Updated on 07.29.09

Reader Mailbag #77

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.

The only credit card I’ve ever had is one my father signed me up for when I went away to college. I’m 25 now, and starting to get curious if there are any beneficial credit card programs I’m missing out on because of my very basic card. I rarely use it (I use a my bank debit card for most expenses), but could use it more if there was an incentive.

Any suggestions for rewards programs or should I just keep the card I have around for emergencies and keep using my debit card?
– Joel

What you’re doing right now in terms of credit card usage is very good – rarely using it (which helps your credit rating but doesn’t get you in debt) and instead mostly using your debit card. That’s perfect – keep it up.

Your best bet, if you’d like to get a little more value out of this situation, is to simply get a Mastercard or Visa associated with a chain you regularly use, like BP or Target. Where do you shop for food regularly? Where do you get gasoline?

Quite often, cards at such places reward loyalty. Just use it for your normal purchases and you’ll regularly get rebates or discounts of all kinds associated with that retailer.

Do you have any opinion on the device known as Majicjack? It seems like a reasonable way to save money on my phone bill(I have a land line and a Tracfone) but have read some extremely various opinions and reviews on the device.
– Angelo

From what I’ve seen, MagicJack works well for what it is. It simply uses some of your internet connection (you have to have broadband) to place and receive phone calls. It’s easy to use. The problem is that it’s as reliable as your internet usage is and it also requires your computer to be on to use it.

What I didn’t like is that the MagicJack software delivers advertisements to your computer. It also “analyze[s] the phone numbers you call in order to improve the relevance of the ads.” I’m not a big fan of spyware – it’s a big privacy breach that I’m not interested in.

Having dabbled with many different VoIP solutions, I’m happiest with Skype. I can use it pretty much anywhere – at home on my desktop computer, on my laptop, on other computers, and on my iPod touch – without taking hardware with me (all you need is a webcam). I can call any number in the U.S., Canada, Mexico, and a few other countries for free, and receive any calls for free. I can also do video chat with other Skype users. It’s only $24.99 a year for all this – and just chatting with other Skype users without a phone number is free.

I am a new golfer, and have come to love it for the challenge of perfection, and individual accountability versus team sports. I also enjoy being outside, hanging out with friends, etc.
I usually use coupons, and go during “twilight” hours, and rarely pay more than $20 for 9 holes and a cart. For 2 hours of my time, I find it well worth it. I go maybe once a month, so I’m not one of those that go at least twice a week or anything.
It’s just really fun, and a casual hobby I would rather not give up. So do you still play at all, occasionally, or have you given it up altogether?

– Matt

I play occasionally, but it’s usually when I’m able to meet up with others who enjoy playing on a non-fanatic basis. That usually means lining up schedules.

I actually enjoy playing the most with my wife and my father-in-law, neither one of whom takes it very seriously and makes the entire thing quite fun.

For me, it’s now a rare-occasion social event instead of a giant almost-never-ending time and money suck.

What are your views on leaving an estate for heirs? I know that planning for dependents to be taken care of is a given, as much as is possible. But assuming the heirs are adults who do (or could) earn their own way – what are your ideas? My grandparents were all about leaving a large estate behind for all the kids & grandkids, but I’ve read some authors who say the goal should be to have a 0 balance (after funeral expenses & settling the estate’s accounts), because counting on a large payout can keep people from being fully responsible for their current spending.
– et

If I were planning on leaving an estate, the last thing I would do is tell the people I would give the money to. You’re right – if a person knows they have an inheritance coming, it changes their behavior.

Instead, I’d just say I was planning on giving anything that was left to “various groups” and simply arrange things privately with my lawyer.

I don’t have any problem with leaving money behind for your descendants, but I do think one should keep in mind the psychological impact of such an inheritance, especially if it’s known in advance.

I appreciate your candid honesty of your “Road to Financial Amageddon” series. How did you recover, psychologically, from the knowledge that you were responsible for decisions that would cost you dearly?
– John

Simply put, you can’t change the past. It’s water under the bridge. The only moment you control is the now and so worrying about the past doesn’t help.

I recovered by stepping up to the plate and making changes. I put a lot of effort into undoing my mistakes in the realization that the only way things would get better is by today’s action.

Let go of the past. Don’t be burdened by guilt for the things you’ve done. Instead, be thankful for the fact that you have a chance – right now – to change it.

I am going to buy a used car and my CU offers a really great rate (4.95%) and for up to 72 months. I am trying to balance the loan length with the rate of depreciation, so at any point in time if I need to sell the car and I still owe, that I am not upside down on my investment. What is the best way you think to do this? The reason for this exercise is because I also have some CC debt I am trying to pay off that will have higher interest rate than the car. Should I not need the car I don’t want to have to dip into savings to pay the difference of what I owe vs. what I can sell it for. Your insight (opinion) is appreciated!
– Marcus Murphy

If I were in your situation, I’d buy the cheapest car that will keep me on the road for a while. That way, you’re not going to be upside down for long on the car, you have more money to get rid of that pernicious credit card debt, and you’re closer to debt freedom.

