What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Reverse mortgages
2. Storytelling and profit
3. Refinancing and PMI
4. Short term investing options
5. Children and television
6. Handling old wine
7. Getting a razor blade sharpener
8. Slow cooker boredom
9. Simple tactics for organizing time
10. Cultural worries about moving
I spent most of this weekend playing with my children, for the most part. We played games. We built LEGO sculptures. We created art projects.
Let’s just say it was a great weekend.
I have two sons in their late fifties. Both bachelors and we all live together in my home. My husband is diseased. Just the three of us and all free of other family members.
One is disabled and is on SS. the other just about making a living on minimum wages. The reverse mortgage would be for them when I pass on. Neither have any $ saved. The home is paid for and in good condition.
1. What do you think of a R.M.?
2. Would it be ideal for my two bachelor sons.
A reverse mortgage is essentially a special kind of loan you can take from the bank, provided you’re of an appropriate age (you are). Essentially, you can borrow an amount from the bank using your paid-off home as collateral and no payments are due on that loan until you pass away, at which point the bank is repaid for the loan out of your estate.
If you’re doing this for the benefit of your children, it seems to me that you’ll be able to help them more now while you’re alive, but there will be a much smaller estate available to them when you pass away.
Given what you describe, I would not get a reverse mortgage. I don’t think it fits what you want here.
Q2: Storytelling and profit
I have a friend that’s really gifted at telling stories. He’ll start telling them at any social event and before long he’s holding court with three quarters of the people there. How can this be turned into a money-making opportunity for him?
There are a lot of avenues for this. It really depends on whether or not he wants to do anything with it.
It may be that he just enjoys telling the stories and has no interest in making this into a business. If that’s the case, don’t push him.
However, there are a lot of ways to turn storytelling into a business model, from public speaking to creating internet videos. A good storyteller will always entertain people, and people will always pay to be entertained.
The path I understand the best is the internet video path. Just create a video for one of his stories, put it on Youtube with a catchy title, then share it with people. If it’s good, it will naturally grow and earn surprising money.
Q3: Refinancing and PMI
I am in the process of refinancing my house from 6.8% down to 3.5%. The house appraised for $200,000 and I have a current balance of $168,600. The estimated closing costs are about $4600. My question is about PMI. I have some cash saved up that I was planning on eventually using to purchase my next vehicle went I need it (about $15000). Should I use this money to pay the approx $9,000 and closing costs of $4,600 to get my balance down to $160,000 and avoid PMI all together? Or should I pay the PMI upfront, about $2400 for the whole loan, or make monthly PMI payments of about $46 per month until I get the balance down to $160,000 and keep most of the cash in savings.
If I were you, I’d use the savings to avoid PMI, provided it doesn’t eliminate your emergency fund. This will keep your monthly housing costs as low as possible. Once you’ve done that, start saving hard to replenish the money so that you can also pay for a car when you need it.
The other options essentially result in you paying more money to the bank guaranteed. This path at least opens the possibility of minimizing the money you pay for your home loan while also being able to just write a check for your car. The only change is that your next car purchase might be delayed for a while.
Of course, if this leaves you without an emergency fund, that would be the worst move of all.
Q4: Short term investing options
I wanted to know what your recommendation was for short-term investing on money that is being saved for a house down payment. I currently have $34,000 in savings, with an additional $23,000 in retirement funds (IRA, 401(k)). I presently make $55,000 annually and usually save 35-40% of my paycheck. Some of the money in savings ($6000) is going toward a wedding my fiance and I are paying for next year. The remainder is intended as down payment for a future home. We don’t plan on buying for at least the next two years, and it would likely be closer to four years before we decide to buy. The money is currently in a “high-yield” savings account, accruing 0.9% interest. I’m very risk-averse, so have been reluctant to do anything with the money besides sit on it. What would you recommend to maximize my return on the savings?
If you’re very risk averse and you’re looking at a timeframe that’s less than ten years, your savings account is probably your best option.
Virtually every other option available to you has some drawback. It either introduces risk to the equation or reduces liquidity without really adding much to your returns at all.
If I were you, given your constraints, I’d just stay put.
Q5: Children and television
Thanks to the advice you’ve given over the years, my husband and I were able to make the choice for me to be a stay-at-home mom before our children start school. Right now, we have our four year old and our two year old twins at home and I’m loving it.
My question involves televisison. During the day, we’re always busy with projects and other things, but I do need a bit of time during the day for meal prep and other things. I don’t really want to just plop them in front of the television, though. How do you manage this?
Given the ages of your children, they should be reaching a point where they can entertain themselves for short periods. Set up some projects for them in one room, such as an art project or a big pile of LEGOs or Magna-Tiles, and get them started on playing with them, then disappear into the next room to take care of things while they continue to play.
My two year old and five year old will play for a good thirty minutes without interruption if there’s an art project or a LEGO project on offer. Quite often, they can figure out these projects on their own with just the slightest prompting.
You’re not being neglectful by doing this. Self-motivation and the ability to devise one’s own entertainment are valuable skills your children need to have.
Q6: Handling old wine
I note you recommend a wine saver in your most recent post (super website by the way; has been extremely useful, and enjoyable to read too – these things being not always mutual!) which is indeed a good gift. Not least as no matter how well you jam a cork back in, once fresh oxygen ingress is made by opening a bottle the wine will inexorably gradually deteriorate. This is accelerated by the amount removed (by way of oxygen/wine surface exposure) so a fuller bottle (and that has been tipped less) will last longer in the fridge than the last ¼ of wine, etc, etc. The very best ‘wine savers’ are the ones that also supply an inert gas source – they are more expensive than the ones you linked to but do the job exponentially better so likely save more in the long run.
