Reader Mailbag #4

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.
Why television breaks your wallet (my family watches very little television – the only program I’ve seen in the last two and a half weeks was a single episode of Lost – no movies, either)
Ten tips for talking money with your spouse
A simple explanation of how tax brackets actually work
Some inexpensive wine recommendations

And now, a nice healthy batch of reader questions, starting off with a doozy.

Can you succinctly (maybe you already have) explain HOW you are making money through blogging? I know it’s ads, but do people just have to click on the ads, or do they have to follow through with purchases? How many blogs do you have going? Thanks!
– Susannah

I make money via blogging because of the ads, of course. Each time a page loads at The Simple Dollar, on your computer or anyone else’s, I make a fraction of a cent on average. I’m paid mostly based on the ad itself merely being displayed – some of the ads only pay me due to clicks, but they’re mixed in and on the rare side. If you’re a reader who just wants to support me, please don’t click on ads under the idea that a click will pay me – just click on any that actually interest you. I also make some money via the Downloadables on the right hand menu bar – they’re only $2 a pop, but they do add up for me.

The thing is that almost all blogs out there on the internet – the kind where people talk about their pet cat and such, or ones that are very unfocused about the topics they write about, or are written in very poor grammar – don’t get a lot of traffic. Even the most popular personal blogs don’t get above about 1,000 page views a day. Let’s say an average blog – mine or anyone else’s – makes a hypothetical half a cent for each page view (I don’t know for sure what I actually make, so I’m pulling an estimated number out of my hat here). A blog that gets 1,000 page views a day would thus earn $5 a day from their blog because of the displayed ads. Not bad for pocket money.

Now, take a peek at the traffic The Simple Dollar gets. When I peeked at this link just now, it estimated I was getting 25,000 page views a day on average over the last week. At a half cent per page view, that adds up to about $125 on an average day. (Again, note I pulled the “half cent per page view” out of thin air).

Each individual reader doesn’t contribute that much to that amount – if someone looks at three pages in a day, they’re adding a cent and a half. The power is in the volume. I have a large audience, and it’s the volume of that audience that makes it work. Honestly, there aren’t many blogs in the world that ramp up to that level of traffic – the only one I know of that has comparable traffic in the personal finance genre is Get Rich Slowly, and we’re roughly on par with each other.

So, how does one get a blog to that level of traffic? There’s really only one way: write stuff people want to read and then try to make it possible for people to find it and share it with others. The only way to do that is to find a topic you’re passionate about, write about it all the time, and try to hone your writing skills and find your voice along the way.

I’ve come to view a blog as being something like a carnival. There are people all over the place shouting for the attention of people. If you’re not saying something valuable and compelling, well, there are thousands of other booths to see.

It’s not easy. I wrote like a madman over the first year of The Simple Dollar and my audience was small – it grew to this level gradually, not overnight. No success would have happened without the support of a lot of readers who share what I’ve written with others.

If you want to support an independent blog, here’s the single best thing you can do. When you find an article you like at that blog, send the URL for that article to people you know who might enjoy reading it. Also, if one gets a book published or has something downloadable that you can buy, pick it up if it interests you. Another way is that if they’re talking about a book and offer a link to Amazon for that book, use their link to buy it – Amazon usually throws a few pennies back to the blogger for those kinds of purchases. Only click on ads on their site if they are truly interesting to you.

As for other blogs, I currently just write The Simple Dollar. I am tentatively planning a food-oriented blog that will launch on May 1.

How do you handle something you’d rather not do? There is always that one task that makes one’s brain try to ruin the whole process before it will submit to doing it.
– Michael

When I have something I’d rather not do on my list of “stuff I need to do today,” I do it first. It’s the first thing in the day that I tackle.

Why? Most of the things I have to do in a day right now are things I enjoy doing. Thus, I use those things I enjoy as a carrot, a way to lure myself through the slog of stuff I don’t want to do. For example, today I really needed to clean the bathroom and also do some laundry, both tasks I loathe doing. Instead of putting them off and diving into writing – something I love to do – I did those tasks first thing in the morning just as fast as I could. Along the way, I was mostly thinking about the enjoyable things I was going to be doing later on in the day and it gave me a carrot to chase.

Now I’m sitting here writing, doing something I enjoy, while the laundry is running downstairs. The tasks I didn’t want to do are done, I feel a sense of accomplishment, and it’s only 8:30 in the morning. Even better, the rest of the day is filled with stuff I want to be doing.