If you’re getting a seventy two month car loan, that means you’re buying something pretty expensive, likely something new. That’s not a good mix with a pile of outstanding credit card debt.

Doing this now means that you can actually afford a good car later (assuming that’s something you value) without the prison of debt holding you in place.

Many of your posts indicate that you cook often and enjoy it. Do you have any knowledge/opinion on health issues concerning the various types of cookware (i.e. Teflon/non-stick vs anodized aluminum vs cast-iron)? I worry about this when I cook for my family and was wondering if you’ve done any research on it.
– Sophie

I used to use Teflon-coated dishes, but I’m starting to move towards cast iron. Cast iron doesn’t stick at all as long as you treat it well when you first start using it – that means coating it in vegetable oil, baking it, then cooking bacon or something similar in it a few times and only washing it with water and a brush.

Teflon is cheaper and doesn’t require the up-front work, but Teflon also peels after some use. That means it gets into your food and it also means that anything you cook in the pan immediately starts sticking once the Teflon peels away.

I think I’ll pass on that. I’m in the process of slowly moving my pots and pans to cast iron.

You always suggest weird board games. Why don’t you just play normal games like Pictionary?
– Shawn

I’ve played a lot of Pictionary in my life – as well as many of the other typical party-style games – and what I’ve found is that I have a lot more fun when I play something like Ticket to Ride or Settlers of Catan or Puerto Rico instead of Pictionary.

First, Pictionary really only seems to flex the right brain – the purely creative side. I enjoy things that make you think strategically and creatively, which is what games like Ticket to Ride do well.

Second, Pictionary – and many other such games – are difficult to play with a small group of two or three people. Many other games suit small groups very well. If there are twelve people looking to play a game, Pictionary works well, but I rarely am in those types of situations.

Finally, games like Ticket to Ride reduce the impact of luck. Sure, there is some luck, but unlike games like Pictionary, luck doesn’t define whether you win or lose. With Pictionary, it’s all about whether or not you’re lucky enough to have a good artist on your team, the die rolls, and the cards you draw. Very little decision-making is involved, and I usually wind up feeling that all I did was shout out guesses and it had little impact on the game as a whole.

Another big reason I mention such games is that they’re unfamiliar. Everyone’s heard of Pictionary, but not many people have tried games like Ticket to Ride or Agricola.

The short story is that my divorced parents are each in financial ruins. When is it the kids’ responsibility to support the parent??
– es

That’s purely a question of family dynamics. I don’t want my children to ever be responsible for me. When my dotage sets in and my health fails, I absolutely do not want to be any sort of burden on my children. The guilt would drive me crazy.

On the other hand, if my parents need help, I want to help them. They don’t expect it, but they’ve done so much for me that I want to help.

Other families have a different dynamic. Perhaps the parent-child relationship has been poisoned along the way by various things. Perhaps there are different values overriding the situation.

If you do not want to help your parents in their dotage, that’s your own call. I don’t believe you should feel obligated to do so if it’s not something you want to do. It’s the end result of a lifetime of interactions.

If you reach a point of true financial independence, would you quit writing The Simple Dollar?
– Jenny

I’m honestly not sure. My big question would be whether or not I still had anything to say that was of value to anyone. If the answer is “no,” I’d just archive the whole site and leave it up for others to read and get value from.

I would still write – I love to write. I just might focus on other areas – fiction, food, sports, gaming, or some other area of passion for me.

One possibility might be that I would just slow down my posting rate here to start other things. I might go to one post a day or three to four posts a week and use all that spare time to launch other endeavors.

The last thing I would do is retire into idleness, I can tell you that. I’m not wired to sit still.

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

Loading Disqus Comments ...
Loading Facebook Comments ...
  1. LDH says:

    I’ve got my money in order. I’ve got my cooking skills in order. The one thing in my life that is never in order is cleaning/organization. It’s something I constantly struggle with, the way others probably struggle with money. You seem to have it together in nearly every way…I’m curious what you to do conquer household cleaning and organization, if you care to share in the future. I know you read unclutterer.com because you sometimes reference it in the round up. I read it too, but I still struggle, a lot.

  2. PS says:

    DOnt go for magicjack, there is absolutely zero customer service, and many features do not work, and it is not reliable and also you need to leave your computer running. Its not good as primary phone at all. That said, if you want to use it as a secondary phone, it might be a pretty cost effective solution.

  3. Rick says:

    Regarding the car loan, usually the interest rate will be lower for a shorter term loan. For instance, when I looked at the rates at my CU, it was 3% for a 3-year loan, 3.5% for a 4-year loan, and 4% for a 5-year loan. Obviously, in this case, the shortest term loan for which you can afford the payments is the best, since you’ll pay less in interest.

