Questions About Auto Trading, Retirement Annuities, Mylar Curtains, Life Principles and More!

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Trading up for lower mileage
2. Retirement annuity estimate
3. Debt collection by email?
4. Taking lower pay for happiness
5. Writing a challenging “thank you”
6. Personal challenges on limited budget
7. Making Mylar curtains
8. Disability, retirement, and taxes
9. Far off Target Retirement date?
10. Life principles
11. Ready to retire?
12. Starting vegetarian

One of the challenges that the world faces in the coming years is the fact that the vast majority of human jobs are going to be able to be handled by computers and intelligent machines in the next 20 to 50 years. Even now, when you go into a factory that might have once employed a thousand people, you find maybe 200 workers and many, many machines that are doing the vast majority of the work. That’s only going to get worse.

Within 20 years, we’ll have self-driving cars that can function as low-cost taxis. We’ll have machines that can fully sort and deliver the mail. We’ll have machines that can fully automate crop and livestock farming. We’ll have machines that can make and sell simple foods, replacing the staff at many restaurants. In each instance, rather than having many, many people employed in these fields, you’re going to have just a handful of people whose job it is to largely manage and repair the machines. That’s it. Not too long after that, we won’t even need people for those jobs.

Those advances are amazing, but the problem is that it will create incredible unemployment of a type that isn’t easily solved using the remedies that we’ve been using for unemployment for the past 50 years or so. How exactly we handle this transition as a society is going to be a real challenge, and it’s one that I wish our nation’s leaders had the courage to discuss openly.

Q1: Question about trading up

We’re considering trading up a couple years or so in vehicles and paying cash for the difference. We currently own a 2008 Enclave 101,000k miles in very good condition. It’s value, based on KBB, is $11-$12k. We’ve found a 2010 Buick Enclave with the same options as ours, mileage is 78k, and the dealer is asking $16,995. Do you think it’s worth $5000 to upgrade 23k miles?
– Jill

More than anything, it depends on how you’ve taken care of your current car. You know what the 101,000 miles on your current car have been like. Has the maintenance been taken care of with great diligence? Are there any problems with the car that might be coming down the road? Has the car been cared for inside and out?

When you switch to another used car, part of the risk you take on is you don’t know whether the previous owner did those kinds of things. Did they take care of the car? Did they do the proper maintenance? Are there any major problems coming up in the future for that car? You just don’t know.

If you’ve taken really good care of your car and there are no problems coming in the future, I would stick with what you have. If you only change the oil when the oil light comes on, never wash it, and never do any of the other maintenance, it’s probably time to run it through a car wash and dump that pending disaster.

Q2: Retirement annuity estimate

I have $80K from an inheritance that I want to convert to a retirement annuity. How do the determine the monthly amount I would receive?
– Clarisse

Just knowing your starting amount isn’t enough information to calculate a monthly return on your annuity. You need to know the fees associated with that annuity, the interest rate offered, and the length of the annuity, too.

To get those numbers, you have to get some quotes from insurance companies that provide annuities. It sounds like you want a lifetime annuity, so that changes the calculations a bit as it involves an estimation of how long you will live. Different insurance companies are going to offer you different quotes on this.

My only suggestion is to do some homework on each insurance company. Do they seem to be long-lasting, stable companies? Don’t get a retirement annuity from a less stable company, even if the rate they’re offering you seems good.

Q3: Debt collection by email?

There’s a debt collector contacting me by email. They are requesting me to pay with Western Union person to person. Is that ok?
– Nina

No, that’s not okay. Do not trust anyone with any sort of financial information by email. You have no idea for sure who is emailing on the other end. You need other forms of contact, preferably by regular mail.

Another huge warning sign here is that they want the money via Western Union. That’s not how a legitimate debt collector does business. A money transfer in this way gives you basically no recourse if the person receives the money from you and just vanishes without doing a thing for you.

I would stay far, far away from this. Everything about it screams “scam.”

