Updated on 06.01.09

Reader Mailbag #66

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.

I just turned twenty last month and want to know what else I can do for the sake of financial security. I have a savings plans with ING Direct, but I always see people saying “If I had started doing (blank) when I was twenty, I would be financially secure right now!” How do I learn how to invest, or where, or what into? What should I know about credit cards and banks? Is it good to be in a little bit of debt (with regards to credit cards) for the sake of good credit?
– Eli Skipp

It sounds like you have a ton of questions and don’t know where to start, but at the same time, it sounds like you also have a level head about money.

If I were you, I’d put aside an hour of your time a day for a few weeks and read two books – one well-rounded personal finance book and one book on investing.

My suggestions? For the first one, there are a lot of good general personal finance books out there. Just pick the one tailored to where you’re at in life. If you’re in college, Please Send Money by Dara Duguay is pretty strong. Just go to the personal finance section of a bookstore and browse a little – and find one that fits.

For investing, though, I have one straight-up suggestion – read The Bogleheads’ Guide to Investing by Larimore, Lindauer, and LeBoeuf. It’s the best all-around guide on investing that I’ve ever read, and is a great complement to any more general personal finance book.

Do you think that committing to a blogging schedule out of passion, despite the fact that it promises no immediate revenue streams, to be a productive step? Can I have the expectation that I as continue, I may encounter more opportunities for income than I can see at this moment? How have you experienced the growth of income-creating opportunities on your own blog? How have you best determined how to streamline your interest with insights that your readers will ultimately pay to enjoy?
– Holly

If it’s borne out of passion, committing to a schedule is a productive step, but not for the reasons you’re looking at here.

If you’re passionate about something, blogging gives you a powerful method to talk about it. You’re able to share what you discover. You’re able to explore your ideas. You’re able to grow in that passion.

Setting a schedule, in a way, makes you accountable to that conversation. People will be more likely to read if you consistently and regularly engage in conversation with them. Think about your friends – the ones you call every day or every week are much more likely to engage you than the ones you call every once in a while when you feel like it.

However, you immediately jump to the “income-generating” conclusion. If you’re committing to a schedule under the belief that such a schedule will lead you directly to money, you’re most likely going to be severely disappointed.

If money is the goal of your blogging pursuits, you will fail. I’m not saying that it’s stupid to try to earn money from blogging – it’s not. But if you’re in a situation where you would stop blogging if the money dried up, the blogging isn’t really your passion – and it’ll come through in what you’re doing.

I have about $10K sitting in bank and I feel I should do something about it. Since I do not have Roth IRA account, I plan on spending $5K (max) to invest on Roth IRA. But I am struggling to find ways to invest remaining $5K. I really do not want to invest in stocks, 401K or mutual funds – I have lost quite a bit of money on all these last few yrs nor I have time to do research. Ideally I would like to invest where there is atleast 5-6% return. Pls advice.
– PR

So, you want a 5-6% return right now without risk? You and the rest of the world, buddy.

Here’s the problem. To get a significantly larger return than you would get in a savings account or a treasury note (the most risk-free options, which both currently return at most about 3%), you have to take on risk.

No investment is a guarantee, not even the treasury notes (but they’re as close to a guarantee as you’ll find). When you start seeking higher and higher returns, the risk gets higher and higher.

Stocks and real estate are two areas where you can almost always get a 5-6% return over the long haul. Over the short haul, though, it’s basically a gamble.

If you could accomplish one goal with The Simple Dollar in the next year, what would it be?
– Edgar

I have five one-year goals that I set for myself on June 1 of this year, which means I want to accomplish them by June 1 of next year.

100,000 email/feed subscribers I’m currently just a hair over 60,000. The way to do this is to just keep writing good stuff and make sure at least some of it is welcoming to new readers. If you want to help with this, the best way is to simply send interesting articles you see to your friends.

25,000 Twitter followers I currently have around 4,400 followers, but I’ve just now started paying strong attention to Twitter. I think I just finally realized how useful it can be for generating conversation. How can I get to that huge goal? Again, I just need to keep putting useful stuff on Twitter.

Second book finished I have a pretty strong outline and drafts of a few chapters. I’m hoping to have a complete strong first draft done in September or so, then let it “rest” for a month, then revise it.

6 more “downloadables” I have a big stack of requested downloadables that people want me to make – it’s just a matter of putting aside the time to get them done.

One final thing… There’s a final goal I have that I’m not going to share quite yet, but I think it’s pretty cool. I think it’ll serve as a resource for a lot of people out there.

Some of us have put in a lot of time constructively correcting Trent’s posts in the past. Here he is pretending he does not actually make mistakes; rather, he deliberately portrays one side of a controversy to generate discussion. That’s why errors was in quote – he doesn’t actually think we’re pointing out real errors, or at least that there’s no such thing as an erroneous opinion. We’re a little frustrated.
– Michael

I write a lot of articles where I address only one or two facets of a many-faceted situation – usually, the ones that interest me or that I know would be really relevant to a reader that has contacted me recently. Most of what you actually see on The Simple Dollar is actually reader-driven – I try hard to match post ideas to what people tell me that they are going through or they want to hear about.

I assume that in the comments people will delve into those other uncovered angles because those other angles are the ones that interest them. What I find amusing is that many such comments accuse me of “errors.” They’re usually not errors – they’re just not issues I find interesting to talk about or I choose not to talk about to keep the article reasonably simple – after all, this is The Simple Dollar. If you want The Overly Complicated Dollar, go elsewhere.

Yes, I make real errors. I make a lot of them. But choosing to cut out a point because I think it would cause an article to drag out too long isn’t an error – it’s an editorial decision to make the site more readable and useful to more people. Again, simple.