    However, if indeed the rate is the same all the way up to 72 months, I would take out the 72 month loan. But I would pay whatever extra money I can towards the payments to try to pay off the loan early. No sense in paying extra in interest if you can help it.

  4. Studenomist says:

    I can’t picture you quitting writing. Same with me for that matter. I love to write. If I were to become “rich” I would write even more. I would just write about different subjects: traveling the world, investments, etc.

    My question to you Trent: what type of life would you lead when you finally do retire many years down the road?

  5. BJD says:

    on magicjack vs skype.. PS(comment #2) says you need to leave a computer on to have magicjack work — is that the same for skype of how does skype work?

  6. Kristina says:

    I’ve recently been introduced to Puerto Rico. It’s a fun and challenging game. It’s interesting trying to think of ways to benefit your own island most while trying to figure out what other players plan on doing and preventing them from following through with their plans. Do you have any strategies you follow? I really dislike choosing the Craftsman role myself when everyone else is also able to produce goods.

  7. Sharon says:

    Cast iron is great, especially for anything for which you’d use a skillet. It’s relatively inexpensive. Though it does require more maintenance than stainless steel, it’s a low level of maintenance. Unlike most pots and pans, you can also use it in the oven. You can even take it camping (well, not backpacking!) and put it right in the fire. I have heard that a very small amount of iron may leach into the food; this may actually be a health benefit (an added mineral). Personally, I find teflon TOO slippery.

    Although the benefits outweigh the negatives in my view, with cast iron, you do have to remember not to touch the handles (which can become very hot) with your bare hands, and it is quite heavy. Also, I believe it cannot be used with ceramic cooktops.

  8. Michael says:

    I wouldn’t leave an inheritance to “Trent” or “et” either. Sensible people leave money to their families and teach them that inheritances are opportunities to do better things than work one’s whole life. Leaving money to children who think the sole purpose of life is to be authentic, hard-working and autonomous is a complete waste.

  9. Michelle H. says:

    Re: Magic Jack

    Check out ooma. We got one a few months ago and love it. It was around $200 on Amazon when we purchased it, and that’s it. No monthly or yearly fees, just pay for the box. Your computer doesn’t have to be on, comes with voicemail and caller id, and it runs through the jacks in your house.

    It was around $200 on Amazon when we got ours, and

  10. Kevin says:

    “If I were planning on leaving an estate, the last thing I would do is tell the people I would give the money to. Instead, I’d just say I was planning on giving anything that was left to ‘various groups’ and simply arrange things privately with my lawyer.”

    So I guess you’re hoping that it never occurs to Trent Jr. to Google search for “inheritance site:thesimpledollar.com” in 20 years? :)

  11. Jennifer H says:

    Hi Trent,

    I’ve been reading your blog entries for several years now. And this is the first time that I’ve had a question that I’m not sure I can answer on my own. I just graduated from grad school in May, and I’ll need to start repaying my student loans in a few months. The Dept of Eduction is offering a 0.25% rate reduction for enrolling in Checkmate II, their automatic payment program (i.e., they withdraw the monthly payments directly from your checking or savings account). Although the brochure indicates that it’s totally “safe” and “secure”, I’m a bit wary. With a credit card, I know that I can dispute any unauthorized charges. But if they empty my checking account inadvertently, I’m guessing that it’ll be very difficult to convince the bank to reverse the charge. Can you think of any other advantages or disadvantages to setting up automatic payment? Is the 0.25% rate discount worth the risk?

  12. craig says:

    Marcus – If you are going to be close to being upside down on your loan, consider adding gap coverage to your auto insurance. In case of your car getting totaled in an accident, gap insurance covers the difference between what you owe and what the insurance company gives you for the car (which will be way less than you think it should be).
    Gap insurance is very cheap ($10-15/year) and can save you in the unfortunate situation where you might need it…

  13. J says:

    MagicJack borders on a scam. Google it and learn about horrid customer service, billing problems, no support and any other number of things that make other services better choices (like Skype or even Vonage). In our case, our local phone company offers a VOIP solution that “just works” (they install it, they maintain it, they fix it when it breaks) with unlimited long distance for the US for the same cost as Vonage.

    Cast iron is amazing cookware — durable, inexpensive and long lasting. We have a few skillets and also got an enameled dutch oven that works great. Check out Lodge, they make great stuff that performs as well as the expensive brands like Le Crueset for a fraction of the cost. Le Crueset does make quality cookware, don’t get me wrong — but it is expensive.

    @Shawn — Variety is the spice of life. Pictionary, Monopoly, Cranium and Scrabble are fun to play but there’s a whole universe of board games out there. Why not try something new and adventurous? Board games are generally relatively inexpensive to procure (the cost of a couple movie tickets, video game or hardback book) and there is a lot of variety out there. Would you always see the same movie, play the same video game or read the same book over and over? Probably not, you’ll see new movies, play new video games and get new books. Board games are no different — you want to try new games out, and you can exhaust the “normal” games pretty quickly.

