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. Navigating career difficulties
2. Handling an untrustworthy manager
3. Planning out retirement spending
4. Preparing for personal sabbatical
5. Climbing out of debt
6. Leaving entire estate to child
7. Investment house closing?
8. Easiest way to read classics?
9. Cousin won’t stop selling Scentsy
10. Taking freebies
11. Pantry waste
12. Getting multiple copies of coupons
If I were to draw one conclusion from the last several years of Money360, it’s this:
Money does not buy happiness, but it can buy some degree of security.
Happiness is a fleeting thing. What most of us are really seeking is contentment – a day-to-day good feeling about our life. Money doesn’t buy that, outside of the small amount needed to meet basic shelter and calorie needs. Everything else beyond that doesn’t seem to really contribute to contentment (but it can be pretty effective at creating bursts of happiness).
What money can do, however, is provide some protection for contentment. It can ensure that your basic needs are met for a long time into the future, if you’re wise with it.
The trick, then, is to find that contentment. Along the way, don’t give into the urge to use money to find a short-term burst of happiness, because that just fades quickly. Instead, find what makes you content and use your money to protect and preserve and perhaps gently enhance that, whatever that is.
Personal finance is valuable, but it doesn’t directly buy happiness. Instead, it just preserves contentment. You have to find contentment on your own.
This is an idea I expressed at length a few weeks ago, but it feels incredibly true in the last few weeks.
I’m in a difficult spot in my career and feel that you’re uniquely suited to offer some great advice due to your background and point of view.
Some backstory: I work in financial sales for a major retail bank, something I’ve done basically my entire career. In 2016 I left a company and position that I was fairly happy with for a new position that gave me much more freedom. I took the position even though the salary was below market for that type of position because of the company culture and the freedom that came with the role. For the most part, I was able to manage my own schedule, manage my own sales process and develop my own strategies. I had a great manager who was helpful and supportive in every way I needed without being overbearing. I was honestly able to say that I would have been happy spending the rest of my career there. Then early in 2017, the company decided to lay off my department’s management team and merge our department with another. Since then, they have gradually eliminated most everything that attracted me to the role. My schedule is now strictly controlled by the manager, my sales process is extremely micromanaged and the company culture has shifted from one that I would recommend to anyone looking for a job, to one where I would recommend new applicants run away screaming.
At this point, I can’t see any circumstances that would keep me at my current company. I’m actively searching and networking for new jobs, and have already put in a few applications. My questions are about what to do between now and then.
The numerous negative changes, coupled with the fact that I’ve made up my mind to leave have made it extremely difficult to perform at the same high level that I did last year. I can’t seem to find the motivation to do more than just the bare minimum to keep from endangering my job. I keep thinking that I don’t want to do more for a company that I no longer believe in and will be leaving soon. Another part of me is aware that this mindset is bad both in the short run (I don’t know how long it will take me to move and lower production means lower bonuses) and the long run (at some point my lack of motivation will become very apparent to more people than just my direct manager, and who knows when I’ll work with them again). What do you suggest to break out of this negativity?
This is not your job any more. This is nothing more than paid preparation for the next step in your life, whatever it may be. Your path leads elsewhere. Right now, someone is simply paying you to build skills that you’ll use effectively in the next stage of your life.
That doesn’t mean that you fluff off all work. It means that you approach it in terms of maximizing the long term value for yourself. That should be your focus in every action you take at work.
You’re not burning bridges, because that’s not going to help you long term. You are building relationships, but only the ones that might help you long term. You are doing the absolute minimum on tasks that won’t help you long term, and giving much more concerted effort to things that will either produce products or build skills that will be helpful to you in the next stage.
Everything is about the next stage. Try to get into training programs that will make you a better worker later. Focus on tasks that really work over the skills you’ll need later. Build relationships that may prove useful later. Look at every aspect of your day from the perspective of six months from now, when you’re walking out the door for the last time and walking in the door of another business. What can you do today to maximize your value at that point?
Thinking of your job in this way completely changes the whole picture. It changes almost every choice you make throughout the day. Things that once seemed urgent and important decline in vitality rapidly, and vice versa.
David has a follow-up question regarding specific aspects of his current job.
My new manager is a huge part of the problem and I’m unsure how to deal with her. In addition to lying about multiple work related situations, she continually steals my clients (which takes away from my bonus but doesn’t affect hers at all), forces me to do work that is not part of my job, amongst other things. If I were planning on staying, I would address these issues through joint meetings with her and her manager, but since I’m leaving, I don’t know if it’s worth it. Additionally, she is the type of person who would use that conflict as an excuse to “go after” me. As I said, I’m sort of doing the bare minimum right now so there are probably not any ways she could “manage me out” but it’s a fine line and you never know. Do you think it’s worth it to address some of the issues with her or continue to law low?