If I actually wrote about every angle of a complicated issue, I would be writing a book, most of which would not be interesting to you, and something that only a handful of people would bother to read and comment on anyway. That’s not the point of a blog, where the purpose is to generate discussion. I’d far rather get people to think about an issue in a new way or pick up a new useful tip.

Many of my posts are already long enough.

So, if you think I’ve made a big error by omitting something, by all means, call me on it. I welcome it, as long as it doesn’t devolve into personal attacks on me or on another commenter. We all come here to learn, not to hate.

While QuickBooks simple start is def cheaper than the full out Pro version, normally, often times you can get the Pro version for $100 if not less (watch for coupons at various sites) and lately Staples has been throwing in a nice bundle of extra free software which you might or might not use (can always flip it on craigslist or ebay) so don’t rule out the higher end versions just because they seem cheaper at one time.
– Chris

The big reason why I tend to point people towards QuickBooks Simple Start Free Edition is because it allows people to essentially try out QuickBooks for free and see if it matches their needs. If it doesn’t – no investment lost other than the time. If it does, then the upgrade path to a full version of QuickBooks is perfect.

I actually think all software companies should use this type of technique to sell their software – and more and more are moving to it all the time. For example, the free Quicken Online seems to do just that – it’s a mostly full-featured version of Quicken, but the desktop versions seem to have a fair bit more gas in the tank.

If there’s a free option for the software you want to use, try it out.

How does one justify the cost of a house, insurance, property taxes, and maintenance these days? I understand that equity is built but it seems (without running though the numbers) that you’re really paying for a house 3 times over once all the interest is factored in. Add all the previously mentioned expenses and it seems like renting comes out ahead.
– Reflection

For many people, renting does come out ahead. Buying a house only comes out ahead if (a) you have a need for a lot of living space (i.e., you have multiple children) since large houses have huge rental expenses and (b) you plan on staying put for a long time -or- you have the cost of the house ready to go in cash.

If you’re single and just want a small house, you might be able to find something that’s cost effective by hitting foreclosure sales – that’s how my sister-in-law did it. However, my experience has been that family homes in good condition are few and far between at local auctions and the ones that do appear are bid up like crazy.

So, if you’re single or married without children and plan to at least keep your location options open, I think renting is likely the best option. Neither renting nor owning is the best choice for everyone.

I have a question: Is it really cheaper to sew your own clothes, or your children’s clothes, rather than buying them?
– Lisa

It depends on your skills with a sewing machine and the cost and quality of the materials you can get.

A person who has never used a sewing machine or never assembled clothes before will likely wreck quite a few items before making something worthwhile. In other words, there’s a pretty nice sunk cost of time and materials before you get up to speed.

Now, if you’re a skilled sewer and have access to lots of good material, you certainly can make very nice clothes for little cost, and often do it in the evenings while watching a movie or something. It’s just not as simple as sitting down and starting, though – it takes some skill, and that takes time to build.

My wife has the skill to do this. She’s made stuffed animals and doll’s clothes for our children and has made a few shirts. Her problem is that she gets burnt out – she’ll get really into sewing for a few weeks and make several things, then she gets tired of it.

On another blog (which I will not name since they do not deserve to get traffic for this type of content), a writer talked about obese people in the workforce, and how they would not work with them/hire them. They went on to make some claim that overweight people were less effective than normal-weight people. From a legal standpoint, isn’t it illegal to say something like that? Can an employer not hire you even though you are qualified for the job simply for weighing more than they judge normal? Also, what is your opinion on that?
– Marie

Obesity (unless it’s caused by a demonstrable condition) is not covered by the Americans with Disabilities Act. Given that one’s physical fitness can certainly be a criteria for many jobs, I understand how obesity can be used as a hiring factor. If you’re hiring a crew to build a house, for example, a physically fit person will have more utility than an obese person.

Having said that, I think “overweight people were less effective than normal-weight people” is a pretty ignorant blanket statement. Many people that are extremely skilled at white collar work are overweight, largely because of the sedentary nature of the work. Is this person actually going to claim that Lee Raymond, long-time CEO of Exxon who built the company into the behemoth it is, was less effective than other options?

You hire the best person for the job. A person’s weight might have something to do with their effectiveness at manual labor, but it often has very little to do with your effectiveness at white collar work.

Is that really your voice on the podcast or video? Are you using some kind of voice modifier?
– Duane

Nope, that’s my real voice. It’s low, I know, but I think it’s fairly expected. I’m six and a half feet tall, wear size 17 shoes, and a size 15 ring. My voice box is similarly sized, I think.

What I’d really like to work on isn’t the sound of my voice, per se, but my ability to speak in a way that holds attention. I’m currently working on that.

Got a question of your own? Ask it in the comments, and I may address it in a future mailbag!

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  1. To “PR”: It appears that you might be confusing types of investment accounts with types of investments. IRAs (Roth or Traditional) and 401k’s are not investments. They’re investment accounts.

    Within an IRA or a 401k, you’ll have many different things you can invest in. Some of them with low risk. Some of them with high risk.

  2. Michael says:

    Thanks for answering. Learn/hate is a false dichotomy and I don’t do either one very much here. Yes, yes, you deliberately left out the other options. ;)

  3. The greatest gain I’ve received from blogging has not been directly with revenue from the blog. It has improved my communication skills at work, it keeps me up to speed on my industry, and has translated to a new level of confidence.

    Don’t start blogging expecting to make money, do it as a hobby where you expect to improve yourself. This CAN translate into making money, but not always money from the blog. I probably still have my job right now because of my improved communication skills which is a direct result of writing 500 words or more daily for the last 15 months.

  4. Brett McKay says:

    Good luck with your blog goals, Trent. I’ll be rooting for you.

  5. Johanna says:

    “Stocks and real estate are two areas where you can almost always get a 5-6% return over the long haul.”