  14. SarahT says:

    If Angelo is thinking about using VOIP as his only phone service, he should look into the question of 911 call service. It’s something you never want to be without, even during a power outage!

    About Teflon: for me, the problem is that everyone seems to agree it’s a pretty bad idea to eat Teflon, so you really want it to stay on the pan! For that reason as well as longevity, the three nonstick pans I use regularly are hard-anodized nonstick, which is more durable. My experience is that if you treat it well, it lasts many times longer than regular nonstick pans, and so for me, it is worth the higher up-front cost.

  15. Jessica says:

    I’m making your recipe for laundry detergent today. What other do it yourself recipes do you have that you use often?

  16. amber says:

    We’ve used magicjack for a couple years now, with few problems. I’ve not seen any spyware, and the only ads are the ones on the actual interface (ads to further your subscription, never seen ads for anything else). The three times we’ve needed to contact customer service, there have been people available to help me over the chat or phone, and they did fix our problem. The big issue I have is service during a power outage, which is not really an “issue” but an annoyance for us since we have cell phones. Other minor issues are call quality and automatic upgrade downloads. Our main computer is 7 years old and needs a memory upgrade badly, and so ALL programs run slow. That affects how the calls sound on both ends. When the magicjack is on our much newer laptop (like when we’re traveling/at a hotel, etc.) it sounds great, no problems.

    My husband even mailed one to his grandmother in Colombia, SA, so she could talk to her family here in the US without having to break the bank on phone cards or international calls. She chose a phone number local to the family and when anyone here calls her, it’s a local call for them, even though she’s in another country.

  17. Dan says:

    Funny to hear everyone’s perspective on inheritance.

    One of my entire goals in life is to have enough money to leave to children. However, I don’t want to leave it to my own children, I want to leave it to my grandchildren.

    I think passing down money from generation to generation is a wonderful idea. Yes, you have the chance that one will not appreciate it, but I believe my teachings to my children to be strong enough to withstand that kind of behaviour.

    Read the books on Joe Kennedy. Granted, many of that family legacy have failed, but those that haven’t are reaping the wealth of life right now.

  18. Anna says:

    @ Joel, I disagree with Trents statement about getting a credit card for a store you shop at. I use credit cards for all my purchases: easier to keep track of in my budget, guarentee the credit card will back me up if something goes wrong, get paid for things i’d be buying anyways. Citi Cards has a card that will most likely fit any need you have. Pick a card that gives you the most rewards on things you use often but still gives you rewards for everything else, and one that DOES NOT have an annual fee. Some cards offer cash back and others offer you rewards to get gift cards for your favorite places. They are where I started out getting a card and I have expanded but they are the most user friendly to get started.

  19. Marsha says:

    Re pans: there are some ceramic pans that are nonstick and supposedly don’t have the health risks that Teflon (and similar) coatings have. I’m using Green Pans and I like them fine. I don’t know if I’m in love with them yet – but they are lighter weight and lower maintenance than cast iron.

  20. Allie says:

    Dear Simple Dollar –
    The only way I can stop using credit cards is to not have them at all. I have balances on my cards though. I just want to close the account & pay down the balance. However, I read that will hurt my score. What is going to hurt more – high balances on maxed out cards or closing the account and paying it off? This really is my only option. I would love to hear your opinion!! Thanks!

  21. Noah says:

    Agricola is of course brilliant. If you want to try something similar but a little different, check out Caylus. And get modern version if you can!

  22. sjw says:

    @LDH – have you checked out Flylady? Sometimes a bit too flakey for me, but good core content/approach.

  23. Kris says:

    Wow, I must be the only lucky one on here who has never had a problem with Magic Jack. I have used it for almost 2 years now. I have a desktop I use for watching internet TV, Netflix and MLB.com… I have my magic jack connected to that desktop and I can say that while it does have the ad capability ( much the same way Amazon and other websites do ) that everyone is so paranoid about, the only ads they have ever sent to their little box in the software was for the magic jack ( which is pretty dumb ).

    The downside, I don’t feel the calls are as good as what I had with Vonage, but I don’t talk on the phone too much so it is perfect for my needs and I save a bunch of money.

  24. Daisy says:

    My boyfriend went to Gen Con this year and mentioned Cuba which is supposed to be very similar to Puerto Rico; have you tried it out yet?

  25. torrilin says:

    Cast iron will leech a minute quantity of iron into your food. This does act as a (very small) iron supplement, and is a real benefit if you tend towards the anemic. If you regularly cook acidic foods in cast iron, it may end up being more… but it eats the finish on the pot, so it’s not the greatest idea anyway.

