Updated on 01.30.09

Reader Mailbag #48

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.
Debt Reduction and Debt Elimination Programs: What’s the Catch?
The Big Debate: Pay Off Debt or Save for Retirement?
One Big Way to Get Intense About Financial Independence

And now for some reader questions!

One of my goals is to learn more about home repair so I can be ready for some DIY projects (currently live in an apartment but am preparing to buy a house in a few years)… Hands-on experience is the best, so I’m sending out some queries to family/friends to do some things for them in exchange for an education, but I’m also a very reading-oriented learner. To that end, can you recommend any DIY home repair books that go into sufficient detail for a newbie?
– Aristotle

Personally, I’ve loved the Reader’s Digest Fix It Yourself and Do It Yourself manuals. They’ve helped me with tons of different tasks over the past few years. The focus of each book is a bit different – the “fix it yourself” is more focused on repairing problems, while the other one is more focused on doing upgrades.

I also wouldn’t overlook internet resources for specific tasks. You should always check YouTube and Instructables if you’re trying a new project. Some of the “how tos” offered by those sites are tremendous and even exceed some of the published versions I’ve seen.

When you originally asked the question, several readers recommended the “1-2-3” books available at your local Home Depot. I’ve glanced through these and found that they go really in depth into specific areas. I think they’re good if you’re really interested in mastering a specific topic (like plumbing), but I’d start off with a more general book.

Trent, how is the iPod Touch? What do you use it mostly for? Music? Internet? No wait, I know – Twitter!
– the weakonomist

I mostly use it for web browsing (mostly checking blogs when I have some time to burn), checking the weather, and Remember the Milk. I’ve started using it as a pedometer, too, with the Nike+ iPod kit – I figured out how to tie the little pedometer sensor onto any kind of shoe.

I have a few games on it that I’ve played while waiting for appointments and on long car rides, but most of them are overly simple. The best iPod Touch game I’ve played (by far) is Rolando – an action puzzle game where you have to tilt the iPod to get balls to roll into certain places.

We are getting ready to come into a sum of money due to a death in the family a few months ago. However, we do not know how to best put the money to use. Should we pay off our unsecured debt (we have a lot) or create a larger emergency fund (we only have about one month’s worth of bills)?
– Chris

It depends on whether you’ve got children or not, honestly. If you have kids, I’d make sure my emergency fund was larger. If it’s just the two of you, I’d probably focus on paying off the debt.

Why? If you have kids, the last thing you want to do is radically disrupt their life because of a job loss or some other financial event in your life. Having a large emergency fund provides some security against such a scenario.

If you’re merely a couple without kids, you’re much better positioned to deal with abrupt financial changes – you don’t have dependents, after all. I might still buff up that emergency fund a bit, but my focus would be on reducing that big mountain of debt, which is sucking you dry via finance charges.

Trent: Off topic from the coversation but I appreciate your honesty on sometimes feeling the urge to quit blogging. My question is how much different is blogging for fun compared to doing it for a living? I mean I could quit right now and nobody would care nor would anybody be affected. If you were to quit thousands of people would be upset and I’m sure you’d quickly look for new work to support your family.

For me I feel like quitting everytime I put a lot of effort into an article and only 50 people read it. When you’re making zero money and have few readers the urge to quit is greated. How does one overcome this urge?
– Studenomics

I do feel a certain “push” to keep writing because of the expectations of the audience, something which doesn’t exist if you don’t have much of an audience. There’s also a financial need to keep writing, too – it provides a portion of our household income.

But those aren’t the reason that I continue to write – for the most part. Sure, there are times where I feel like I have to come up with an entry, but most days I simply enjoy writing. I simply love coming up with ideas and finding ways to frame them so that they can potentially provide a positive impact on a reader’s life. That, to me, is incredibly exciting, and it’s why I keep writing so many articles for The Simple Dollar. My real motivation is to have an article out there so that when a person who really needs that advice is searching for answers on Google, they might come across it, be inspired, and make a positive change in their life.

That’s an internal motivation. Expectations and income are external motivations, and I’ve come to find that external motivations aren’t particularly good at keeping me motivated over the long term. It sounds to me that blogging is largely filled with external motivations for you. Perhaps you should seek out internal motivations.