    Really? As I understand it, real estate has outpaced inflation by maybe 1% over the really long haul. And, again as I understand it, real estate prices can’t sustainably rise much faster than that, because before too long, nobody would be able to afford to buy a house.

    Now, you could get lucky and buy in a region of low demand that subsequently becomes a region of high demand. Or you could get lucky and buy just before a bubble and sell at the peak. But “almost always”? I’m skeptical.

  6. kristine says:

    I am an expert sewer, but am completely de-motivated to sew clothing as clothing has become so inexpensive in stores, that buying fabric is now more expensive than buying the kind of clothes you might make. (Why? Chinese prison labor is cheap.)

    The exception- fancy dress clothes- but even then, you have Marshalls. Or maybe you just want something unique. It still makes financial sense to sew draperies, table linens, and decorative pillows. The mark-up on these in stores is outrageous.

  7. Hope D says:

    to Lisa:
    I like to reconstruct clothing. You take already existing clothing and change it up to make it new to you. It is also called upcycle. You can change jeans with embroidery or cool embellishments into long skirts. Mens dress shirts can be come little girls dresses. Look on Etsy for inspiration. There is also a magazine called Altered that has how to’s. You can do this with second hand clothes. You have to change the way you look at clothing.

    It is cheaper and easier than creating a whole new garment.

  8. tentaculistic says:

    Size 17 shoes?? Wow! I didn’t know shoes went that big. Especially boggling when I think that would be a size 19 in women’s sizing. Sorry, hope that wasn’t rude. I’m just a bit boonswoggled. :)

  9. Debbie M says:

    @Reflection – I find that buying comes out about the same as renting for me except in years when I refinance (including the year I bought the house; those extra fees make it more expensive). However, once the house is paid off, it will become much cheaper for me than renting.

    @Lisa – Buying clothes at thrift stores and garage sales is much cheaper than sewing. However, sewing skills can help you repair clothing you like, update clothing, or otherwise refashion it into something better as Hope D described. It can also help you make off-the-rack items fit you better.

  10. Todd @ The Personal Finance Playbook says:

    @ Johanna – I think the 1% number is about right with regard to the Case-Schiller price index. That number ignores any income the property might produce. If you have a property for investment purposes and it generates positive cash flow, you could easily approach 5-6% return.

  11. Brad says:

    RE: Obeisity
    I have not hired people before because they were very large. Sure, that is a form of discrimination but that’s the world we live in.

  12. Hi Holly,

    I guess I didn’t feel that Trent answered your question fully, so here is my take on your question:

    “Do you think that committing to a blogging schedule out of passion, despite the fact that it promises no immediate revenue streams, to be a productive step? Can I have the expectation that I as continue, I may encounter more opportunities for income than I can see at this moment?”

    You may or you may not. You would be better off following a proven mentor to start making money from your blog; someone who has already done it and is teaching others to do the same.

    I’d highly suggest you check out Yaro Starak’s program: Blog Mastermind.

    I was blogging for about a year and only earning $30/month, mostly from Adsense. Then after only following Yaro’s program for about 7 months I had my first $1,000 month. And trust me, I don’t have that much traffic so I must be doing something right :)

    You can learn more about Yaro and Blog Mastermind at his blog: http://www.entrepreneurs-journey.com and you can also check out my review of his program if you want to learn more.

    I hope that helps Holly.

  13. Marsha says:

    Although Lee Raymond definitely has a double-chin, I don’t think he’s actually particularly overweight.

    As for sewing: if you only want something inexpensive anyway, then you can buy the clothes for about the same $$ as making them. For higher quality clothing, you can make them cheaper than you can buy them. Either way, you have to account for what your time is worth to you.

  14. Johanna says:

    @Todd: I’m not an expert in real estate ivesting by any means, but it seems to me that your ability to generate positive cash flow will depend strongly on what you paid for the property, i.e., you have to buy at a point in the cycle when prices are low relative to rents, which again is not “almost always.” Also, if you’re buying a property and renting it out, whatever return you get is not totally passive, because being a landlord involves work: maintaining the property, attracting tenants, tracking down deadbeats, etc. I’m not saying it can’t be done, obviously, because a lot of people do it – just that there’s a lot more to the statement “real estate investments almost always generate a 5-6% return” than meets the eye.

  15. Lindsay says:

    Being fat is voluntary. People make a choice to eat unhealthy and not excercise. Therefore, it should never be covered by the Americans with Disabilities Act.

  16. leslie says:

    I don’t think that sewing your own clothes is any cheaper than purchasing because fabric isn’t cheap and there is some serious time put into it. (I realize shopping isn’t quick either).

    I agree with the poster above that it is much much much easier to reconstruct clothing. I suggest buying a few Large shirts at a thrift store, then going home and resize them to fit you (i’m assuming, here). Or cut up a t-shirt to turn it into a tank top.

    This way, you’re really only using thread and some time to alter the material. Maybe some embellishments if you wish. But this way is definitely cheaper. Plus, I am so picky with clothes that most of the time I purchase items already thinking about how I will change them to my liking.

  17. Lisa says:

    @tentaculistic – That would be around a size 15 in women’s sizing. Women’s sizes run a couple of numbers lower. I wear a size 7.5 women’s, which translates to a size 5.5-6 in a man’s/boy’s sneaker.

  18. Carolyn Brown says:

    Just wanted to let you know I enjoy reading The Simple Dollar. I’m new to computer “stuff”, new to twitter, which is where I found you. I wanted you to know I also signed up to receive emails from The Simple Dollar. I do not like the way it looks/reads as an email. I prefer I guess getting to your blog (?) by way of twitter. It is pleasing to the eye and makes reading easier and pleasing. I guess it is, because it is set up in sections, with highlighting. Enjoy this site and look forward to reading it everyday. Thanks and your efforts for quality information is appreciated……Your Fan…Carolyn

  19. mes says:

    I have a sewing machine but am in no way highly skilled with it. I can make simple things (shorts, potholders) and do repairs and small alterations. While it really isn’t worth it financially to make my own clothes, the repairs and alterations definitely are. If I have pants that are too short, I can make shorts or capris out of them. If one of my guys wears a hole in his jeans I can patch it. You don’t have to have a huge amount of skill or a fancy machine to make sewing worthwhile.