    If you’re buying new, you can set yourself up with cast iron for about $100. $20 for a 10″ frying pan. $60 for a 5 qt Dutch oven (no enamel). $20 for a griddle. The only other thing most cooks would need is a smaller/lighter saucepan for soup, rice, steamed vegetables and finish munchers like tomato sauce. If you have a crock pot, you may find the Dutch oven is largely unnecessary. If you like fondue, you might find a cast iron saucepan worthwhile. If you can plan ahead, you can sometimes manage to get things like Lodge’s Dutch oven with skillet lid… still $60, but it covers two jobs.

    There are a lot of other kinds of cookware available, but it really is hard to beat cast iron on price and function.

  26. Stan says:

    @Joel — Keep in mind that the value of any rewards you may get from a rewards credit card are lessened IF you carry a balance from month-to-month. Rewards cards tend to have higher interest rates, as well, which can further erode the benefit of those rewards.

    So if you get one, do your best to pay in full each month.

  27. lurker carl says:

    Regarding that automobile purchase, you can’t afford it if the vehicle can not be paid for within 36 months. A 20% down payment should prevent you from being upside down in the loan, unless you’re being gouged on the purchase price.

    Regarding inheritance, it depends on your family and circumstances. One size fits no one. Sometimes the “legacy” is better off going to charity.

    Regarding supporting one’s parents, you help when they are unable to live independently. When they are financially irresponsible, you need some strict guidelines as to their financial behavior under your generosity along with your expectations of when they will be independent of you again. Obviously, the outcome is different when they approach becoming physically or mentally unable to live independently. Either way, you must have the financial means and emotional stamina to take on becoming the parent to your parents, they tend to resent that reversal of roles.

  28. ann says:

    Re: inheritance – my parents told myself & my siblings that they were leaving certain items to each of their children (some with monetary value, some with sentimental value, some with both) after they have passed away. My dad said IF there is anything left (meaning money) after all is said & done that we should split it equally amongst us, but not to count on it. Since they have retired they have been doing quite a bit of traveling and enjoying their time together. Instead of leaving any money to us after they are gone, they are giving what they can and want to NOW. They would rather see us use the money now for things we might need or want (a new refrigerator, send the grandkids to summer camp, rent a HUGE house at the beach and having all the kids & grandkids vacation with them). It makes them happy to give to us now. If there is nothing left when they are gone, I say good for them. They worked for their money & they should be able to spend it when & how they want to. They are under NO obligation to pass any inheritance down to their kids or grandkids because nobody did it for them and all that they have they got on their own.

  29. KC says:

    To Joel

    You said your father set you up with a credit card. Is he the primary card holder and yours just an add on to his card? If so you are not building ANY credit history which is bad when it comes to buying home in a few years down the road.

    Also using a credit card than a debit card had some advantages such as extended warranty etc,. Go for a card with NO annual fees and pay the amount in full every month. You would do much better!!

    my 2 cents.


  30. Michelle H. says:

    I second the recommendation for Lodge cookware. I bought a porcelain enamel coated dutch oven a few months ago after the teflon started flaking on my roasting pan. Love it! Very versatile – has been used to roast chicken and cook soup – and was much more economical than le crueset.

  31. IRG says:

    RE: Skype
    You’re only paying $24.99 a year for skype, that includes calls to other phones (not computer to computer)?

    Did you get some special deal? I’ve been using skype for over 4 years and it’s always something like 2.95 a month for unlimited domestic usage.
    And we even have a skype in number, which supposedly nets you a discount.

    Also, yes, skype does require you to have your computer on.

    And if any problem develops with your computer’s microphone and/or audio, skype may no longer function properly.

    Plus, the quality of the skype calls varies greatly depending on where you’re calling.

    We invested in really good quality headsets and we still have issues occasionally.

    We can hear OK but a lot of people we call say they have problems. This means skype is NOT so reliable for business purposes.

  32. Damester says:

    Trent writes:
    I don’t believe you should feel obligated to do so if it’s not something you want to do. It’s the end result of a lifetime of interactions.

    Ah, Trent. If only life were that simple. Even if one’s parents were the source of much unhappiness (and I don’t mean the minor stuff of life, I mean major trauma), even if they were truly “unworthy” (based on their behavior and choices), it is very difficult to not help in some way.

    Perhaps your comments were only referring to monetary assistance.

    My brother and I had a difficult, to say the least, time with our mother. Suffice to say that both of us would have been better off never dealing with her.

    But it’s just not that simple. Compassion is the key and in the end, it’s about whether you can live with yourself or not if you decide to offer no form of help to someone who needs you.

    It cost us time, energy and money and it was emotionally devastating (our mother was of course totally unappreciative and hateful in the process even while needing us…something she hated as you say would). Even knowing how it turned out, we’d still do it again. Because frankly, to not have helped would have been unconscionable.

    FYI: There were no other family members to help.

    I can totally understand and accept that there are some situations where no matter, you cannot help people.

    FYI: As for never wanting to be a “burden” to your children? I rather doubt that is how your children will feel.