Interest rates have dropped to the point that it makes sense for DH & I to refi our mortgage. We are six years into a thirty year loan. DH just turned forty years old. Our two options: 1)refi to another thirty-year loan (effectively tacking on six years) and reduce our payment by $400 monthly (helpful considering we have a large & growing family and don’t necessarily expect enormous income growth relative to expenses growing with the kids) or 2) refi to a twenty-year loan at a cost of only about an additional $25 monthly. The first has the appeal of more cash on hand, the second gets us out of mortgage payments slightly sooner. This is our “forever” house, btw– I fully intend to move out of it when they carry me out in a box.
– Margaret

When are you planning on retiring? If you fully plan on working until you’re seventy or older, the thirty year mortgage makes a lot of sense. It provides you plenty of breathing room as your kids are growing up, allowing you to provide great experiences for them in their childhood. However, you’ll effectively “pay” for that later on.

Alternately, you may want to retire at sixty two, giving you more years of health in retirement – years to spend with grandchildren, traveling with your partner, and so on.

I think you should consider which of these two paths sounds most appealing to you. When you know, then you’ll have a good idea as to which mortgage plan you should choose.

I’ve enjoyed a couple of your “Dowloadables” products and am curious about how many you sell per month? Of the four you have listed, which title is the most popular?
– Frugal Dad

I have four downloadables available for $2 each, which appear on the right hand menu:
31 Days to Fix Your Finances: A series of exercises helping you center your financial life around your own core values.
The One Hour Project: Thirty one-hour projects you can do to improve your financial situation.
Twenty Great Ideas: Twenty personal finance and development books, boiled down to three to five pages each.
Building a Better Blog: A collection of all of my blogging techniques – great reading if you’re thinking of starting a blog of your own.

These are actually collections of earlier Simple Dollar posts, formatted into a downloadable PDF that you can share freely with your friends.

I sell between 60 and 100 of these in a typical month, about half of which are “31 Days to Fix Your Finances.” This has made me believe the effort is worthwhile, and I’m thinking of making a few more of them.

What type of cellular phone provider do you use? what kind of phone and services do you opt for?
– Louie

I use a regional service provider, U.S. Cellular. Given that I spend 98% of my time in the upper Midwest, which is the area where U.S. Cellular provides great coverage and service, they’re a natural fit. There happens to be a tower not too far from my home, so I get extremely good service from home all the time.

Their phone selection isn’t particularly great, though they do have a wide selection of Blackberries. Quite honestly, though, I tend to stick with cheaper cell phones. I’ve had my current phone for a few years now and it’s looking awfully worn.

We have a limited minutes plan that’s actually pretty cheap each month. We’ve looked at other services and not found a compelling price-based reason to jump ship, especially since we’re happy with the service.

Have you heard of anyone ‘diversifying’ their emergency fund into multiple currencies? Given the current financial chaos, and uncertainty about where deflation/inflation might go, I’ve been wondering if having 100% of my emergency fund invested in dollars is the best idea. Holding other currencies seems less efficient (due to fees and lower interest rates), and certainly carries its own risks, but do you have any thoughts on it?
– spautz

I would not worry about having my emergency fund in multiple currencies. An emergency fund is intended to be just a few months’ worth of cash to get you through a short term situation. I would always keep that in my local currency.

Beyond that, you’re beginning to ask an investing question with regards to how to handle the cash portion of your portfolio. In that case, I think it’s completely reasonable to diversify into different currencies – and if I were doing that, I’d go far beyond the euro and buy rubles and yuan as well, just for starters.

Just avoid the Zimbabwean dollar. Trust me.

Do you speak any foreign languages? Do you believe it is worth it for Americans to spend time to learn a foreign language?
– Frugal Bachelor

I do not speak any foreign languages. I can understand limited amounts of Spanish and can piece out bits of other language, but not enough to even attempt to speak them.

Having said that, I think learning a foreign language is a valuable skill for anyone to learn. Not only does it provide you with a new and valuable skill, it forces you to work with your overall communication and language skills, improving you in other ways as well.