If you were standing in front of a grocery store, had a five dollar bill in your hand, and had to spend it on one meal for yourself (not your family)…what would you walk out of the grocery store with?
– MS

Frugal grocery shopping, eh? My answer would probably surprise you – I’d go to the deli section, get a half pound of sun dried tomato turkey breast (about $3.50) and a loaf of whole wheat bread ($1.50 or so – although I’d probably prefer to make my own bread). Then I’d have turkey sandwiches. Seriously – I love deli-style sandwiches.

Another option: a bag of dried black beans, a package of tortillas, a fresh tomato, and whatever cheese I could afford. Bean burritos – that actually sounds really good right now.

I have a gift card (American Express) for $100.00 that I’m thinking about how to spend it. It’s quite a bit a money for me – DH and I are on a low fixed income. I “need” so many things. Do I get personal (new sandals for summer, I don’t have any), household linens (my bottom sheet is torn, my bathroom rugs are really old), small kitchen electrics (could use a slow cooker, and/or a rice cooker). Is there some way I can turn it into cash and put it in our (again small) savings account? So many choices. Right now I’m leaning toward either 1) new shoes or 2) convert to cash if I can and put in savings.
– Karen

It depends on how the gift was given. If it was very much in a “spend it however you want” perspective, I’d probably use it on groceries, then pull $100 out of my checking and put it into savings.

However, most gift cards I’ve ever received usually were with a push to spend it on something fun. If that were the case, I’d definitely go personal with it – in fact, I’d probably head directly to Williams-Sonoma, which is where I usually go if I’m ever gifted a small amount of “fun money.”

I’m such a foodie.

Let’s get controversial!

1. What’s your stance on gay marriage?
2. What’s your stance on abortion?
2. Are you a Republican or Democrat and who are you supporting in the upcoming elections?
3. Would you give up your right to vote for a million dollars?

– Money Blue Book

1. My personal feelings aside, the government should have minimal interference with how people should live their lives Thus, this one’s a no-brainer for me. I actually think government shouldn’t recognize marriages, period, but that the government should instead recognize any civil union between two adult people. Marriage is a social and religious construct, not a governmental one.

2. I would never recommend an abortion to any woman – I find the procedure abhorrent. However, I’m not a medical professional nor a psychological one, and thus it’s not fair for me to make a judgement about what’s medically or psychologically the best decision for a woman to make during an unwanted pregnancy. I am a male who isn’t trained in medicine nor in psychology – what right do I have to make a statement about this issue? The government shouldn’t, either. The only authorities I’d ever look towards for guidance on abortion issues are the American Medical Association and the American Psychological Association – these groups are intimately involved in the nuance of such issues. My wife says that makes me pro choice – I think such black-and-white labeling is ridiculous.

3. I have, at various times, been registered both Republican and Democrat and also “affiliated” Libertarian (as you can’t register with that party in Iowa). Of the candidates that appear to have a good chance to be on my Presidential ballot (meaning Obama, Clinton, and McCain), I support Barack Obama because his stances on the issues most important to me (government transparency, protection of civil liberties, a much less interventionist foreign policy) are far closer to my own than Clinton or McCain.

4. My presidential vote, sure. Not my local vote, though, as the local people are the ones that actually shape your day to day life in tons of ways.

Do you think financial bloggers post their honest and unbiased opinion on personal finance ? Are they following the same advise that they post for readers?
– Anand

This is a question that expands to all financial writers – some do, some don’t.

The simple fact of the matter is that even if you know the right thing to do when it comes to money, it’s still very easy to do the wrong thing. I mess up all the time – I buy stuff I don’t really need, like my computer setup.

Are any financial writers flagrantly dishonest? I imagine some are, but most of the ones I know well are pretty honest. Take me, for example – I often “blur” personal details about my life simply for privacy’s sake (things like exact numbers, personal relationships, and such), but I don’t change the story – if I did, there’d be no value in it.

Do I follow my own advice? I wouldn’t be able to switch to writing full time if I didn’t – I’d be buying stupid stuff and probably still living in that old shoebox apartment while still working a nine to five job.

what kind of music do you listen to?
– Nina

I mostly like well-constructed pop songs (stuff like Aimee Mann and Jeff Buckley) and get-me-up-out-of-my-seat rock music (like early AC/DC or Van Halen). I’m often amused by people who are confused when I listen to something subtle and mellow like Hallelujah and follow it with Let There Be Rock.