    The children of parents who loved them and raised them well (with respect for the children), do not feel obligated to give care. They WANT to give care.

    And sometimes, Trent, you need to learn to accept the gift of giving. Let’s hope if you need it, you will graciously accept help from your kids.

  33. Melmar says:

    I love cast iron cookware, it cooks like a dream. I have a couple of le creuset pieces I got secondhand super cheap & they are awesome. If you have the black type of cast iron a great way to clean it is to use a bit of cooking oil & kosher salt. It scrubs the pan very well without removing the seasoning, which soap will do. Keep up the great posts!

  34. Chris says:


    I’m a new reader and I was just wondering if you had an “introductory” guide to The Simple Dollar? Maybe a resource where I could find your best and most useful posts (“useful” is of course subjective). Any chance you could create one?


  35. Jim says:

    re Marcus’ car finance question.

    I’d strongly recommend he keep the term of the loan below 60 months and preferably 3 or 4 years.

    He is trying to buy a USED car and he says: “I am trying to balance the loan length with the rate of depreciation, so at any point in time if I need to sell the car and I still owe, that I am not upside down on my investment.”

    The shorter the loan term the better as far as keeping it so the car value > loan balance.

    If you go longer than 60 months than the principal on the loan could get higher than the present value of the car if you assume 20% annual depreciation rate.

    Buying the cheapest car he can make due with is also a good idea. That will free more cash for him to pay down his credit cards faster.


  36. wisnjc says:

    As far as phone service goes, if you want to keep your landline, try Pioneer Telephone for long distance. Call quality is good, and the rate of 1.9 cents/minute is very competitive. There are no service fees or monthly minimums or plan charges. My phone bill is often 50 or 70 cents for a month with Pioneer! This is a good alternative for those of us who do not want to do VOIP or get rid of our landline for various reasons.

  37. chessiq says:

    I was wondering if you have looked into “lifetime webhosting” – how do ensure that your content lives on (i.e. your blog keeps being hosted) without your active renewal, for example, 75 years from now?

  38. SMS says:

    ldh#1..for organizational skills try flylady.net. It is a little corny at times but the basics are there for you to adjust to you needs. She has a theory that many procrastinators are really perfectionists in disguise. As a perfectionists you can either be neat/organized or so paralyzed by your perfectionism that you never know where to start, so you don’t. That’s me, but she gave me a starting point. I wish I found her years ago when my kids were little and I was drowning in chaos. My life has been forever changed.

  39. Jayson says:

    I am a senior in college. My freshman year I got my first credit card with every intention of being responsible. I quickly got into a lot of debt that I could not pay off. I stopped using my credit card and have been paying as much as I can since then. I have not missed a payment or payed less than the minimum payment since I have had a card. In the past couple of years, I applied for and received two more credit cards with 0% on balance transfers so I might have a chance at paying the bill off. I am now down to a couple hundred dollars and will have the last but payed off in a couple months. What Is your suggestion for me at this point in time? I have three credit cards, two of which with no balance. Should I go ahead and cancel the two older cards? I am also interested in a good rewards card. Now that I am more responsible I would like to start making credit cards work for me instead of the other way around.

  40. Jay says:

    Having to leave the computer on was a deal killer for me when I was looking at MajicJack, Skype and several other VOIP based solutions. Instead, I decided to buy a Linksys PAP2T device – a small $30 box – and get an account with callwithus.com. Setup was pretty easy and I did not need any super technical skills to get it going.
    1. Does not need a computer. (It does need an internet connection)
    2. Phone connects directly to the PAP2T device and behaves (almost) like a normal phone. It has caller-id, voicemail etc.
    3. Cheap calls: $0.0099/min within US/Canada. I call India and pay 2 cents per min which is the cheapest, reliable service I have found.
    4. Easy to travel: I take the box wherever I travel to have the phone line in the hotel where I can be reached directly. I have travelled internationally many times with this and its always been great to have my US phone number overseas.
    5. Hackable: If you have the geek-itch, you can easily set this up with Gizmo and Google voice on your cell phone. Gizmo has software that can be downloaded to your cell phone to make voip calls over the Internet.
    1. Not free within US
    2. It is not a one-click solution like Skype or MajicJack.
    3. Just like any other VoIP solution, you will need to adjust QoS on your router to get best voice quality. I have not had this issue in the US but its been a problem on low-bandwidth internet connections overseas.

  41. Michael says:

    Re: MagickJack
    Get Gizmo (gizmo5.com) and a Google Voice number. People call your Google Voice number from real phones, and the Gizmo software will ring on your computer. You can also place free calls to the continental US, and cheap ones internationally.

    Google Voice invites take about 3-4 weeks to get after you sign up.

    Re: Teflon
    I love cooking. While I don’t think eating teflon is going to give me cancer, I hate using teflon pans. You aren’t supposed to use metal utensils with them, and they always end up losing their teflon eventually. I like stainless steel or cast iron pots and pans and I just make sure to use enough butter, crisco or no-stick spray.