  20. Hi Trent!

    I’ve been following your blog, for more than a year now and i found it pretty intersting even thought your contents are obviusly U.S. focused.
    I live in Chile and i’m planning on getting a macbook laptop in my next trip to the states.
    i was wandering, considering the vast world of choices available in the computer world, if it was really worth it.
    Greetings from Chile,

  21. dangermom says:

    I do know people who claim to save money by sewing, but they are few and far between. On the whole, sewing clothing has become a hobby, not a money-saver. You do it because you want something unique that you created yourself and it’s a form of artistic expression for you. For me, it certainly is not a money-saver; I like high-quality fabrics and interesting designs and heirloom sewing, and I have to pay for them. (Though I can also make really nice doll clothes for a fraction of what American Girl charges for their outfits.)

    To save money by sewing, you would want to be very good at it, pay close attention to sales and stock up on fabric (just as with grocery shopping), or do alterations as described above.

    It’s also a bit relative; yes, you can make a hand-smocked dress for less than you would pay in a boutique. I made a fancy velveteen dress for my daughter last winter that would cost $150 or more retail, and I didn’t pay anywhere near that–but I could have bought an inexpensive winter dress at Target for much less than what I paid for the fabric.

    It’s true that you can save by sewing your own home-dec items, though.

  22. maybelle says:


    tentaculistic is right! you just proved it with your example. women’s sizes run smaller, which makes the size higher.

  23. Tordr says:

    You wrote an article some days ago: “Using Consumer Reports to Assemble Your Grocery List” which talks about Consumer Reports, but you have previously deleted your earlier content pointing to them. Your reason for doing so was “Consumer Reports has asked me to eliminate the content of my summaries and any other references to the content of Consumer Reports. I have complied.”

    Now if they (Consumer Reports) do not want to be mentioned then why have you mentioned them again?

  24. Sunshine says:

    @ Lisa I was just gonna correct you, but Maybelle beat me to it. You’ll prob. read your comment and go, “D’oh!”

    WRT to the reconstructed clothing, check out craftster.org. Their clothing forum is pretty busy and full of ideas.

  25. a conscience life says:

    Concerning houses and the buying or renting of them:

    It is really a bad idea to think that you are going to buy a house as both an investment and as a place to be a ‘home.’ If you want a place that you can knock down walls left and right and paint pink, then buy a home. If you want an investment, then you will need to modify the house to reflect the market demand, not necessarily your personal interests. The point is if you are buying a house in order to have a ‘home’, then do so. Don’t worry about the investment aspect of it. Just enjoy your home. Likewise, if you are trying to make money on it, then you shouldn’t modify it in any way that will decrease its value. Trying to have it both ways (a home investment), only leads to frustration on either the living-in-it or selling-it end of things.

  26. KC says:

    Eli should continue to live beneath his means saving money where possible, stay as free of debt as possible, and continue to educate himself on personal finance. At 20 it is hard to start saving because your paycheck – if you have one – consumes everything. But don’t acquire any debt that isn’t absolutely necessary (mortgage, school loan). I would not use debt to buy a car – that is a huge mistake many young people make – buy a cheap, used car and save up to do it. You can use credit cards for the sake of building credit, but I would highly advise not charging anything more than gas and groceries and paying it off monthly.

    As for homeownership vs. renting it depends. Trent brought up a few good points about family size, etc. But it also depends on where you live. When I lived in the city (1 million+) I could find some nice places to rent at a good price and no maintenance. Now I live in a small city (200,000) and I couldn’t rent anything here – most of it is trash. I also wouldn’t want renters as neighbors either. From my experience they are loud and don’t really have much regard for their property. Renting is best used in larger cities, but yes it certainly can be more cost efficient.

  27. Meg says:

    I sew. In my experience, the following is worth making.

    1. Unusual clothing
    If, for instance, your dress meets certain religious modesty standards, it often makes sense to sew, because styles in stores are often limited and pricey. Long skirts and dresses, for instance, are very difficult to find in stores.

    2. Home decorations
    Stuff like fancy pillows gets a heavy markup

    3. Repairs
    Knowing how to do basic clothing repairs is an easy way to save on tailor bills. If you sew by hand, your set-up costs are a couple of dollars for a needle and thread.

    Sewing, though, is also a hobby that produces something of use. Compared to some hobbies then, it is relatively cheap for what you get out of it.

  28. Lisa says:

    @maybelle and @Sunshine – You’re right. I see it now. (And I did go “D’oh!” when I read my comment!)

    Thanks, Lisa

  29. bethh says:

    I’m a little puzzled about the Twitter goal. I can understand that increased blog subscriptions probably means increased traffic/profit (and I’m not knocking that). I don’t understand what benefit you derive from 25,000 Twitter followers, unless it’s mainly that it increases recognition of your work.

    I’m still a Twitter hater :) so don’t look for me there!

  30. Heather says:

    Re: Obesity issue
    We own a property management company and have not hired obese people. If you can’t fit under the sink, how can you fix it? On the other hand, our attorney is a rather large man. He’s a wonderful attorney and this does not affect the ability to do his job.

  31. Marc says:

    Great mailbag.

    @PR – I think you need to read up on investing more. Of course everybody would like 5% risk-free but interest (return) is reward for risk. Losing sight of that leaves you open to dangerous investments and even scams.