If you’d like to learn a language but don’t know which one, consider one that would have a clear overlap with your career. Without that, consider a language used in a nation that you would enjoy visiting (particularly for a long term visit).

I’m a college student with limited income. I commute to both work and school (about 35 miles one way, 5 days a week). I usually just break even every month, though lately I’ve been working more hours, I make $8/hr. My car will be needing some work done, it just went over the 100k mark, but I don’t have the money to have it done. however, I just received a citi dividends credit card, I applied to take advantage of the cash back rewards.
I’m wondering if I should get all the maintenance done on my car and charge it to the card then slowly pay down the balance while the 0% APR still applies for the first 6 months. What are your thoughts on this?

– Brian

Putting a large amount on a credit card is a risk, particularly if you’re not sitting on the cash to pay it all at once. Having said that, if your car requires work and you don’t have the money on hand to cover it, you will most likely be using credit to pay for that bill. In that case, your 0% APR card is probably your best option.

My suggestion would be to start cutting your spending right now in any way you can. Can you carpool with someone for that commute, even just a day or two a week? Are there other expenses you can reduce? Look for things that will consistently reduce your bottom line (like carpooling or being more energy efficient) rather than one time savings (like selling DVDs). Good luck!

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

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  1. I’m a huge fan of enigmo, the water puzzle game on my iphone. It’s the only app I’ve paid for (99 cents).

    I’ve used the Nike+ with the ipod nano for a year or so now. I’m a huge fan. The Nike+ website is also fantastic.

  2. J says:

    Margaret — There’s no reason the 30 year mortgage can’t be a 20-year mortgage. Take out the 30 year mortgage and pay it like it’s the 20 year if you can afford to.

    Or, better yet, refi to the 30 year, then pay off any other debts first with the $400/month savings and then move onto paying the mortgage down more quickly — basically a debt snowball.

  3. JonFrance says:

    It is fairly easy to diversify in currencies using ETFs, which are funds that trade on the stock market, so you can buy and sell them in any investment account that lets you buy and sell stocks. They pay monthly ‘dividends’ that are the interest rate in the currency in question, so it is like having the money in a savings account in euros, yen, pesos, or Swiss francs (tickers FXE, FXY, FXM, FXF).

    NB that although this can be handy for diversification, currency fluctuations can be very volatile, and depend on so many factors that they are very difficult to predict, so actively trading these would be considered a high-risk investment strategy. So I agree with Trent that it’s not something to do with your emergency fund–if you bought FXB and/or FXS last summer, for instance, you’re down 30%, which could be disasterous in an emergency fund!

    But if you have an investment fund with a portion in cash, then this kind of currency diversification can make sense.

  4. The Personal Finance Playbook says:

    I personally feel that it would be best to stay away from currencies as an investment. Leave that to Hedge funds and other investment professionals that specialize in them. I don’t think there’s a reason for an individual investor to be in currencies. That being said, I agree that the best way to do that is through an ETF. Warren Buffett’s dictum is to only invest in businesses you can understand. If you understand the underlying economic fundamentals of a particular currency, you might consider it for investment purposes. I think investing in foreign companies is the more prudent way to diversify if you are worried about the American economy.

  5. Frugal Dad says:

    Thanks for addressing my question on the “downloadables.” It does seem to have been a worthy investment of time in that the income you make from the finished product is fairly passive. Looking forward to any new series you might decide to convert to eBook format.

  6. john d says:


    I agree with Comment #2. Here is the way it was explained to me. If you look at your amortization schedule to find the principle amount of your NEXT payment, and you pay that amount extra THIS month, then you are potentially paying off your loan twice as fast.

    The other thing to consider, in my opinion, isn’t how long you have been in the house necessarily, rather how long do you intend to stay there.

  7. Saver Queen says:

    Studenomics, that’s a really interesting question. I know what you mean that sometimes it is frustrating when you feel you’ve got a really great post and only get a few comments on it. I get so happy when I get a lot of success and then feel let down when the numbers fall.

    It’s funny what posts capture readers attention. Sometimes the posts I write that I think will be really captivating don’t spark any discussion while others that I wouldn’t expect do. I still haven’t solved the mystery of what readers really want to hear about.

