Questions about Silver Certificates, Microwaves, Outlet Stores, TVs, and More!

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. Figuring out financial goals
2. Credit card sign up bonus
3. Child not worth cost?
4. Saving in a Roth IRA
5. Water is cheap but…
6. Outlet stores and quality
7. Musicians and money
8. Confused about buying a TV
9. Old currency
10. Money blog for seniors
11. Inherited house
12. Buy it for life: microwave
13. Balancing full-time and freelance work
14. Favorite games under $10
15. Showing up for a job

I had the opportunity to see Guardians of the Galaxy recently. With all of the humorous elements and action elements in the movie, do you know what my one thought was after walking out of the theater?

I was amazed by the high quality of Star Lord’s Walkman.

He received the Awesome Mix tape when he was, say, ten years old. He was still listening to it – or to a copy of it – on that same Walkman when he was thirty. That means his Walkman lasted twenty years.

I respect devices that work for multiple decades. Star Lord’s family must have had good taste in portable music players.

Q1: Figuring out financial goals

I’m a young professional in Europe. I work as a consultant and earn very decent money. Since I don’t have an expensive lifestyle I can save a lot of my salary (on average the equivalente of 2000 Dollars per month). I thought it would be good to have a couple of objectives/goal to work towards. My idea is that I want to set objectives for the next 6, 12, 36 and 60 month on a rolling basis. This means that in six months I will assess the outcome of my efforts with the preset objectives and calibrate the objectives accordingly. The objectives comprise topics such as saving goals, pension contributions, salary increases etc.

So my question is, how did/would you design your objectives (if you did something similar)?
– Sam

Your financial goals should directly line up with what you want to be doing in life at each of those points, so the first thing I would do is to try to visualize my life at each of those stages. What have I personally achieved? How has my life changed over that period?

Are you married? Kids? Are you still employed at the same place? Freelancing? Small business? Are you living in the same place? Same career track?

Try to develop an optimistic but realistic picture. From that, you can build a financial plan. If you have goals that will require spending in the relative short term, keep that money in cash. If you’re building up out past the ten year mark, invest that in stocks and real estate – things that have some short term risk but generally have good long term returns.

Your life should always lead your money. Figure out what you’re actually going to be doing in the future before you make financial decisions.

Q2: Credit card sign up bonus

Is there any reason not to sign up for a credit card to get the sign up bonus, then cancel it really quickly after paying off that initial purchase? For example, I got an offer to sign up for an credit card that gives me an immediate $70 off my purchase. What’s the catch?
– Karen

There are two disadvantages to doing this.

First, it’s going to cause a pretty notable but fairly short term negative bump to your credit score. If you are going to be signing up for insurance, changing jobs, getting a new lease, getting a mortgage, getting a car loan, or anything like that in the next year or so, you shouldn’t do this.

Second, it provides another identity theft window. You’re sharing your personal info with yet another financial institution. While each instance of doing so creates only a small chance of identity theft, you make the stack of chances bigger every time you apply for a card.

While $70 does seem tempting, other cards offer bigger signup bonuses. Chase offers cards that have a $150 offer if you spend $750 on the card in the first three months, for example.

Q3: Child not worth cost?

My husband and I are torn on having children. When we think about it without looking at money, we want to do it, but whenever we see numbers like those that say it will cost $250K to raise a child before college we stop. We can’t possibly afford that. Sometimes I feel like we’re being greedy and choosing money over a child but I don’t want our future to be bankrupt.
– Alice

First of all, you should feel zero obligation toward a hypothetical future child. You have not made the decision to conceive, so you have no responsibility at all here.

Children are expensive, don’t get me wrong, but you find that they change so much of your life that most parents find that they’re able to financially absorb the costs. I spend a lot of time doing things that I would likely have never done before we had children and most of those things are incredibly inexpensive.

We rarely go out to eat any more, for example. It just doesn’t really work. Instead, we eat at home where it’s much cheaper. I spend weekend afternoons building blanket forts and doing household chores instead of going golfing – again, much cheaper.

While these are good financial choices, they’re also better choices from a strictly parental perspective. Your life just works differently.

Q4: Saving in a Roth IRA

I’m 30 years old, earing about $85k in a very expensive housing market (greater Boston). I’ve been renting, but am thinking I’ll be buying in the next 3-5 years and I estimate I’ll need a down payment of around $100k.