If I were stuck on a desert island and had only one album to listen to for the rest of my life, it would be Bachelor No. 2 by Aimee Mann.

my boyfriend and i are planning on moving in together after 6 years of dating (4 of which was long distance). he is relocating to where i live to be with me. we are both frugal in different ways however i have some $ saved while he doesn’t since he’s just graduated. what advice can you give people moving in together to start their lives?
– j

My first reaction would be to be very sure that this relationship will last long term before merging your finances. If you merge them immediately then break up in a few months, you’ll wind up feeling like it was a giant mistake, as you’ll be rushing around trying to remove names from accounts, dividing up assets, and so forth. Be careful – I’ve seen it be very nasty before.

When you’re confident about a long term commitment to each other, there are a lot of things to talk about. The first question is whether or not you should combine your finances at all – and it’s not the automatic answer you might think it is. If you combine your finances and you’re not on the same page, it will be a constant source of irritation and can build into a devastating end to the relationship.

After that, there are lots of things to talk about, but my suggestion is focusing in on goals that you share. What do you want to be doing in five years? In twenty years? Once these are in alignment, look into how you can reach those goals and what you both need to do to get there.

If you want to read more, Smart Couples Finish Rich is a good place to start.

How do you manage your writing process? Do you sit down and write the whole post, or do you have a bunch of in-progress articles which you start with outlines, etc. and finish up later? With your post frequency and the fact that you have said you write well in advance, it seems like it would get complicated. What do write your posts with-Word, text editor, etc. Do you keep them all in separate files or write them in wordpress?
– RC

I keep an “idea notebook” with me at all times, as I’ll often have post ideas at the oddest moments (for some reason, lately I’ve had a ton of ideas while grocery shopping). In that idea notebook, I’ll list ideas for posts and sometimes even sketch out the points I want to cover.

When I’m in a writing session, I use a basic text editor – Notepad for Windows or SimpleText for Mac. I usually start with a list of the points I want to cover, then I go through and flesh each of them out. Then I read the entire post again, make some grammatical fixes, and usually post it pretty quickly after that. I save a copy locally, too. I very rarely do any editing within WordPress at all.

I maintain a calendar listing the posts I have scheduled for specific days so that when I write a post, I can pencil it in for a certain day and, if I come up with an urgent one I want to post right now, I can move stuff around on the calendar and then change dates within WordPress.

That’s pretty much it. My actual writing area is pretty sparse – just a big monitor with a keyboard and a mouse and that’s about it in my visual range.

Financial Armageddon? First, let me say that I’ve enjoyed reading your blog off and on for the last few months; however, one question has nagged at me – that is if the “financial armageddon” you claimed to have faced was ever really as dire as you portrayed. It seems to me you turned around your situation with minimal effort and, as often and excessively noted through your posts, now have a huge emergency fund, plenty of money for debt payments, a diversified portfolio, additional savings, and the financial freedom or flexibility to quit your job. Thus, you’ve never really had to manage and cope with debt and finances as many of your readers may have, because your debt (in relation to your income) has never very great to begin with (which I applaud, btw). Another commenter phrased it another way, and asked if finance bloggers actually follow their own advice. I guess my question is more specific – have you ever really needed -truthfully- to follow the advice on debt management and frugality you’ve espoused?
– Greyscott

That’s more a matter for you to judge, not me. I made about $50K a year when I hit the wall. I had $17K in credit card debts, about $40K in student loans, and about $7K or so on a truck loan. My checking account was empty and I had a big handful of bills (both debt repayments and utilities/rent) due before my next paycheck. That’s a pretty bad situation – obviously, it could have been worse, but it was bad enough that it really scared me for the first time in my life. That to me is what a financial armageddon is – it’s when you realize in your inner core that something is genuinely wrong and is damaging your entire life.

I wrote about what I did in the immediate aftermath of that situation. More importantly, though, I scared myself on a deep enough level that I began to rethink my life in a much broader sense, and right at that time when my mind was asking some deep fundamental questions, I read Your Money or Your Life, which pretty much did change my life.

Did I need to go as hardcore as I did? Probably not. Am I glad I did? You bet I am. It changed my life in ways that I couldn’t imagine two years ago when I was holding my son and finally realizing how badly I’d been messing up. As a result, I feel really strongly that taking a radical look at your life and thinking about some of your basic choices is a vital thing, and a healthy dose of frugality and debt reduction is good for everyone.

Put up a picture, Trent! I can’t take an author seriously unless I can imagine what he looks like, how he might speak the information, etc.
– Ethan

It’s been here all along on the about page, but here it is for everyone to see. I’ve got to wonder if anyone out there reading is going to see the picture and have it suddenly click in their mind, “Oh my, I know him!


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