    Re: “errors” – The issue of length is adressed well. One of the best aspects of this blog is the informative yet concise articles. The effect of an article is lost if its insight/thesis is lost amongst information most of us know already or is easily found in links.

  32. Ken says:

    Advice on the podcast:

    Do short takes of each segment and stitch them together. Do multiple takes, and then put the ones you like best into the podcast. It sounded to me like you did one long take, and were reading from a prepared script. Your delivery was somewhat “stilted,” but with practice you can make yourself sound much more relaxed and natural, even with a script in hand. Consider pulling in another person to do “back and forth” with; it makes the podcast more interesting to listeners, as one voice throughout can get monotonous, no matter how interesting the content. Otherwise, I enjoyed it – keep up the good work!

  33. Darin says:


    One comment about your first two goals for the next year (100,000 email/feed subscribers, 25,000 Twitter followers)– I’m assuming that your intention is to continue to create great content and to work on “marketing” and getting the word out, rather than just altering content to try to get more hits from Google or drive more traffic. If you have not already clearly defined what the constraints of these two goal are (doesn’t have to be stated publicly), I would encourage you to do that.

    I’m reminded by what I read recently about GM, where the company had set a goal of increasing market share by 20% (or increasing TO 20%.. don’t remember). Employees and managers wore pins and had banners that repeated this mantra. The goal didn’t specify how they got there, however. Instead of slowly building market share, they engaged in practices of deep discounts, 0% financing, and pushed for loan approvals to people who weren’t qualified. All so that they could quickly make their numbers. They didn’t end up making a better product, just coerced a few more people to make the purchase. Which has led to some of the problems they are having now.

    Something to think about…

  34. kristine says:

    I was disheartened by the blanket statement about renters being loud and not taking care of their property. Generalizations are by their nature unfair, and wildy presumptuous.

    We rent in a wealthy suburb- two quiet school teachers, with 2 teenaged children who are A+ students, (headed for MIT) and respectful of our home, and neighbors. We do not buy as there is no way we could ever afford a home in a good school district near the college where my husband teachers. We have always rented for this reason- professorships in his specialty are rare. The first house we buy will be a tiny one, upstate, when he retires, and we will buy it outright.

    We are in a million-plus housing market, and pay only 2000 a month for an “ivy league feeder” school district. So you tell me- who is the smart one? Our house is tiny, but the benefits huge.

    We have improved the structure and appearance of both homes we have lived in- I garden landscape for recreation, and paint the interior from stem to stern every few years. Our home and habits fit the area. (Except our car- an old but clean Ford Focus in a sea of Benz-so sue me-I’m frugal.)

    Don’t be so quick to judge. Sadly, we are looked down upon for renting, and our car… snubbed, really. I am never taken up on my offers to volunteer for events in the Civic Association. They actually tried to legally exclude renters from being able to vote in town election. Thankfully, they were unsucessful.

    We are the only renters on our street. I think lot of the bitter attitude, these days, may be resentment that our venue for living here is SO much cheaper than theirs. A lot of owners’ homes are in distress sales.

    What can I say? We did the research, and the math.

    PS- Many of our professor friends are in exactly the same boat- preferring district to ownership. We are not as uncommon as you think. Please keep an open mind.

  35. bethany says:

    I totally agree with your response to Holly about blogging. The popularity of blogs does correlate to the quality and regularity of them, but there’s just no predicting what’s going to gather an audience and make money reliably. There are more reliable ways to make extra money, but blogging is a great way to practice writing and hone your ideas.

  36. Johanna says:

    @kristine: I read KC’s comment about renters being poor neighbors to apply specifically to the small city where he/she lives now. Clearly, where you live (and where I live), it’s different.

    Similarly, Trent’s original post suggests that where he live, it’s hard to find good rental housing for families. That’s another thing that varies from place to place.

  37. Sandy says:

    I have some money in 401(k)’s I left at my previous employers. I have an IRA set-up where I can roll over these funds, but should I wait until some of the money comes back to make this move or doesn’t it matter?

  38. Elizabeth says:

    @ Lisa — I think sewing is a worthwhile skill to learn. I learned at a young age, and even though I don’t sew my own clothes (too expensive) there’s something to be said for understanding quality fabrics and how garments are constructed. You can tell if something can be easily (and inexpensively altered) and even save money buying “damaged goods” that you can fix.

    Sewing is a hobby for me. (I quilt, but I don’t make clothes). Like the other commenters, my biggest pay-offs have been repairing my own clothes and making my own home decor, but I’ve also been able to barter my sewing skills. (Not everyone knows how to hem a new pair of pants!)

  39. stefanie says:

    @Marie, Trent, and Brad,

    One cannot judge one’s physical fitness by a person’s size. One can be healthy and fat and one can be thin and unhealthy. To discriminate against someone because of their size (including weight and height) is to participate in one more form of oppression that is thrust upon people unfairly and to their detriment.

    You might want to check out some fat-positive books and blogs (there are lots out there! you might want to start by googling Marilyn Wann, Shapely Prose, The Rotund, Big Fat Blog, Linda Bacon, and NAAFA – the National Association to Advance Fat Acceptance), as well as some Health at Every Size information before you make your judgments. Please consider granting everyone the right to be equal, even if our collective dominant society thinks otherwise.


  40. Carlo says:

    Hi. I have a question. I am planning on starting a loan for my last year of college. I have been paying college with my own money through my Amex Blue Cash (to get cash back) but I pay it off monthly. My limit is just enough to pay for monthly tuition plus $100 for myself, but sometimes, this isn’t enough. I tried raising my limit but Amex denied me. Does it make sense to apply for a new CC before applying for a student loan? Will it hurt my credit score (because of the hard pull) or will it help it (because my overall limit will increase)? What is the smarter thing to do?

