Reader Mailbag #17

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.
How to avoid boredom during a financial turnaround
The McDonald’s $1 double cheeseburger really isn’t all that cheap
Fifteen things you can do right now to help your career

And now for some great reader questions!

Generally speaking, how old do you think is too old to rely on your parents for financial support? How do you plan on easing your children into the ‘real world’ as far as managing their finances go? Are you going to ‘force’ them to get a job (specifically when they’re in high school)?
– Dave

I don’t think there’s any set age where a person is clearly too old to be living at home. Most of that has to do with the specific situation that person finds themselves in. How were they raised? How permissive and inviting have the parents been in terms of keeping the young one at home? What’s their exact economic experience?

As for my own children, my expectation for them in high school is that they wrap their arms around some sort of significant project in their spare time. What it is is up to them. It might be a regular job, it might be a specific extracurricular activity, or it might be something else entirely. But I won’t consider it acceptable for them to spend their summers not doing anything, and even their evenings during the school year to some extent.

Also, once they leave for college, with the exception of holidays, they’re not moving back in unless they’re paying rent or doing something to earn their keep, period.

How do you read so many books? It sounds like your schedule is packed, and for you to not only read at least two or three books a week AND process the information so thoroughly, is almost beyond belief. Beyond the “How to Read a Book” post you did a few months back, do you speedread? If so, can you recommend a good speedreading course?
– trev

I spend two to three hours a day reading personal finance and personal productivity books on this site. I’m also trying to spend an hour or so each day reading other books when my schedule affords it.

That means each book review usually has four or five hours of reading behind it, and that’s my normal reading speed (with a bit of note taking). I don’t do any speed reading or anything like that – I just read at roughly this speed all the time. I tend to read some types of books slower than others (literature goes slowly for me, while very fact-laden nonfiction goes pretty quickly).

I was thinking about opening an account with Sharebuilder.com (ING) to get started in some simple investing. I already invest heavily in my TSP (401K) and Roth, and wanted to dump some extra cash into some stocks now that my vehicle is paid off. I plan on holding onto any stocks I buy long term. Any thoughts on Sharebuilder? Do you recommend any alternatives? Anybody else have any thoughts on Sharebuilder?
– Tony

I very recently started using Sharebuilder.com to start slowly accumulating a small handful of specific stocks and ETFs. If you’re not planning on actively trading and instead plan to just buy and hold, Sharebuilder is great. If you’re looking to actively trade stocks, Sharebuilder isn’t so great. If you’re intending to just buy index funds, go straight with Vanguard where you can invest in index funds without any fees whatsoever.

In my view, one should only use Sharebuilder if you’re planning to just buy stock in a few individual companies and hold them over the long haul. My usual philosophy is that you should only buy a stock if you have a very clear and specific reason for buying it, and you should only sell it if you have a very clear and specific reason for selling it. I’m also more of a “long haul” thinker and I put a lot of value in companies that make products that I strongly trust – that’s one of my specific criterion for buying an individual stock. Because of that, Sharebuilder holds a lot of oppeal to me. It’s designed for buy and hold strategies.

What about other alternatives? If you have more than $25,000 to invest, you can get the same service for free from Bank of America. And if you’re willing to jump through a lot of hoops in the setup process, you can get a similar service free from Zecco.com – I have had a lot of difficulty with their signup process in the past.

J.D. wrote an excellent article a while back on the pros and cons of Sharebuilder, but my take is that if you’re a buy-and-hold kind of guy and don’t want to invest a lot of time in the mechanics of it, Sharebuilder is a great way to go up to $25K.

Trent, did your self-discipline (e.g. your schedule) come about after your financial meltdown, or have you always lived — at least partially — with that degree of self-discipline? Obviously you didn’t always financially, but I’m curious how much of your discipline was already in place and ready to be “deployed” for the purposes of financial et al. growth.
– Chris

I think I’ve always been fairly self-disciplined, but it had to be drawn out of me by situations that I faced. My first job forced me to organize many of my work habits. My first child forced me to gain some discipline with my personal habits and how I spent my free time. My financial meltdown forced me to get organized about my money. The success of The Simple Dollar finally forced me to get serious about my writing habits.

I think the basic character traits for organization were there, but I never had any impetus for using them. When events in my life forced them to come out, they did, and after they came out, they were hard to put back in the box.

Hey Trent, I had a math-related question for you about how you figure your net worth and your debt changes. Do you figure those out starting with a the statements from the previous month, or did you pick an arbitrary starting point and are using those for your percent gains and loses?
– Tom

I started all of my net worth calculations with a baseline – the first month after my financial meltdown. After that, my focus was on positive changes month to month. I like looking at long-term changes for fun, but my big motivation is usually just the next month. How can I maximize the gap between earning and spending that month? The better I do with that, the more financially ahead I get over the long haul.

So, just start with a baseline – this month, or a previous month where you have data. Then compare everything to that. Are you improving over time? Are you improving at the rate you want? Hopefully, the answer to both is yes.

Do you think America is losing its family values fabric (I mean, family life, marital life, care for elders, togetherness getting thoroughly messed up) because of too much focus on moneymaking? If yes, what are the primary reasons for such a degradation in family happiness?
– WhirlMind

I think the real problem is that America (and much of the Western world) is moving from a community and family perspective to an individual perspective. I think culture in general has moved towards glorifying the individual instead of focusing on the community. It’s more important to be a “star” than it is to be a member of a group who makes a positive contribution to society.

Take music, for example. A hundred years ago, music was enjoyed communally, with musicians in public environments. After the advent of radio, that communal sense went away, as people moved from the community to listen into their own homes with their family. A few more technological progressions and we’re in the era of the iPod, where people listen in private to the exclusion of others.

I used to live fairly near an Amish community, and I once watched them all get together on a Friday and raise a barn in a day. A community of people got together and did something to help one individual but in actuality helped the community as a whole.

Can you imagine a whole neighborhood getting together to help the new guy on the block build his house?

Why do the names on your blog roll always rotate? I usually start my daily blog reviews with your site and use your links to go to my other favorites. I get annoyed when sometimes they are there, and sometimes they are not.
– Sarah

I have about 50 blogs total that I want to link to, but I’ve discovered that each blog gets more clicks overall if each page shows just twenty of those blogs at random because the list is shorter and more accessible, plus it changes all the time. Blogs are shown only on 40% of pages, but the click count went up a huge amount when I made this change.

So, I do it because I like the sites on my blogroll and I’ll do whatever it takes to get them the most clicks.

You’ve said before you started dating your future wife in college. What did you do for cheap, frugal dates with your wife when you were in college?
– Nicole

Our dates were usually extremely simple. We went on long walks. We went to the “dollar theatre” almost every weekend, where older films were shown on the big screen for a dollar a pop. We ate out in ethnic areas where there were cheap, delicious meals. We hit student group meetings all the time, particularly ones with free food. But we also spent a lot of money, too.

There are so many possibilities on a large college campus for inexpensive or free entertainment that you can engage in together that you’d be a fool not to take it. Look around for lists of on-campus activities – start at your student union.

Besides writing and reading and playing with your kids, what do you do for fun?
– Annie

I really enjoy playing board games – I’d play Ticket to Ride every day if I could. I love card games, too. I enjoy playing basketball. I love to cook – I’ll happily invest two or three hours into a meal just to produce something sublime, like a “low and slow” all day barbecue or from-scratch pasta. I play video games some – I have a Wii and will play a bunch for a few days, then not touch it for a month. I like tinkering with simple electronics, like the stuff you’ll find in Make magazine.

That stuff pretty much fills up any spare time that I have.

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