the likelihood is small enough and the ramifications for identity theft are small enough that the $6.95 is largely a waste?

This is really a personal judgment call. For me, it’s not worth it – I just carefully monitor my credit report at and through a free service associated with my mortgage. If anything unusual were to pop up, I’d track it down and nip it in the bud. I’m also fairly careful with key pieces of identity information – I keep very few credit cards, shred personal information before throwing it away, and so on. There’s a lot more low hanging fruit out there than me, so I don’t judge identity theft insurance as being a significant need for me. You, however, may come to a different conclusion, and thus that $6.95 is a justifiable expense.

You must have heard in your history lessons about “Reasons for the decline of Roman empire” and so on. If you were to write a futuristic piece, say in a history book 1000 years from now, on “Reasons for the decline of the American civilization”, what would the top 5 reasons be?
– WhirlMind

Interesting question, but I think there’s really only two reasons.

Globalization Over the long haul, the standard of living all across the world will even out because of global trade. It’s just a matter of time before the standard of living in Calcutta equals the standard of living in New York City.

Energy over-reliance without energy independence The United States economy is tethered to a huge amount of energy use, but that energy use is largely tied to fossil fuels. Since those fossil fuels are basically nonrenewable, the grease in the economic engine of the United States will eventually run out without significant changes.

Every reason I can think of for the inevitable downfall of the United States comes back to those two reasons.

I have an odd question. My mom is an accountant and has always done my taxes. This year, unlike previous years, she sent me a copy of them afterwards. There’s a dividend amount that I’m paying $250+ of taxes on from a bank that I wasn’t aware I had an account with. When I asked my mom about it, she was very vague. When I was a teenager, I recall my parents saying that they had put money in my name because I was in a much lower tax bracket. The bank is one my parents use, so I think it’s that money. Is there a tactful way to ask my parents to take that money back? It’s technically in my name, but I have no idea what the account number is or how much money is in it (the documents get sent to my parents’ house 3000 miles away), and the money was never meant to be mine, so it’s a little irritating to pay taxes on it. On the other hand, should I bother? My mom did a lot for me growing up, and $250 isn’t that much money.
– !wanda

You need to have an open discussion with your parents about this, just so you know what’s on the table. It’s fine that you’re willing to keep paying that $250 tax bill if it’s an arrangement with your parents that you’re happy with, but to keep that arrangement shrouded in secrecy isn’t healthy for either one of you.

If you’re willing to continue to pay it, then lead with that. Tell your parents that you’re quite happy to continue the arrangement, but you just want to fully understand it so that you’re not liable for anything at any later point.

Any time there’s intentional clouding of the situation when one of the participants in a relationship wants openness, it’s bound to grow and fester into mistrust. Get everything on the table now – it’ll be better for all of you.

Golf is the my favorite and most hated sport at the same time. Is there anything else where you can practice hard, improve, and still be unhappy?
– Andy

Yes, and they’re among the best things you can do with your time, because not only are they firing your neurons, they’re teaching you patience as well.

I thoroughly enjoy card games (particularly trick-taking games) and board games, as they fall into this same group. You can continue to get better, but you’ll still often lose because of your inadequate skill. This drives you to constantly improve, and that drive teaches you patience and forces you to build skills of logical thought, reading of others, and patience, all of which pay dividends over the long run.

I am considering quitting my job. After working here for two+ years, I have become a stressed-out, zoned-out, and burned-out person. I honestly feel what I need right now is little to no responsibility. I have enogh money saved up to get through a few months without income. But I’m worried about the state of our economy – is our national financial problem going to make it harder for me to get another job down the road?
– Kristin

First of all, I’m an adamant believer that if you’re truly in despair over your job (and I think “stressed-out, zoned-out, and burned-out” qualifies), it’s time to move on. If I were you, I’d start the job hunt immediately, then quit when you have some opportunities ready to go. You can leave yourself a few weeks of “regeneration” time in the middle to recharge.

If you don’t have a new situation lined up … it would depend on your situation. If you have people relying on your income, like a spouse or children, it might not be a wise move without some careful consideration. But if it’s just you, you can always find some sort of work to pay the bills while looking for a better long-term solution.

if traffic [to The Simple Dollar] diminishes on weekends, I would assume that you choose topics that seem less popular to post on weekends. Is that the case? And how often have you been wrong (thinking that a post that would attract lots of comments only gets a few, and vice versa)?
– Lola

I don’t schedule articles on certain days because of quality. I basically schedule them in the order I write them, except that occasionally I’ll slip one ahead in the queue if I think it’s particularly good.

I’m also very bad at guessing which articles will be popular and which ones won’t be. Quite often, I’ll put a ton of work into an article and it’ll just get a few comments. On the other hand, sometimes readers will get deeply engaged by a minor detail in an article and stretch it out to hundreds of comments, which shocks me every time it happens. I think over time I’ve gravitated more in the direction of stuff that people consistently like, but I still try to experiment on a regular basis (like that Born to Buy series).

Given your financial concerns, why not use Linux?
– dj

I have an Ubuntu box (an older PC with a memory upgrade – all for free from a swap meet, actually!) under my desk right now, but there are many little things I don’t like about it: almost everything I use regularly has to be found and installed later, the solutions for common problems usually involve long searches through message boards for arcane solutions, and I’ve still not found a general text editor I really like (vim is the closest) for Linux.

In a nutshell, it’s very slick, but I simply don’t get as much done with it as I do with my Mac, so I rarely use Linux. I certainly wouldn’t recommend it to a casual PC user – my mother would turn off her PC and never use it again if she had to deal with apt-get.

Can you recommend a favorite book on marriage or relationships (not necessarily one with a money focus)?
– Ama

The most useful book I’ve found is The Seven Principles for Making Marriage Work by John Gottman. I read it in the first month or so of our marriage because I wanted to be sure that I was doing everything I could to be a good husband and support our marriage, and it provide me with a ton of insight and food for thought. Five years on, we have two kids and couldn’t be happier.

There are obviously specific situations that can’t be dealt with in a general book, but that book was very, very helpful for me when I was trying to really get a grip on successful married life.

Would you care to comment on the changes at eBay which have made it harder for sellers to find honest buyers? (question paraphrased)
– Ginger

Ginger wrote an extremely long question describing the ins and outs of selling on eBay today from the perspective of a person who sells a large volume of items. My opinion is that the changes do hurt those power sellers. Power sellers rely on the percentage of the auction that eBay takes, and even with a small change in that rate (on cheap auctions, eBay takes less; on expensive auctions, they take more than before), that can affect their bottom line. Also, the changes in feedback also make it somewhat more difficult to accumulate reputation and also clearly identify bad buyers.

For the person who just wants to list a few items and not worry about eBay again, I don’t think the changes make much of a difference at all. I occasionally sell on eBay and the changes make very little difference.

I’m sure commenters will have plenty to say on that take.

You often advise us to dream big. What is your big dream about?
– Night Ranger

My biggest dream (besides complete financial independence – I’ll write about that later today) is to publish a few novels and a short story collection. I love writing fiction, but so far I’ve not had much success at all with publication. I hope that in the future my recent success with getting nonfiction material published will help me get my toe in the door to get some fiction published.

What am I doing to get there? I try to write 1,000 words of fiction every day, but most days I don’t make that mark, as my nonfiction responsibilities eat up more time (The Simple Dollar, my book, and other projects). I can feel myself getting better with fiction, however, and I’m considering submitting some of my stories to a few competitions in the near future.

If I do see anything in print, I’ll let you all know about it!

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

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