  41. Deborah says:

    Where would you recommend for buying larger sized shoes? My husband wears a 15 EE, and he could probably go a size up… It’s the largest we can find in a store. He needs waterproof boots that breath. I got him a pair at Sportsman’s Warehouse, and his feet are white and peeling from sweat after a day on the lake (he’s on the rescue squad and sometimes he’s out there for 12+ hours multiple days).

  42. Meghan says:

    There is a difference between overweight and obese. Statistically obese people have higher health care costs and are at a much higher risk of certain chronic illnesses (diabetes, hypertension, etc.). This leads to more missed days of work. Certainly there are people who fall outside of the statistics, but potential employers cannot know anything about the individual. I do not think this is unfair. Employers have the right to hire the best person for the position…that may not be someone who will statistically cost more, in missed work and health costs.

  43. sophie says:

    Re: “errors” It is frustrating when Trent makes a mistake in a post and does not care enough to correct it. I can give a recent example, since I am one of the people who pointed it out. Trent told a reader last week that a Roth IRA “has one disadvantage – if you don’t use it for the education, you can’t touch it until you’re at retirement age (without paying an extra 10% tax penalty beyond what you’d normally have to pay).”

    But contributions to a Roth IRA CAN be withdrawn tax-free and penalty-free at any time. Anyone who reads that post will (A) be misinformed, or (B) realize that Trent is wrong and wonder how reliable his advice on other topics is.

    Neither of those seems desirable to a blogger as ambitious as Trent…but the mistake stands.

    Ditto with his advice in the same post to “make sure you recycle them” if you use paper plates. That’s just silly. And I could provide other examples.

    Errors like those have nothing to do with “keeping it simple” or “keeping it short” – plain and simple, they are about Trent making a mistake and doing nothing about it. To me being comfortable with misinforming readers speaks volumes about his integrity as a financial writer. I’ve stopped recommending The Simple Dollar and I read it less and less. Frankly I’m thinking about unbookmarking it, and coming back only for the book reviews. :(

  44. deRuite says:

    Dear Eli, A credit card is handy IF YOU HAVE SELF DISCIPLINE. Get one of the airline credit cards (free for first year) which give you 20,000 or 25,000 free miles which is enough for a free flight. ONLY BUY WITH THE CARD WHAT YOU WOULD PAY FOR IN CASH AND EVERY SUNDAY NIGHT SIT AT THE COMPUTER AND PAY OFF THE CARD IN FULL ONLINE. You will have excellent credit quickly, no debt, pay no interest (wasted money) and get a free flight. At the end of the year contact the company, tell them how much you like your card, but you don’t want to make the payment for having the card for the next year. Some companies, because you are a good customer, will give you the card for a year free. If not, cancel the card and get a free card (you’ve got excellent credit!) with another airline for a year and get another free flight. ALWAYS DO THIS ONE MONTH BEFORE THE YEARLY CHARGE WILL KICK IN FOR THE CARD, and apply for the new card BEFORE you cancel the old card. Get a free flight every year (domestic), get great credit too! I have my household bills paid by credit card this way (no extra charge and you save a 44 cent stamp on each every month plus bills are always paid on time) and as a result I get a free international flight each year. DON’T GET A CREDIT CARD IF YOU DO NOT PAY OFF YOUR CREDIT CARD BILL IN FULL EACH MONTH. Also you must see if you can get a better deal in cash, for instance paying cash for gas now saves 5-10 cents per gallon, so it is better money management to pay cash for gas.

  45. Sara says:

    I think it’s sad that employers will make a hiring decision based on appearance. I am willing to bet that these prejudices often result in missing out on the person who is truly best for the job.

  46. Tyler says:

    “I think it’s sad that employers will make a hiring decision based on appearance. I am willing to bet that these prejudices often result in missing out on the person who is truly best for the job.”

    Are job-seekers not told over and over that appearance is crucial in a job interview? I know I always wear a suit and a tie to a job interview, and I am under the belief that I will have a better shot at the job than someone who goes in to the interview wearing shorts and a t-shirt, even though they are the most qualified candidate.

  47. Beth says:

    Maybe renting is sometimes a little less per month than owning a comparable house or condo (although very often is it NOT, including interest, insurance and taxes)–However BUYING always comes out ahead when you consider the total game. When I sell my house, I get my cash back. All the mortgage and interest I was paying, BACK. And usually including a nice profit due to appreciation. When you move out of your apartment, you get buttkiss.

  48. Beth says:

    I figured that buying sale sweaters is MUCH less expensive that buying the yarm and learning to knit them myself.

  49. SteveJ says:

    @Johanna, Todd

    What’s the really long haul for real estate? One of my big dreams is to buy real estate for my descendants. Obviously living mortgage free will be nice for them, but I honestly thought over a few hundred years it would be a pretty awesome investment. Buy low, never sell, that used to be the formula for growing “Old Money” at least. Just looking at my lifetime where nice 40K houses became nice 100+K houses….am I delusional? Where can I find more info?

  50. michael bash says:

    I hope you took the time to read my comments on your reading voice and delivery. If you plan to continue with live recorded voice, it outlines the challenges you face at present.

  51. M says:

    I started my new job and so far am excited I took the advice of your post to do what you want. My last job was making me physically sick and after 7 short years I was on 4 different kinds of medication, major weight gain and a downward spiral health wise all directly related to the huge amount of stress with my last job. I am a little afraid to actually see my next paycheck, but I after a great deal of calculation before accepting the position and a long talk with my other half I think it will be worth it. The final straw was seeing a picture of me before I took the job from H*ll and one taken a couple of months ago, what a shocker.

  52. Johanna says:

    @SteveJ: How much have other prices gone up in your lifetime? Depending on how old you are, it may be that things that were selling for $40 when you were young are going for $100+ now. And depending on where you live, houses may still be overpriced right now, so those $100+K pricetags may not be indicative of actual fundamental valuations.