  42. Josh says:


    I would not cancel any of the cards, but if you do, cancel the newer cards as the older the card, the more it helps your credit score. Cancelling a card hurts your score because it lowers your amount of unused debt, and shortens your credit history as well.

    If you just apply for one new card, with a good rewards program, and have the discipline not to use the other cards, that would be your best bet. Just make sure you update your address etc… on all the cards when you move.

  43. “The last thing I would do is retire into idleness, I can tell you that. I’m not wired to sit still.”

    I don’t like the idea of “retiring.” I can understand retirement from a career when one gets into their 60’s, but I would only retire because I’d have more time to pursue other ventures. Like you, I always have to be “doing something.” If I was financially independent (i.e. had enough wealth to comfortably last for the next 80 years), I would probably spend a lot more time doing things I truly am passionate about. I’m sure you would do the same.

  44. Dave says:

    Do you ever feel that you have many things pulling at you at once, frugality being just one of them? When purchasing food for dinner, I like to eat some protein (meat), as I go to the gym a lot. I like to eat healthy, so that meat should probably chicken or fish. And, I’m not a big fan of fish, so I find myself eating grilled chicken 5+ nights a week. (I’ll vary rice/pasta and veggies on the side). Without limiting the quantity of chicken, I can’t really get the price down, although it’s usually around $2 a meal. I’d like to be more frugal, but I don’t want to sacrifice my health to save $1/lb on meat, or make my effort in the gym worthless, by eating a protein-free dinner. I don’t too much mind the monotony (although I am open to suggestions), but was more curious if you ever feel the same way?

  45. ChrisD says:

    What are your views on leaving an estate for heirs? … but I’ve read some authors who say the goal should be to have a 0 balance

    This is tricky. If you are planning to spend all your money and finish your life with 0 then you run the risk of running out if you live for ages or go senile and need expensive care. If you have investments and live off the interest then you will end up with lots left over.
    The latter is definitely the better bet (if you can manage it). Trying to finish on 0 is just too risky.
    The question then is whether to leave the money to charity or family. If the family is well able to support itself, then I think charity needs the money more. Like Bill Gates, his children will get a mere few millions.

  46. Teflon is cheaper than cast iron? In what universe? I have great cast iron cookware, most of which cost about $10 and will likely last forever!

  47. Steven says:

    When the Security and Exchange Commission fines a business or individual for an infraction or violation of the rules, usually the fine is pretty hefty – sometimes in the millions of dollars. What does the commission do with the fines they receive?

  48. Shelly says:

    An alternative to Teflon, which is far more durable and doesn’t peel, is Autograph. It’s pretty much next-generation Teflon and is available in higher-quality cookware.

    I have a set of Anolon Titanium pans with Autograph and love them. They are dishwasher safe and have put up with a ton of abuse without scratching. I don’t really enjoy the concept of seasoning and hand-scrubbing my pans, so this is a great alternative. Non-stick wise, I find it’s far better than any other pan I’ve used.

  49. Barbie says:

    My son-in-law has all but given up on his favorite sport, golfing, because of the cost. What is the best place to look for golfing coupons?

  50. Esther Ziol says:

    I would be obligated to care for parents because of what the Bible says to Christians–if I do not take care of my family (especially a widow), I am worse than an unbeliever.

  51. Sydnee says:


    Both my parents died in a matter of 10 months. My mother first naturally. She was the one who handled all the money, my dad was really worried right after she died.
    Then he was killed in a auto accident.
    I found out he left me over $300,0000. quite a bit of money when I wasn’t expecting anything.
    My husband, kids and I spent it badly. I was so grief stricken I wasn’t thinking right.

    I would have to say tell the person your leaving money too that you are doing so. So they can have a plan. Because if they love and miss you they will not be thinking right if they find out after you die.

  52. Elizabeth says:

    I like the point that Teflon degrades over time, while cast iron actually improves over time with proper use. I got my favorite skillet at a garage sale for 25 cents. It looked like hell but with a little initial elbow grease and many years of use it has a fantastic finish, more non-stick than some of my mom’s old teflon.

    I see rusty cast iron pans at the thrift store all the time — the rust can be scrubbed off and with proper treatment (scrubbed and then “seasoned” with oil and heat as Trent describes, then forever after washed with very little soap and COMPLETELY dried to avoid rust) you could have yourself a great set of cookware that will last literally a lifetime, for very little money.

  53. Walter Daniels says:

    With regard to leaving assets for heirs, I have a system that I would use. From 16 to 25, I would match their earnings $0.50 for every $1. From 25 to age 31, it would be $1 for every $1. At age 31, I would match their accumulated assets $1 for $1. That would allow them to accumulate their own assets, and be rewarded for doing so.
    There would be no “waiting for the Financial rain,” to worry about. :-) They would earn their “inheritances,” not just wait for them. Then, at maybe 50, they would sp;lit whatever was left, of the overall total.