Q4: Taking lower pay for happiness

Read your article about money not buying happiness, etc. Here’s my dilemma. I work in the medical field and make 200k/yr, with 150k student loan debt. Not really liking the area after five years, and getting laid off. So the silver lining: I am getting a severance, and a chance to move somewhere where we can be really happy. So far my choices are A) Take a job in a rural area at 240k/yr, closer to family and at a facility that offers a chance to get a significant loan payoff, however not the ideal place to live as we are getting kinda sick of this cold state, etc. Or B) Move somewhere where it’s much warmer, close to ocean, new adventure, etc., albeit further away from family and only paying 160k/yr with not much for student loan payoff. Seems like easy choice financially but alas, getting sick of the state we live in. Would happiness really be worth losing $800,000 over 10 years, on a risk we may be happier warmer/new adventure? Btw I’m married w/two young kids. I know, first-world problems lol. I figured stay in the area, have that 800k saved in 10 years, and by the time kids go on to college then we move? We are 35 years old. And all jobs in my field in the South pay way less.
– Kevin

If there’s anything I’ve learned over the years, it’s that happiness comes from inside, not outside. If you’re unhappy in one place, you’re going to be unhappy in another place once the “newness” of the move wears off. Happiness is a mental state that often has little to do with your actual current situation. Much of it is unconscious and much of it is steered by biochemistry, but you can make conscious choices that will encourage natural happiness.

A much better approach in life, from what I can tell, is to figure out your long-term goals and do what you can to achieve them as quickly as possible. What do you really want your life to look like in five years? Ten years? When do you want to walk away from your profession and retire? What big milestones do you have in your career?

For me personally, knowing that my time is spent building toward something means more to me than where I might be living. Without that, I feel like I’m just running in place, and that is the one thing in life that leaves me feeling genuinely unhappy. That sense of “running in place” can happen anywhere, though. Sure, I might enjoy warmer weather, but if I’m not actually improving the circumstances of my life, it could be 75 degrees outside every single day and I’d still feel unhappy about things.

What do you want from your life? What are you really working toward? What do you want to have built 10 or 20 years from now? Those are the questions you should be thinking about more than anything else. Any moving that you do should largely be in the service of answering those questions.

Q5: Writing a challenging ‘thank you’

I work at a coffee shop and am leaving for a different job. A regular customer bought me a leather journal for my new job. I’m trying to write a thank you note but I only know him as ‘double espresso guy’. Help! How do I address him ?
– Olivia

Honestly, I’d call him the “double espresso guy” in quotes, just like that. Just be appreciative and kind in the rest of the note.

Given the “relationship” the two of you have, it’s completely expected that you wouldn’t know each other on a first name basis. He probably knows you a bit better than you know him – after all, you see many customers in a day and he likely mostly just interacts with you – but it’s still not a deep relationship.

Referring to him as “double espresso guy” does show that you were paying attention to him, however. You remembered his most frequent order and tied it to his face, which does mean that you knew who he was and at least one key thing about him, which is important. He wasn’t just another random face, even if you didn’t happen to know his first name.

Q6: Personal challenges on limited budget

I live on disability of 800 dollars a month. After rent, house insurance, cable, phone, transportation (I use a wheelchair) and food, there isn’t enough money to buy underwear, etc. etc., so I get depressed and go to dollar store. I know, but it’s all I can afford — and buy stuff I know I can live without, but it’s the only way I can feel like a person. How do I stop this, how do I budget nothing? Some days I don’t even get dressed I’m so depressed. I try to eat healthy but foods I can afford are less then healthy, more for long shelf life – tuna, pasta, etc. – which results in my obesity. Any ideas you can share with me please please please? Hopeless and beyond sad.
– Maggie

My first piece of advice to you would be to make sure you are getting all of the assistance available to you. If your only source of income is $800 in disability, you are likely eligible for other programs like SNAP, food pantries, clothing pantries, and so on. Take advantage of them. Those programs are intended for people in your exact situation. You can start by calling the SNAP tool free number at 1-800-221-5689. They’ll help you get started.

For more local resources, I’d contact a pastor at a local church. By default, if I were in a town and was very low on resources, I’d look for a mainline Protestant church – Presbyterian, Lutheran, Episcopalian, Baptist, Methodist, etc. – and talk to the pastor there, asking for advice on local services for the poor. Even small towns often have things like food pantries, clothing pantries, and so on.

At the same time, I’d try simple strategies for overcoming depression. Spend more time outside. Spend time with other people. Keep up your basic life routines. Keep your home as clean as you can. Be as physically active as you can. Simple life routines like these can make a huge difference in your mental state.