  8. Tony says:

    Have you played Fallout 3? I know you love video games that you get some bang for your buck and this is one of those games that you can play for over a hundred hours.

  9. CathyG says:

    I’m with J and John D on the mortgage – comments 2 and 6. Take out the 30-year mortgage, but psych yourself up to pay the 20-year amount every month (or even your current amount that you are already paying). It will give you the flexibility to sometimes pay only the 30-year amount if you need that extra cash that month, but will still put you on a track to have it paid so much sooner.

    A few things to watch out for – make sure to mark the extra payment “PRINCIPLE ONLY”, otherwise they will apply it to your interest and that doesn’t help at all. And make sure to really get it in your head that your “regular” payment is the higher one and only use the lower when you need to, otherwise you may fall into the trap of always paying the lower amount and thinking that someday you’ll get your money in order to be able to pay the higher one, but someday never comes. Money always tends to fill up the available space, so don’t give it any space to start with!!

  10. Faculties says:

    But the thing about a 20-year mortgage is that the interest will be lower than a 30-year mortgage. The interest on a 15-year mortgage will be even lower. I refinanced on a 10-year mortgage a while ago and got 4.5%, which lowered the payments dramatically. Don’t underestimate the difference a lower interest rate can make; run the numbers before you decide.

  11. Seth Rowland says:

    I think a good way to learn skills around the house is to volunteer with Habitat for Humanity. There are projects around the country and you can help out throughout the building process. Not only do you develop the skills, but you help a great cause as well!

  12. SP says:

    Personally, I wished you’d stop advising people to base their emergency fund on whether or not they have kids. EVERYONE should be able to support themselves (or their family) for more than a month, even if they don’t have to worry about little ones. Yes, you need more cash if you have more to support, but you don’t need more months of security. You need security even if it is just you.

    Other than that, I want to say thanks for these mailbags. They are really interesting to read!
    Your efund should be based on your risk, and if you have family/friends to fall back on (someone in their early 20s might skimp on it, knowing mom and dad would bail them out).

  13. SP says:

    Personally, I wished you’d stop advising people to base their emergency fund on whether or not they have kids. EVERYONE should be able to support themselves (or their family) for more than a month, even if they don’t have to worry about little ones. Yes, you need more cash if you have more to support, but you don’t need more months of security. You need security even if it is just you.

    Your efund should be based on your risk, and if you have family/friends to fall back on (someone in their early 20s might skimp on it, knowing mom and dad would bail them out).

    Other than that, I want to say thanks for these mailbags. They are really interesting to read!

  14. SteveJ says:

    Adding to the poster’s above, I’d run the numbers with the 30yr and paying extra every month vs the 20yr. Like J said, you may have other debts you’re more worried about to pay off first, so you might start applying the extra $400 (or more) later on.

    Along those lines, when I was buying my house and running numbers, I found the Mortgage Professor’s calculators and spreadsheets to be extremely helpful. I’m a numbers guy so those tools were all great for me to see exactly what could happen if I did this or that each month. I still use one of the spreadsheets with my current mortgage to see how much I’ll save in interest if I pay extra this month. Right now I get about a 450% return ($45 extra this month saves me $207 in interest), which is a powerful incentive.


    Following up with a question, if anyone knows of an online site where I can see the costs at getting a refi with 98% LTV and no PMI, I’d love to check it out. I got one of the last 100% mortgages (no PMI) and my rate is decent, but it isn’t anywhere near the 4.5% I see advertised. I probably just need to sit down with a broker.

  15. Studenomics says:

    @Trent Thanks for answering my question! I posted that in one of the comments sections a while back and wondered why you never responded.

    I do have internal motivations for blogging; I do it because I love to help others that are in a similar position to mine, to meet other great people that I can discuss finances with, and to make a difference.

    The reason I asked the question is because it seems like it’s hard to make a difference unless you have a lot of readers. I agree with saver queen in the sense that sometimes you read another blog where there’s an interesting discussion of 50 comments then on your blog there’s zero comments.

    Thanks for taking the time to answer my question.