  54. RU says:

    Hi Trent,I have a question for you. We had a company wide re-structuring and everyone got to know their new job title. would it be an acceptable code of conduct to ask people what their new job title is? (Just to know where we stand in the company).

  55. laurenly says:

    I am a college student, just starting my final year. I was lucky enough to be able to pay for college with scholarships and the help of my parents, so I have absolutely no student debt. I’ve had a checking account for several years, but I have never opened any kind of credit card account as the idea of that much financial room has always intimidated me.

    I was wondering what I could be doing to responsibly build my credit/ credit score so that it will be at the optimum point when I look into making significant purchases (house, car) in the future. I am worried about going down the wrong path if I’m not even sure where to start.

  56. Josh Moore says:

    “Simply put, you can’t change the past. It’s water under the bridge. The only moment you control is the now and so worrying about the past doesn’t help.”

    I once heard this put as ‘today is the tomorrow you dreamed about yesterday.’

  57. ema002 says:


    How can you make phone calls with Skype on your iPod Touch? I’ve heard you can’t use it on there because it doesn’t have an internal mic. Do you only use the messaging feature on your iPod touch?

  58. #Joel, another reason for getting a credit card is to build a first step of your credit history (assuming you do not have any other credit account).

    #Angelo, I use MagicJack to call customer service number etc. It avoids me giving my my cell (my only number) and also wastes my minutes. I agree that I don’t like the spyware feature in it. But it’s just $40 a year.

  59. James says:

    My employer discontinued 401(k) matching this year due to the recession. So I’m trying to reassess how much to contribute. My initial reaction was to max my Roth, cushion my emergency reserve to six months, and focus on non-retirement accounts since I don’t particularly like my 401(k)’s offerings. But I’m wondering if there’s some way I can predict the tax advantage of putting more money in the so-so 401(k). For example, if my income level is near the border line between brackets, can I up my 401(k) enough to put me in the lower tax bracket. And would it be worth it?

  60. valletta says:

    #36 Esther Ziol @ 10:19 am August 25th, 2009
    I would be obligated to care for parents because of what the Bible says to Christians–if I do not take care of my family (especially a widow), I am worse than an unbeliever.

    As an “unbeliever” I forgive you:)
    I would (and do) care for my widowed mother because it’s the right thing to do. Christianity, for me, has nothing to do with it, but I respect your faith:)

    I know that my husband and I are both going to receive generous inheritances. But….I never count my chickens! Who knows what the future brings? Look at all the people that thought they had money with Bernie Madoff? Who expects their spouse to leave them (divorce, death) later in life?!
    Plan for the worst, I always say :)

  61. valletta says:

    Oh, and back to cast iron.
    DO NOT buy cast iron Made In China!
    There *may* be lead. Not worth the chance as USA made cast iron is SO affordable.
    Lodge Cast Iron is great and cheap. It lasts forever. And you can often find cast iron at garage sales or online at craigslist, freecycle. etc….Also, tell family members! So many people (older relatives?) have multiple cast iron pans sitting in cupboards that they would love to give you!

  62. AReynolds42 says:

    I recently graduated college and have 2 student loans to pay off:
    Loan 1: about $4,000 left on it with a 6.8% rate
    Loan 2, Part 1: about $3,000 left with a 6.8% rate
    Loan 2, Part 2: about $7,000 with a 4% rate
    Loan 2, Part 3: about $6,000 with a 5.3% rate
    The kicker on loan 2: I was ‘automatically selected’ to pay off both part 2 and 3 before I can even start paying off part 1 (with the crazy high rate).

    I have asked around and done a bit of research on my own. Really the only thing that I keep coming back to is Ramsey’s idea of paying off the smallest loan first, while still making minimum payments on the other loan (so I don’t default). I have already built up an emergency fund and am trying to decide how to tackle these loans that would be the most profitable in the long run.

    Any and all advice will be welcomed. Please and thank you in advance!!

  63. Jules says:

    Hi Trent! Question for your reader mailbag. If it’s been addressed in of your 76 posts already I apologize and feel free to point me to it.

    What is your process of reviewing books? Do you read the whole book and then do the review? Do you have any advice for writing good book reviews?

  64. Adam says:

    My wife (fresh out of grad-school) recently accepted a new position and boosted out household income substantially. We’re both in our mid-20’s and have until this point paying for tuition and not saving. It’s now a priority for both of us, but are not sure what type of account will work best for us. I’ve done some research and a Roth IRA appeals to us, but the income limitations, while not an immediate concern, might be in the next few years. If we were to cross the limit what would the repercussions be? I can’t seem to find anything about that scenario. Does it make more sense to start or a traditional IRA in addition to our 401(k)s instead?

Leave a Reply

Your email address will not be published. Required fields are marked *