    Another thing to consider is what happens if your descendents don’t want to live in the houses you’ve bought for them. Maybe they’ll want to move to other cities because of their jobs, educations, spouses, or living preferences. Maybe they’ll want to have larger or smaller families than can be comfortably accommodated in the houses you’ve bought. Maybe the neighborhoods that are nice now will have gone downhill over 20 or 50 or 100 years. I’m not saying your plan can’t work – just that there are some reasons that it might not.

  53. Katie says:

    Ladies and gentleman, you do not have to have a condition under the ADA in order to be discriminated against. As an employer, it’s ILLEGAL for you to discriminate. Being a woman is not covered under the ADA, but you could get sued for millions if you do not hire women – and quite frankly, you deserve to be sued (and fired) if you discriminate. It’s disgusting, repugnant, and quite last century. Brad, I almost hope you get sued to bring this point home.

  54. Johanna says:

    @Katie: That’s not correct. It’s true that being a woman is not covered under the ADA (and rightly so – being a woman is not a disability!), but sex discrimination in employment is covered under Title VII of the Civil Rights Act. There is no law that makes it “illegal for employers to discriminate,” full stop. Such a law would be nonsensical – obviously, employers have to discriminate based on something, or else they’d have to hire either everyone or no one. Usually, the discriminate based on ability to do the job. Sometimes, when ability to do the job is hard to discern, they discriminate based on other things. Unless they’re discriminating based on qualities that are explicitly protected from discrimination by specific laws, they can do what they like.

    It’s worth noting that neither Title VII nor the ADA applies to private employers with fewer than 15 employees.

  55. Sara says:

    @ Tyler:
    It’s one thing to expect someone to dress appropriately for an interview, and another to assume that a person will be ineffective at the job based solely on his or her physical characteristics such as weight. You can choose to wear a suit and tie to an interview instead of shorts and a t-shirt, but a fat person can’t simply decide to wear a thin body to the interview.

  56. Curtis says:

    To PR:
    I would put $5K in a Roth IRA this year and then put the other $5K in the same Roth IRA next year. While you are waiting for tax year 2010 to begin you can keep that $5K in a risk-free 1 year CD paying ~3%. Not great but better than a stick in the eye. And down the line you will be glad that you put $10K in your Roth (over two years) rather than trying to invest everything in one year and neglecting your retirement savings.

  57. Lenore says:

    I’m sure the person who didn’t hire someone because of weight would make the same decision based on race, disability, sexual identity, height, gender or WHATEVER if there aren’t any penalties for discrimination. While it may be true that heavier employees are at greater risk for certain medical conditions, so are African Americans (hypertension, sickle cell anemia) and male homosexuals (AIDS, hepatitis). Would that prevent you from hiring a qualified Black or Gay candidate? I hope not!

    While an employer can expect a job applicant to arrive well-groomed and dressed appropriately for the position, judgment should not extend to physical characteristics irrelevant to performing the job. Do we really want to foster a society so shallow that job seekers need botox, teeth whitening and liposuction more than education, social skills or relevant experience? I have never hired someone because of how they look, but I would be ashamed to admit it if I did.

  58. mellen says:

    Beth: the phrase is, “you get bupkis” (from a Yiddish word meaning ‘beans’, or so it says on wiktionary) not buttkiss.

    But to your meaning, I wonder if it is true that you always get your investment back? If I were to sell my house right now, I would probably not make any money and could wind up owing the bank. Plus, the point of kristine’s post was that she traded the return on investment that she would have gotten from investing in a home for the “profit” of sending her kids to a better school and living in a good neighborhood. Although I bet she’d trade her neighbors in a heartbeat, sending her kids to a good school and having a short commute for her husband were more important than the ROI of owning a home.

    kristine: I don’t think it’s a comfort but my grandma always told me, “money can’t buy class” and I’ve found very often in my life that she was right. I’m thankful she left me with class and no money rather than the other way around and I’d be more than happy to have you as a neighbor – mine are noisy and rude regardless of whether they are owners or renters…

  59. Elderly librarian says:

    I would also like to know where Trent buys his shoes!

  60. Ked says:

    regarding the obesity issue….I work with several overweight coworkers and one truely “obese”coworker. She cannot do her job. Her weight is the problem, she has diabetes and hypertension. She walks from one counter to another and props up. If she needs something from another work station she ask a coworker to hand it to her, if she drops something she ask a coworker to pick it up for her. She unfortunately is a liability,not an asset to our work productivity and reduces overall office moral.
    Frankly, the entire staff is tired of facilitating “her” work. Our supervisor is very kindhearted and having difficulty dealing with this issue. Because the job involves light cleaning and some lifting she should have never been hired for the position in the first place.

  61. Shevaun says:

    Trent, I really enjoy reading your blog and have sent your link to everyone I know (not a blanket email, but particular articles to particular people who would be interested inthe particular topic), so I was hoping you could help me with a pickle. I am currently a PhD English student, so while a lot of my assigned reading is in hard copy books, most of my reading is actually in PDF files culled from library databases. I should state now that I don’t have a lot of money, I am paying my tuition fees and living expenses while *not* working since I’m in school, and the campus has a pay-to-print policy. Because academic reading requires annotating, I print the PDFs, annotate them by hand, and type my notes to prepare for papers. Is there a way to put digital annotations on PDFs? I have already tried in Adobe, but unless the document author authorized the comment feature, I can’t figure out a way to do it. My other option is the Kindle, which supposedly can save annotations and export into a word document, but costs $450… can you help sort this out?

  62. George says:

    C’mon, people, if discrimination based on size and appearance were illegal, then the whole world of entertainment and modeling would be shut down.

    And, as someone rightly noted, small companies are free to discriminate with impunity.