  16. vguy505 says:

    I have a question: I have a 12-month CD ladder at ING direct, and right now CDs are earning less than just the savings account. A 12 month CD returns 2.00% while savings earns 2.4%. I know it’s not going to be a huge difference because the CD is less than $1,000, but, when the next rollover comes should I just keep the money in savings earning higher interest? Or should I take this as a sign the savings rate may be lowered soon and I should consider myself “lucky” to lock in a measly 2%?

  17. Anne says:

    I have to respectfully disagree w/your advice to the couple who are going to receive an inheritance, and have a huge mound of credit card debt. It’s a natural reaction to want to put the money there, and some could go there, but not all. There is an axiom: 1/3 to the past (credit card debt); 1/3 to the present (emergency funds); and 1/3 to the future (invest in retirement fund or long-term investments). The problem w/putting most or all into the credit card debt is that it sets up a cycle of debting. There will be no cushion for the next emergency and they will start debting again. And, in the long run, investing some of the money will pay off far into the future. Of course, they should also create a plan to whittle down that credit card debt, following your recommendations in other posts.

  18. Johanna says:

    @SP: I too get annoyed sometimes by Trent’s tendency to make blanket statements that people without kids don’t really need to do this, that, or the other thing. But he does have a point here. If there are only adults in your household, then what level of priority you give to your emergency fund can be based on your collective tolerance for risk, since you all know what you’re getting yourselves into. But with kids – especially young ones – it’s not fair to subject them to risky situations that they had no hand in creating.

    But I wish that Trent had mentioned some of the other factors that might influence the imporance of having a larger emergency fund. For example, how secure is your job? (Job loss is a possibility for anyone, but people in some lines of work are in better shape than others.) Do you have health insurance? (If not, maybe you’d better get it before you do anything else with the windfall money.) Is there more than one income earner in the household, and if so, how likely is it that you’ll both lose your jobs at the same time? As SP said, do you have family and friends who could help you out if you needed it? Could you act quickly to reduce your monthly expenses? Do you have things you could sell? And so forth. There’s a lot more to consider here than just kids.

  19. Tom says:

    In the 20 vs. 30-year mortgage debate, I argue for the 30, which preserves the flexibility of paying additional principle or not. Some months, the additional $400 may not be needed; but with growing kids it may come in handy for trips to the ER or to Disneyland. The price you pay for this privilege is the slightly higher rate, typically 1/2%, which is cheap insurance for peace of mind.

  20. guinness416 says:

    “The Black and Decker Complete Photo Guide to Home Repair” (I think that’s the title) is a GREAT reference to have at home for all of the little repairs that come up. It also weighs about six tonnes, so effectively doubles as a weapon if you should ever need one.

  21. Amy says:

    In response to “Frugal Bachelor” — I think it’s absolutely worth it for Americans to learn a foreign language.

    1) It makes you more marketable to employers. In Texas, Florida, California, or any other state with high percentage of Spanish-speaking residents, job candidates who also speak Spanish in addition to English are HIGHLY desirable in most professions. In Maine, French would probably be considered very useful. For librarians or flight attendants/employees, any foreign language knowledge is valuable. And so on….

    2) Learning another language exercises your brain in new ways, which is believed to help stave off Alzheimer’s and other forms of dementia.

    3) Americans learning foreign languages are helping to show the world that we believe there IS a world beyond our own borders. We have a lot of recovery work to do to show the rest of the world that we do not think the entire universe revolves around just us.

  22. Nienke says:

    I would recommend to anyone to learn a different language; it really does open new doors, not to mention a new world!

  23. bradc says:

    Lots of good advice regarding the 20yr versus 30yr mortgage here in the comments.
    Take the 30 year year. You’ll increase your monthly cash flow by $400. This give you financial options which the 20 year does not.
    A) use the $400 to pay the mortgage down faster. Whether you indicate ‘principle only’ or for interest and principle it’s all paying down the debt. Depending on your balance you could pay it off in under 20 years. Not possible with the 20year at the same payments.
    B) increased retirement savings. most people don’t have enough.
    C) pay off high cost debt — credit cards, cars loans, etc
    D) college fund — nothing like giving your kids the gift of zero debt (or minimal) when they leave college.
    E) Emergency fund

    Many options with the 30yr fixed that you don’t get with the 20yr.