For the last 4 years I’ve been stashing my down payment fund in a pretty conservative mix of Vanguard stock and bond index funds, currently worth about $40k. I recently decided to start a Roth IRA (on top of the company matched 401(k) I already contribute to), and I’m wondering if it makes sense to move some of my down payment fund into it as I won’t be able to hit the cap on the Roth fund otherwise.

If I understand the Roth correctly, I can take out my contributions at any time, so I wouldn’t be dinged for taking out the down payment money (the $16.5k I can put in there in the next 3 years), as long as I leave the earnings there until I retire. Do you think it is worth the trouble for the gained tax free earnings?
– Kelly

You can certainly do that, but you’re not going to earn a mint.

Let’s say you’re going to retire when you’re 65. You’re 30 right now and you intend to contribute $5,500 per year to your Roth IRA, then withdraw it in 3 years, right? That plan is only going to leave you with $21,000 in your Roth IRA at age 65 – and, figuring in inflation, it will only be worth about $7,500 at that point.

This isn’t a bad solution, of course – it’s better than nothing. However, it’s not going to be the difference maker when you reach retirement age.

I would only go this route if you’re fine just giving up on some of your IRA contributions for those years. If you’re doing well with retirement savings in other forms – and it sounds like you are – then it’s not a big deal. However, if you’re not saving at all for retirement, you should be using your Roth IRA for retirement, period.

Q5: Water is cheap but…

When I figured up how much I was spending I couldn’t believe how much I was spending on beverages. I drink 2-3 cups of coffee in the morning, a cup of juice with breakfast, a few sodas in the afternoon, and usually a few beers or a mixed drink in the evening. It was adding up to a couple hundred a month!

I quit all of it cold turkey (except for a beer or a mixed drink once or twice a week in social situations). The caffeine headaches weren’t bad. The big challenge I am having is that water is… boring. Are there cheap ways to liven it up without making it really unhealthy?
– Andrew

My favorite solution is tea. I often make “refrigerator tea” in which I put four tea bags in a gallon of water and stick it in the refrigerator for 24 hours or so. It usually makes very good tea. I don’t add sweetener, but you may want to add a bit of honey or sugar to it.

I used to add a bit of citrus – usually lemon juice – to my water, but lately the price of citrus fruits has skyrocketed, so this isn’t really a frugal option any more.

I have a close friend that swears by Crystal Light. She buys it on sale with coupons and stocks up on the stuff. She gets small mix-in packets of the stuff, adds it to a bottle of water, and shakes it up before drinking it.

Q6: Outlet stores and quality

I recently learned that company outlets often carry items specifically made for the outlet stores – stuff of lower quality. Read this article –

Your readers might want to know this. Items bought at outlet stores might be cheaper, but they’re not as well made.
– Marsha

This is something I’ve noticed as well. We went shopping at a few children’s outlet stores a few years back and we were both surprised at the clothes. We saw another woman simply try to remove a boy’s shirt from a hanger and the sleeve ripped off, and we noticed that some of the items were really thin and seemed like they would fall apart with just a washing or two.

Over and over again, I find that you get what you pay for. The best route for getting “bang for your buck” is to do research on specific items then track down those specific items as inexpensively as you can, stacking sales and coupons.

If you want to go ultra-cheap on clothes, visit a consignment store. If I’m going to pay “outlet store” prices, I’ll usually find more worthwhile stuff at a consignment store than at an outlet store.

Q7: Musicians and money

I want to bring to your attention to consider addressing the plight of the musician in this current age. And how in the past musicians were able to perform, sell music and songs, music was purchased in hard copy and online – and there were able to be “professional” musicians – meaning they could do it “full time” and survive.

Because now music is considered “free,” many artists are no longer able to this. — (unless they have private funding, patrons, or corporate sponsorship)

They have to take other jobs to supplement their income. They are still expected to have cool music videos and professional sounding recordings – and they are expected to “give it away” for free — because well – that’s how it is now…

Just saying, food for thought. You may want to at least consider mentioning to readers that if as we use great free services like spotify (of which I use as well… and I am a musician) – also contribute to artists when you have the means – Kickstarters, Indiegogo, Pledgemusic, Patreon. Tip them, go to shows, consider the years of work that goes into their craft. — support them – honor them- – value them – Many musicians are just changing careers and music is suffering.

Do a service to us musicians and remind readers the value of music before you list all the ways to take it for free.
– Linda

I completely agree with this. The best way to support a musician is to see their live show or to drop some cash into their guitar case while they’re playing on the street or to buy a CD or other memorabilia directly from them.