  63. Daniel says:

    I have heard of a book on public speaking written by Dale Carnegie. I believe I heard about it on a Saturday Afternoon television program. I cannot remember the name of it….the program or the book. I remember the book was touted as being the be-all, end-all book on public speaking. I have never yet looked for the book in a library.
    good luck with that,

  64. Johanna says:

    A lot of the comments that people have made here in response to Marie’s question reveal a misunderstanding of how most discrimination works. People like the one Marie describes – who explicitly admit, even to themselves, “I hate people who are obese (or short, ugly, old, female, black, gay, foreign, etc.), so I will never hire one” – are generally the exception, not the rule.

    Most discrimination is a lot more subtle than that, and results from the unconscious assumptions we make in order to “fill in the gaps” about what we know about a person. We might see an obese job candidate and think “lazy, stupid, unpleasant to be around,” and see a thin, attractive, fit-looking job candidate and think “driven, intelligent, someone I’d like to work with.” And we hang on to those assumptions until we have evidence to the contrary. So the obese candidate is “guilty until proven innocent,” whereas the thin candidate is “innocent until proven guilty.” Guess who’s going to have the advantage in the job selection process.

    If you’re thinking, “Well, *I* never, ever make assumptions about people based on superficial characteristics like that,” you’re wrong. Everybody does. It’s human nature, and it does not make you a bad person. If you’re honest with yourself, you can probably think of a time when you found out something about somebody that was contrary to what you expected: that the man who greeted you in the hospital was a nurse, not a doctor; that the popular, chatty blonde woman you knew in college was a physics major at the top of her class; that Susan Boyle is a pretty good singer. The very best thing you can do is to be aware that you’re making assumptions like this, admit to yourself that they’re not always accurate, and try to correct for them.

  65. SteveJ says:


    Great comment. I immediately thought of a male nursery or elementary school teacher. When something is stolen in an office, someone often fingers the cleaning crew, ignoring the actual evidence that you’ve watched a coworker habitually “borrow” from the supply closet. If two kids get into a fight, you just *know* it was the average kid who started it, not the perfect straight-A student.

  66. Rocky says:

    About the sewing costs questions. I disagree with Trent that a skilled seamstress can save money by sewing. My wife is a very accomplished seamstress and I see how much time she puts into something that she makes. Very seldom does she save any money by doing her own sewing. She does her own sewing because she really enjoys it, but it is definatley not about saving money.

    When you can by a t-shirt made by someone in India for 3 bucks she simply cannot compete with that much of a discounted labour costs. She can’t even by the fabric most often for that price.

  67. Terri says:

    Lenore, I’m glad you made the point about how other groups of people are predisposed to medical conditions that could interfere in the work place. I was thinking the same thing. I would like to add to your examples that people who are underweight are more likely to suffer from sudden death. It would be an incredible waste of money to invest money in training an employee only to have them die suddenly.

    For those who claim that obesity is not a disability, there are many medical causes of obesity including: thyroid disease, hormonal imbalances, leptin disorders, polycystic ovary syndrome, and various other genetic disorders. Prescription medications (like antidepressants or anticonvulsants) also cause excess weight gain. You can’t assume someone is overweight because they’re lazy, they could have a serious medical condition and giving them a hard time because of their weight makes their life even more difficult than it already is.

    On a personal note, I would like to say that I am very overweight and have been so almost my entire life. I’m working on my PhD in Physics, I take classes, do research, and teach. It’s not unusual for me to work 70 hours a week. I’m not lazy or stupid, I dress professionally and I’m well groomed. My weight does not interfere with my ability to do my job. In fact, while my classmates and coworkers are at the gym or playing sports I am sitting at my desk working.

  68. mitch says:

    @ Shevaun:
    I am also an English Ph.D. student, and I use OmniOutliner to take notes from (not on) .pdf files. OO lets you copy text from a file, and then you can type your notes to the side or underneath, in a different color or font if you want. Once your data is in OO, you can highlight, underline, or otherwise mark it up.** You can also copy and/or link to websites, pictures, documents, etc., and the professional version of OO lets you record your own voice. When you’re ready to write your paper, you can do so from your outlines, and then export to Word, or whatever word-processing program you use. OO is Mac-only and a student license for the professional version is $49.95 from omnigroup.com. There’s also another Mac-based program called Notebook by Circus Ponies, which lets you keep all the data for a given project together in a series of windows that looks like a spiral-bound notebook (I haven’t had the best of luck with this one). I imagine there’s something like OO or CP out there for Windows people, too.

    **NB: to my knowledge, OO can’t select and copy text from scanned files. You can, however, capture part of the file as an image and write your notes to the side or below.

  69. Megan says:

    To Eli Skipp:

    I just turned twenty-five, and I wish I’d had as level head as you seem to at twenty. At twenty I got my first credit card, promptly used it to pay $400 in car repairs, and I am still trying to pay that off (and subsequent follies. Do it once, and it’s much easier to do it again).

    The book that I would recommend, as it’s helped me very much in learning all about personal finance is, “I Will Teach You to Be Rich” by Ramit Sethi (who also has a blog by the same name). He talks about both finances and investing , especially for people in their twenties. His style isn’t for everyone, but he’s definitely worth checking out. Very straight-forward, no-nonsense approach to money and investing.

    Of course, subscribing to a blog like The Simple Dollar (or any of the others out there) is an excellent first step in figuring out your personal finances.

    (I would also recommend the book “Never Eat Alone” which talks about networking and connecting with others, but that’s only because it’s slowly changing the way I look at the world, and I think everyone should read it as soon as possible. :D)

    To Rocky, re: sewing

    I am also an accomplished sewer, and I find that even though I can buy many things for less that I can make them, there is a great satisfaction in making my own clothing, and getting compliments on it. And often, even if a garment is less expensive in the store, I can make it better, which means that it will last longer and is therefore of more value.

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