Those are the approaches I would try in your situation. They may sound difficult or overwhelming, but they are the steps you need to consider taking to start moving in a good direction.

Q7: Making Mylar curtains

Thanks for the post on use of foil mylar emergency blankets for reducing heat gain in the house [August 2014]. My daughter had purchased this material as curtains, but the foil eventually wore off. I had used wooden clip clothespins to attach some to the burglar bar/rebar door to help prevent reduce heat gain though that door.

When the neighbors chopped down their trees, I sewed some huge heat blocking curtains from clean empty plastic woven feed sacks. These were attached to a long PVC pipe at the outside of the house, above the windows. The curtains were able to open from evening to morning and closed during the day. The light and heat caused these to disintegrate over a 2 year period, as was expected.

The goal was to replace the feed sack curtains with the foil mylar emergency blankets. Do you have suggestions as to how to make the reinforced section that will slide the curtains open and closed? I was planning to attach the foil curtains to shower curtain type rings, for easy sliding and folding, to help prevent the foil from wearing off. Thanks for your ideas.
– Denise

I think your idea of turning unused Mylar emergency blankets into curtains for this, and I think putting the shower rings through the blankets is a good idea.

In my experience, Mylar emergency blankets aren’t very thick. It shouldn’t be too though to just cut a few small holes near the top of the blanket for the shower rings. Just space them several inches apart, hang the shower rings on your outdoor rod, then put the rings through the holes. That should work like a charm and it shouldn’t take more than a pair of scissors.

Assuming that these blankets are going to be outside in mixed weather, they’re not going to last for a real long time. The foil will wear off – I’d guess within a year or two. So you will eventually need to replace these as well.

Q8: Disability, retirement, and taxes

I was searching the web for information about TAXES and VA disability: My question that I was searching an answer for is: I was told that if you are receiving 50% Va Disability your Retirement is NOT taxed and that when you start receiving Social Security that will not be taxed as well. Can you help me with these questions and if you can present a web site that shows tax answers would be greatly appreciated.
– David

According to the IRS page on benefits for disabled veterans, you should not include your disability money as part of your gross income on your taxes, so it is in essence tax free.

When you start receiving Social Security, it will be taxed, but it appears from your story that you aren’t receiving much – if any – additional income. In that situation, the actual taxes you’ll have to pay on your Social Security income will be very low, if any.

As always, if you’re unsure about tax questions, the best place to contact for help is the IRS itself. You can call their tax help line at 1-800-829-1040 and they should be able to easily answer any and all questions like these.

Q9: Far off Target Retirement date?

I’m 25 years old and hope to retire when I’m about 60 or 65 or so. To do that I am contributing 20% of my salary to my 401(k) with a 1/2 employer match on all of it. For now I am putting all of the money into a Target Retirement 2060 fund. If I retire at 65 it will be 2055 and I want to stay a little heavier into stocks later into my life. Does this make sense?
– Nathan

It makes sense to me. Putting your money into a “later” Target Retirement fund has exactly the effect you subscribe. It’s balanced for someone retiring later than you, which means it will almost always have a larger proportion of stocks than the Target Retirement funds that actually match your year.

I think that the normal Target Retirement funds (from Vanguard, at least) are a pretty good balance of risk and reward for most people as they march to retirement. If you like a little more risk/reward in your diet, then choosing a “later” fund is a perfectly good idea.

Q10: Life principles

I’m 20 years old and in college. I have enjoyed your site for a good year now and am looking forward to building toward financial independence when I graduate. I have been reading books about cultivating life principles and I have been writing to people I respect and asking about their life principles. What are your life principles? I hope you will answer this!
– Sal

This question has actually been around for several weeks as I’ve been piecing together how to answer it. I’ve been really trying to think about the principles by which I live my life and condense them down into a short list. This is my best shot at it after I whittled things down to five principles. I hope this helps.

First, I try never to say anything about anyone that I wouldn’t say directly to their face. If I criticize anyone when they’re not around, it’s virtually always a criticism that I have already levied directly to them and it’s couched with positive things about them, too. (I don’t use the same measure with public figures, however, as that’s a situation where I can’t really talk to them face to face.)