I am a huge fan of Patreon and I wish it were in wider use. It’s a service that enables you to give any amount to an artist/musician/writer on a regular basis – say, a dollar a month or five dollars a month. Doing so usually gets you some sort of special access to the artist. I contribute to a few musicians there and one of them mails out a free mp3 to supporters once a month.

Buying an album is no longer the best way to support musicians you love unless you’re buying from them directly.

Q8: Confused about buying a TV

My wife and I have been using a big old television for about 25 years, but it’s about to kick the bucket as it takes a long time to start up and the screen is dim for the first 30 minutes or so of use. We have been looking at a new television but all of the features and different versions are just overwhelming. The salesmen always think everything is the greatest and that we need everything but we don’t. On our current TV we just have a DVD player and our cable box hooked up. What should we buy?
– Daniel

If I were you, I would simply buy a low-end LCD television that matches the dimensions of the large television you’re replacing. So, if your current television is 32 inches, I’d get a 32 inch television.

Before you buy, contact your cable or satellite provider and find out whether or not you can hook up your current cable box with an HDMI cable. You’ll also want to find out the same thing about your DVD player – how does it connect to your TV?

Depending on how things are set up, your new television will either need two HDMI ports (if both your cable and DVD can use HDMI), one HDMI port and one cable port (if one uses HDMI and the other doesn’t), or two cable ports on the back (if neither uses HDMI). You also may need one or two HDMI cables – get the cheapest ones.

Just get a low-end television that has the right ports and you’ll be fine. Don’t expect it to last as long as your old television, however; flat panels generally don’t (though their picture quality is far better).

Q9: Old currency

My grandfather hid away a lot of currency during the 1930s and 1940s. He kept it in coffee cans in his shed. My father inherited all of it but just left it in the cans and stuck them in a storage unit, which I have now inherited.

Almost all of the money is in $5 bills. A few are really big and say FIVE SILVER DOLLARS on the bottom and look really old. The rest just say SILVER CERTIFICATE along the top. There are some $10s too. Very few $1s. I think he mostly just saved $5s for some reason.

How can I establish if these are worth anything? I tried Google searches but I couldn’t find much. A few look really nice like they just came from a bank, but most look like they’ve been used like normal money. The coffee cans have been sealed and dry for many years so everything is in good shape.
– Gary

I’m guessing that the fives you mention look something like this. If they do, you’re lucky – those can go for hundreds each. They’re called “portholes” and were only issued in 1923. Here’s some more information about the 1923 $5 silver certificates.

(I like being able to deliver good news like that. I feel like the appraisers delivering good news to people on Antiques Roadshow.)

The rest are probably not worth much more than face value, unfortunately. You can probably get $7 or so for each $5 that are outside of that special group.

I know that many people are often hesitant to have dealers appraise items for them. My usual approach in these situations is to ask for their fee for an insurance appraisal on items. My impression is that most dealers do a pretty good job with this, but will lowball you if they think you have any interest in selling.

Q10: Money blog for seniors

I’ve been reading your blog for a few years and love it. You cover so much and do it so well. (But I do miss the weekly quotes.)

However, I’m past 65, with the mortgage paid off, debating whether to retire, and how to live with more opportunities to enjoy myself but fewer means to do so. Do you know of a blog similar to yours that is geared to a senior audience?
– Sarah

This is a niche that isn’t really very full yet. There aren’t many sites out there that cater specifically to issues facing people in their sixties and seventies. Most internet content is generated by people 40 and under, after all.

Having said that, this is a great list of websites that do a great job of catering to people in situations like yours. I can’t speak for the quality or relevance of each one of them, but I’m pretty sure you can find something worth reading there.

I think this is a category that’s begging for a great blog to come along.

Q11: Inherited house

My wife and I have inherited her grandparents’ home. It is a very large old house with six bedrooms. It hasn’t been particularly well-maintained over the last decade, as her grandmother lived there alone and mostly didn’t worry about things. She just put coffee cans under leaks and stuff.

We are both 31. We are still paying off student loans and will be for the next few years. We have several thousand in savings that we were going to use for a down payment, but now we have this big house. Locationwise it’s pretty good, but it’s so big and energy inefficient.

I guess we are trying to decide whether it makes sense to live here or not.
– Kevin

For me, the real question would be whether or not you were interested in investing sweat equity in the house.