  24. Suzie says:

    In response to Brian’s question: I am learning French and Spanish at school (I’m 18) and intend to start Mandarin in my spare time at university. I can speak a few words of German and Italian too (only a little more than “Hello”, “Goodbye” and “Where is the restaurant”!).

    It really transforms the way one can go on holiday as people tend to be very excited that you can speak to them properly, and once you have a good grip on the grammar and syntax of one language it makes learning another language in that etymological group so much easier. It also makes you appreciate English a lot more and really think about what you are saying.

    I personally think an evening class would be the best way to go about it, rather than language books or tapes, but I always find I learn better with people.

  25. Suzie says:

    Sorry – that was for Frugal Bachelor. My mistake!

  26. K says:

    for DIY projects, I got a “Home Improvement Guide – Ten Pound Books” as a gift and it goes into a lot of detail and is easy enough for someone with NO experience to pick up. And it covers almost everything.

  27. Torrilin says:

    What type of cellular phone provider do you use? what kind of phone and services do you opt for?

    My cell phone is my only phone. The times where I *really* need it are if I get hurt or sick and am away from home. Since I travel mostly by bike or foot, getting hurt could put me in a pretty bad situation. I also don’t talk on the phone a whole lot, and it’s far more likely that I need a phone in a strange city than anywhere else.

    For my purposes, AT&T was the best carrier choice. They have excellent local coverage, and their coverage is quite good in all the places I am likely to visit. And since I don’t use the phone a lot, it was best to go with a pay as you go service plan. Theirs allows me to buy 1000 minutes for $100, and allows free calls to any other AT&T user. This works out to be largely free local calling for me, so those 1000 minutes have lasted nicely.

    T-mobile offers a similar arrangement, but they do not have good coverage in any city that I’m likely to be in, and they don’t cover my home city at all.

    The main downside of AT&T’s pay as you go plan is the advertising. They refuse to listen if you tell them you do not want text message service, and they will send advertising text messages to you on a regular basis. And *you* pay for those advertising text messages. Really guys, I am giving you money. I am *happy* to give you money, for I greatly desire your service. That means you don’t need to try to upsell me or steal from me!

  28. Otis says:

    I would recommend a book if you’re really planning on doing a lot of things that it covers.

    However, you’re best off using the internet. One of my favorites is the This Old House’s How-To website. They helped me install a new exterior door this weekend and everything went really smoothly.


  29. Aristotle says:

    Thanks to Trent and others who’ve suggested sources for DIY info. Much appreciated! Can’t wait to get started… now I just need a house to fix.

    The TOH web site looks fantastic.

  30. Robin Crickman says:

    Trent, a question for a future Monday.

    Is there a directory or guide to blogs on finance
    and personal financial life that you can suggest.

    While I enjoy reading your material as a window
    into a world very different from my own, I would
    like to find something which is a bit closer to
    my life. I’m a member of your parents generation,
    a fairly rural farm dweller and without some of
    the debt burden that so weighs on your generation
    (thankfully). It seems health and wealth have
    eluded me, so I would like to make a grab for
    the wise part before all is lost.

  31. Courtney says:

    In terms of home repair, I HIGHLY recommend the Taunton Press. http://www.taunton.com/ They have a magazine called Fine Homebuilding, which is putatively aimed at professionals, but which is great for DIYers. They explain WHY you should do stuff, as well as easy fixes. Great online forum of professionals to ask, as well. I have given serious thought to buying all their back issues on CD.

    They put out books, as well. Just check their website or amazon.com I have the KidSpace Idea Book, as well as the plumbing one.

    Also, they do other great magazine/website/forums: Threads (sewing), Fine Cooking, Fine Gardening, Fine Woodworking. Love them, love them, love them.

  32. Mary Nash says:

    Can I claim my 27 year old son who lives with me as a dependent? He is on disability and receives a small Social Security check. My husband (who always did our taxes)moved out last year so I really would prefer not to communicate with him unless I have to. I don’t know what he did last year as my son has only been on disability for 2 years.