As the most frugal option though, I would recommend people look to just freeze leftover/surplus/unwanted wine. You can freeze this in the original bottle (assuming enough has been consumed that any expansion will not push out the cork) or if you want to use it for cooking, you can freeze it in small containers/ice cubes, whatever size suits you best.
It has a minimal effect on the taste and quality so can be happily consumed once defrosted (and I know wine judges who go on to defrost in microwaves). White wines may throw tartrate crystals, which are completely harmless (though they can look like glass shards in the bottle, which can alarm people) and red wines can shed some tannins too, which will show as sediment in the bottom of the bottle. No need to be concerned about either… if you don’t want them in your glass, just take care when pouring the last out of the bottle. If using for cooking, don’t be bothered by them at all.
I tend to let my frozen bottles stand on the bench to defrost but in cases of emergency (hah!) have also used a sink of warm water. We don’t have a microwave though. If using that, I would take care to ensure the label has no metal, as that may add unwanted excitement to one’s life.
I am a wine writer/critic and so have more wine than most in my house on a daily basis, and can assure you this method works well. Wine seems to last in the freezer too, though again the fuller the bottle, the better. And probably the higher the alcohol the better too (more robust wines).
Evidently you can freeze sparkling wine equally well, though I cannot attest to this personally as we have never yet had leftovers there!
Of course, you may know of all this already but if not, hopefully it may be of use to you/your readers. No need to mention my details should you wish to disseminate this more widely.
Hope you & your family have a lovely Christmas, and peaceful, prosperous New Year. And thank you again for a great site.
This is good advice all around.
I tried this by freezing some extra syrah and it turned out perfectly fine after freezing and thawing. I haven’t tried it with any others, but I would assume it would work. The only thing that might concern me is the sparkling wine, but I’ll defer to you as the expert on that.
I use red wines in a lot of different dishes, so being able to freeze a bit and then add it to dishes at my convenience is really useful.
I highly recommend the RazorPit razor blade sharpener, which you can get off of Amazon.
I have never actually seen one sold in a store. If you’re looking for one, my suggestion would be to start at the largest pharmacy near you, as that would be my guess as to where you might find one.
If you shave daily, this is almost guaranteed to be a worthwhile investment. I use mine all the time. I sharpen a cartridge about every five to seven shaves and usually get ten sharpenings out of it before the blade just doesn’t cut it any more.
What can’t you cook in a slow cooker?
In the last week, we’ve made cabbage rolls, mashed potatoes, lasagna, and an enchilada mix in our slow cooker(s). In the last month, you can add oatmeal, quinoa, mixed vegetables, and spinach-artichoke dip to the list.
Pretty much any dish that requires a period of baking or cooking under medium (or lower) heat can be transitioned to a crock pot with success. I generally try cooking everything on low and I expect that the first time I try something it might wind up a bit over-done, but through trial and error, you’ll figure it out.
If you’re more cautious, see if you can find a slow cooker cookbook at your local library. There are a lot of them out there and they’re almost all loaded with great ideas.
Q9: Simple tactics for organizing time
We now have our finances under control, but I am struggling with organizing my time during the day. We have several projects that we are working on such as remodeling our own house and a rental, taking care of our many pets, gardening, keeping a thrift store booth going, along with all the other normal duties of life such as laundry, cleaning, grocery shopping, etc.
I find that the older I get, it seems I have less time . Any suggestions as to how to organize time so that I don’t feel constantly snowed under? I know we have a lot on our plate, but it seems that we’re never “on top” of anything but just treading water and accomplishing basics.
The best time management tactic I can suggest is to eliminate some things. If you feel like you’re never “on top” of anything, it’s probably because you’re managing too many things, like a juggler with one too many balls.
You have a rental house, an ongoing home remodel, a thrift store booth, a bunch of pets, a garden, and a large home to keep up. That’s a lot for anyone’s plate.
My suggestion would be to cut back on some of these or even eliminate one of them. Does the thrift store booth earn a lot of money? Is it time to sell off that rental property or perhaps put it under a management company? Could you bear down on the home remodel and get that completely finished and out of the way soon? Could you reduce the size of your garden?
Q10: Cultural worries about moving
My husband and I have lived in a small town (pop. 5,000) for our entire marriage. He’s been a city administrator here that entire time and done very good work. We have three kids ages 9, 5, and 2. Recently my husband got an amazing job offer to adminster a much larger city with a population of about 95,000 that’s a suburb of a much larger city. I am nervous about this move, mostly because of the culture. I like the culture here, but my husband’s salary will more than double if we make this move. Should I be worried about this?
There will be cultural changes, but I don’t think they’ll be as drastic as you might expect, particularly if this city you’re moving to is on the outer edges of a metropolitan area.
If I were you, I’d visit the town and look for areas that are as similar as possible to where you live right now. Check out the demographics of the area you’re moving to, along with the political returns in recent elections, information on the schools, and so on.
You’re never going to find an exact duplicate of where you live, but you can probably find a lot of similarities to where you live, particularly if you’re selective as to the neighborhood where you move.
Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.