It’s likely that most of the problems can be fixed with relatively straightforward home improvement projects. Of course, I can’t see the house, but most houses in these situations mostly just need a roof replacement and some refurbishment.

If you’re willing to take on those kinds of projects, then this is a great opportunity and I’d stay there. If not, I would sell it and roll the proceeds into your separate home fund.

Q12: Buy it for life: microwave

We are in the market for a new microwave as our old one finally died. We would like to take a “buy it for life” approach with it. What do you recommend?
– Anna

Consumer microwaves are designed only for occasional use. They simply aren’t “buy it for life” material, unfortunately, unless you get into ones designed to be used in a commercial environment.

Commercial microwaves are generally much more expensive for what you get in terms of features, but they tend to last a very long time and usually cook much faster than consumer microwaves.

I’ve had experience using this Sharp commercial microwave. It uses an analog dial instead of a touchpad for cooking and doesn’t have a temperature control, but the one I know of has worked well for a very, very long time. Without pushing toward the four figure area, this would probably be my pick for a “buy it for life” microwave.

Q13: Balancing full-time and freelance work

I currently have a full-time job but I also do a lot of freelance work, which has been increasing over the past year and now takes up a fair amount of my weekend. Right now I’m struggling to make time for everything.

My freelance only amounts to 10% of my income so quitting my full-time job is out of the question. Besides, I actually enjoy my full-time work and don’t want to quit. I’m just freelancing to diversify my income stream and because it’s something I enjoy as well. But now I’m working pretty much every single day and I’m starting to lose interest (and sleep). How do I balance things?
– Shawn

I really can’t answer this question for you. You seem to be moving in a direction where you resent the freelancing work, and if it’s only earning you 10% of what you make at your main job and is eating up a lot of your weekend and causing you to work every day, you’re probably not making a good hourly rate at it. In your shoes, I’d walk away and find something else to do with that time.

If you want income diversity, focus on spending less and investing that difference. Let’s say that you’re making $40,000 a year, so you managed to figure out a way to cut out 10% of that in terms of spending cuts. You then have $4,000 a year to invest. After three years, you have $12,000 invested and, if it’s earning 7% on average per year, that’s an income stream of $840 per year. It doesn’t take long for investing to match what you’re earning from your freelance work.

On the other hand, I often look at the drudgery of work as simply borrowed time. It’s time I’m spending in a way I don’t enjoy right now so that I have more time to enjoy later on. I don’t mind it so much when I look at it that way.

There is no right answer here, provided you are spending less than you earn.

Q14: Favorite games under $10

Do you have any recommendations for board and card games that are fun and cost less than $10?
– Jim

That’s a pretty low price point, but I do have a few suggestions.

The best investment in that price range is a deck of ordinary playing cards. There are many, many great games that can be had with an ordinary deck of playing cards – bridge, pinochle, rummy, canasta, poker, pitch, and so on.

My favorite under-$10 game from a game publisher is probably Lost Legacy from AEG. It’s a quick deduction card game where people use a surprising amount of logic and strategy to figure out which card is the one they’re all looking for.

Q15: Showing up for a job

While, from a purely financial perspective, your advice on not feeling remorse for canceling on a job after you’ve committed may make sense, I beg to differ. When you accept a job, you’re giving your word that you will show up and do the work – and based on your word, that company will reject its other candidates. They will have spent many hours respectfully evaluating you alongside other candidates, and accepting then withdrawling acceptance of their offer means that all those hours were for nothing and they generally have to start from scratch. If they’re hiring a class of people the case may be different, but my organization would be really, really harmed by someone doing what was described in one of today’s letters. Just wanted to provide the other side of the argument…
– Connie

I do see where you’re coming from, but the problem is that a job offer is not a guarantee of employment, either. I have had job offers rescinded in front of me, including one that was rescinded after I made housing arrangements.

We unfortunately live in an environment where workers have little reason to believe that a company or organization will do anything to take care of them. The best thing to do in that situation is to take care of yourself. (Of course, going back on a letter of acceptance is a textbook case of “burning bridges” and it will probably cause you some reputation and career damage.)

The only way I can think of to get around this is to offer a contract that specifies some sort of penalty if a certain minimum isn’t fulfilled. That way, if they sign it and fail to follow through, the organization can recoup some of those losses. I’m actually surprised more hiring arrangements don’t have agreements like this.

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.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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