  33. JayJay says:

    Would it be a wise investment to put away cash in a stock that yields 6.6% currently? We have 6 months of cash in a savings account but would this be a smart move with all cash above and beyond the emergency and retirement and bills?

  34. Charlotte says:

    Trent… rubles?!

    When I was living in Russia (I only left in December – i.e. a month and a half ago) the ruble was 27/$1. Now it’s 36.42/$1.

    Please, please do research before you advise people to invest in one currency over another. Russia’s budget is completely gutted due to the drop in oil prices, and the ruble has devalued 23% in 6 months and is very, very likely to drop further. The last time the entire country defaulted on its debt was 10 years ago – and economic conditions in the country now are exactly the same as they were when that default happened. I expect the country to default on its debt and re-“value” the currency within this next year… which is why I left that country.

    Definitely don’t buy rubles. The Yuan, I agree with, however.

  35. Robyn says:

    Studenomics –
    if you decide to quit blogging, may I have your 50 readers?
    just kidding :)

  36. Mike McMahon says:

    We have approximately 3 years left on our home loan and 80+% of the monthly payment is going toward the principal. I can pay off the the balance now (money sitting in ING account) or continue monthly payments. The interest rate is 6.875%. Looks like we will lose the ability to itemized deductions for last year’s taxes. What are the factors I should weigh in making this decision?

  37. Chris says:

    Thank you for answering my question Trent regarding the inheritance. We do have kids who are 7, 14, and 20. In Trent’s defense he was not saying people without kids should not have an emergency fund, but was saying they were better able to handle the impact of a sudden financial burden which would cause a huge change. Kids have a more difficult time understanding these things. I think that is great advice, but was just one of the millions of possible factors. I appreciate your advice Trent.

    So for any that care, we put most of the money towards debt, gave some to my oldest to bail her out of debt, and added a little to the emergency fund. What did we get in return? My wife lost her job (layoff) and now we are down an income which was needed to pay our mortgage. However, because of the debt we paid, I was able to reduce our “snowball” to just above minimum payments so we can make it. Not the best solution, but we stay above water and keep our emergency fund.

    Thanks for all the comments again!

  38. I was always curious about the downloadables and how well they sell. 60–100/month sounds like they’re doing really well, what do you think the next series would look like? I could see the Intelligent Investor review being packaged up like that…it would be a pretty valuable service.

  39. Eric says:

    I am about to take out a mortgage with Wells Fargo Home Mortgage. What are the questions I need to be asking my banker and what is negotiable? Is there a site i can compare scenarios? We were just going to go with a 30 year fixed ~5% but the more I read the more questions I have.

  40. Kevin says:

    How is you New Year’s resolution coming along? Your mastery of the rubix cube. It’s time for an update! :-)

  41. ub says:

    A year ago you recommended TurboTax. Do you still recommend that suite? I have recently entered the work-force and will be grappling with a few issues (I no longer qualify to use the 1040EZ, I have to file in two states, I made several student loan interest payments…) Which version of TurboTax do you recommend?

  42. Cynthia Grant says:

    What software do you use for computer backups? I am currently doing automated backups nightly using EMC Retrospect (it came free with my external drive) but would rather use an open source program if a good one is available. I’ve looked through your excellent lists of open source software but didn’t see anything for backups.

  43. ReddH says:

    Hi there!
    I’m 25 and have no retirement savings. I am working diligently on paying off my debt and should have everything interest bearing taken care of by September. I’ve started a job with a new company and they don’t currently offer a 401(k) plan, but are anticipating starting one in 6 months. I’d really like to start working on retirement savings and I’m wondering if I should start a private 401(k), or a Roth IRA, or wait for my company to start their program, or some kind of combination. I would love to know what you recommend and if you also have any companies that you recommend I pursue these accounts with.

    Thanks for providing such a great blog!

  44. Roger says:

    Studenomics: Don’t give up; it takes time to build up a decent readership, and the best way to do it is to simply put yourself out there, like you did in this post. You’ve got at least one new reader as a result ;)

    As for all the other questions, your answers seem well reasoned and thoughtful, as always, Trent.

  45. Margaret says:

    what are your thoughts on the Discover credit card? Especially that deal with the cash back at the end of the year?

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