Questions From Anonymous Readers

Like any person who runs a popular website, I keep statistics on how many people visit The Simple Dollar (I get about 75,000 visitors on an average week). These statistics me the sometimes interesting (and sometimes strange) things people search Google with that lead them to The Simple Dollar. On occasion, they inspire me to write posts; other times, these search strings will just make me laugh.

I thought it would be fun to go through the searches for a day and extract every clearly discernible question that a reader asked that isn’t already answered somewhere clearly on The Simple Dollar. I do this by taking all of the search terms, pulling out only the ones with a question mark at the end, and checking them all on Google to see what they pull up. If I don’t already answer their question, then I’ll answer it here.

Here are the five questions that people asked the Google oracle and came across my site as a result on Thursday:

How can i build passive income?
Passive income (money that comes in with little or no maintenance effort from yourself) requires extensive capital up front in the form of money, intellectual property, or effort. Sources of passive income include fully-managed properties, web sites, and so on. So how can you build it? You need to invest something of your own into it, whether it be money or ideas or work. Buy a managed property. Start a blog. Write a book. Record some music. Then sell what you’ve got. Over the long haul, money will trickle into your coffers once you’ve put forth that initial capital.

Why are saving accounts a basic part of most people financial planning?
Savings accounts are wonderful places to keep money that is very liquid (meaning you can get it if you need it) and earns a small rate of return with very little risk. Because of these factors (liquid, low risk, some return), they are great places to store emergency funds, which is a fundamental part of any personal finance strategy. An emergency fund is a buffer to prevent budgetary disaster in the event of a personal crisis.

How much would it cost to feed a baby for one year?
It depends entirely on what you feed the baby. According to the San Diego County Breastfeeding Coalition in 2001, breastfeeding costs about $300 a year (the cost of 500 calories a day for a year), while powdered formula costs about $1,200 a year if purchased in 1 lb. cans. With our son, we used a mixed strategy and bought powdered formula in bulk, bringing our feeding cost to roughly $550 for our son’s first year.

When should I start investing in treasury inflation protected securities?
Treasury inflation protected securities (or TIPS) are investments guaranteed by the United States government to provide a rate of return that beats inflation, but barely. At times when inflation is low (the last several years), these aren’t good investments, but if you anticipate an upturn in inflation, then they become much stronger investments. Since I expect the dollar to rebound after the 2008 election, I think that that would be about the best time to buy some TIPS – this is just my opinion and should not be construed as investment advice.

Can you sell your home while still oweing on a HELOC?
You can, but a title search will reveal a HELOC (as a lien should have been placed on the home) and you’ll be required to pay it off for the home sale to go through.

If you liked this “open question” article, let me know in the comments and I might make it into a regular feature.

Loading Disqus Comments ...