Second, I’m the only person actually responsible for my own life and I live accordingly. Sure, outside events constantly occur that I have no control over. However, I do control how I respond to them, emotionally and otherwise. I choose how to spend my time each day, whether I spend it in leisure or work or self-improvement. If my life doesn’t go the way I want it to go, it’s mostly on me, not anyone else.

Third, happiness really comes from within me, which is something I alluded to in an answer above. I can make decisions all the time that lead to personal happiness or to personal unhappiness. This comes down to things like individual thoughts – am I thinking joyous thoughts or negative, unhappy thoughts? Of course, there are situations where brain chemistry definitely plays a role here, but most of the time the things I choose to think about shape my mood.

Fourth, children deserve every opportunity and tool that society can give them to grow beyond the situation they were in when they were born. This principle shapes how I parent my children and much of my efforts in the community, as well as my political beliefs. Like it or not, some children are born into families where the parents just don’t care very much about the child at all. Other children are born into families where the parents care but are ill-equipped to raise the child well. Those children are likely to fall far behind through no fault of their own and end up with a very challenging life. There are so many things we can do as a society to help out children. Why do I care so much? As I grow older, children grow up and start taking on roles in society. In my old age, I’m going to be cared for and governed by people who are children right now. I want them to have the best outcomes possible.

Fifth, every single person alive is a mix of “good” and “bad,” and those definitions of “good” and “bad” change from person to person. I might see a trait or a belief or an attitude in someone that I perceive as “bad,” but that doesn’t make that person a bad person or someone that I don’t want to associate with. Everyone, even the people I love and respect the most, are a mix of “good” and “bad” traits. I refuse to give into the temptation to “un-friend” someone or anything like that just because they have some trait or attitude or belief that I consider “bad.” Almost always, it’s counterbalanced with a lot of “good” if I’m willing to open my eyes and look for it.

I can think of many more principles, but these five really do guide most of what I do and think on a daily basis, even down to the smallest of moments and smallest of actions and thoughts.

Q11: Ready to retire?

How do you know when you are financially ready to retire? I am 62 and have $340K in my 403(b) and a pension plan from the state. I I can make ends meet even without Social Security if I’m careful but when SS comes online I will be doing really well (planning on waiting for SS).
– Ethan

I think you’re ready, but it heavily depends on what you want to do when you retire. What exactly are you going to fill your days with when you pull the trigger?

If you’re going to do very little that costs money, then you’ll be fine. If you’re planning on earning an additional income in some fashion, then you’ll be fine. If you plan on doing things that have some expense involved, you’re probably going to be very restricted on those things given the way your situation sounds.

If I were you, I wouldn’t retire tomorrow, but I would spend a lot of time thinking about exactly what retirement means for you and how you’ll be using your time. If your plan involves any sort of increase in spending, you either need to be working more or you need to wait a bit longer to retire.

Q12: Starting vegetarian

Do you have any advice for someone who is switching to a vegetarian diet? I am doing so on April 1. I know you have done this successfully for years and I’m looking for tips from everywhere.
– Karen

I switched to a vegetarian diet for health-related reasons in October 2010, so I’ve been doing this for about five and a half years. I found that the first month or two was the hardest and, after that, it became quite easy.

There are a few real keys for making it easier. First, the people you eat with most often need to also be on board with the diet. If everyone else is eating meat and you’re not, especially during the first month, it’s going to be a lot harder. Constantly prepping two meals and then being tempted by what the other person is eating is really hard. You either need to be living alone or living with people who will also eat vegetarian at least some of the time.

Second, know what foods you like. What vegetables do you enjoy? What dishes that utilize those vegetables do you like? For example, I love black beans. I love tomatoes. I love wild rice. I can eat dishes with those things in them every single day. Know those things. Utilize those things. Make vegetarian dishes that make your mouth water and it becomes easier to stick to it.

There are a lot of “meat substitutes” out there. Most of them are awful. You can try them, but you’re better off just making meals without them. The few “meat substitutes” that I like include Morningstar veggie burgers (which is my default whenever someone is grilling) and Wildwood baked tofu (which I put in lots of different things).

Just try things. If you don’t like them, try something else. There are a lot of possibilities within a vegetarian diet. Good luck!

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. 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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