Thanks in advance for any feedback or advice.
It’s not worth it. Treat her as an obstacle at this point. Minimize your interactions with her. Reject tasks that aren’t part of your job that don’t help you with the long term (as discussed above), and if that causes a problem with her, simply take that individual bit up to her supervisor. Spell out that your plate is currently overflowing anyway and that adding this new, extra tasks just ensures that other tasks won’t get done well, if at all.
I think you’re already doing these things, but I strongly suggest doing them with the “six months out” perspective I gave you above. What can you do today to make that “six months out” version of yourself be in the best possible situation? Having him get fired isn’t good, so try to avoid that, but choose among your work tasks in terms of the ones that puts your “six months out” self in the best possible state.
She’s going to be the company’s problem and not your problem soon enough.
If you do actually care about others at the company that may be affected by her bad behavior down the line, leave a quiet note for her supervisor as you leave. Have an exit interview with that person and flat-out state that you’re fairly sure that she’s stealing from clients but that you don’t have evidence and point to some things to watch. Don’t directly accuse her, but just point to some things that she’s doing. This might help some of the people you leave behind from being dragged down by her.
My husband and I have retired, and are now looking at how to spend our retirement savings. We have two rentals (paid off) that bring income, our own home (we owe $40,000). We have heard that with our investments (of our IRAs etc.) we can safely spend 4% of those assets yearly. Does this include the value of our homes? Does this include our monthly income? What do we base the 4% number on? I think that it should be based on our assets, not including our income. My husband thinks we should include our yearly income. For example: if we have $500,000 in assets including our, IRA accounts, 403B accounts, we could withdraw $20,000 per year for 25 years. We would still own 3 properties. My husband thinks we should include our income of $55,000 per year and also withdraw another $2,200 from our savings per year.
We would like to travel now, while we still are able to (we are 67 and 65), so we are wondering if we should have a reverse mortgage on our home (which is worth approximately $300,000 (conservatively) so that we could eliminate the mortgage we are paying and perhaps use that money for travel.
What are your thoughts on this?
The 4% number should be based on those assets with which you would be fine living without in thirty years. If there’s an asset that you can’t accept losing at any point, it shouldn’t be a part of that 4%. Your primary residence is probably in that category.
I think it’s a mistake to include both the value of the rental properties you own as well as the income they generate. Eventually, to obtain that 4%, you’re going to need to sell one of the rental properties, and when that happens, you’re going to lose a significant portion of your retirement savings in one swoop. I would either include the value of the properties (because you view them as liquid) or the income they generate (because you don’t think you’ll ever sell them).
This brings us around to the question of a reverse mortgage. Does it make sense or not? A reverse mortgage comes with a bundle of pros and cons which are nicely summarized here. Basically, if you go into it understanding some of the risks and accept that the fees and interest are fairly high and that you’re likely leaving an estate with almost nothing in it to your children (if you have any), it can be a way to generate some additional income in retirement. It depends on how much you currently owe on the house, though, and I wouldn’t sign one unless it allows the longest survivor of the two of you to live in the house until death.
I am 29 years old, single, no children. I got a great job straight out of college and have been working here ever since. I have received good to great performance reviews every year. My career feels as stable as it can possibly be.
One of my dreams since I was pretty young was to spend several months walking the Appalachian Trail, and I have decided to do so next spring. I have talked to my boss about the possibility of doing so and he is open to the idea. The idea would be that I would essentially take a four month unpaid vacation to do this, leaving work sometime around May 1 and returning around September 1. I am an accountant and our busiest months are in February, March, and April; our summer months are always slow.
What can I do to financially prepare for this adventure?
The first thing I would do is make sure that your insurance is taken care of during this trip. Does your insurance package at work cover you during your time on the Trail? If not, you’re going to want some kind of insurance package to ensure that you’re covered in the event of something like a broken leg or a broken arm or some other severe ailment. You’re going to walk thousands of miles in a few months. There are, quite simply, risks involved with that, and you don’t want to lose everything because you weren’t prepared.
What I would do is sit down with my boss and try to get this worked out as an unpaid vacation, so that you retain your benefits without actually receiving a paycheck.
Assuming you have that, your next step would be to build up a very sizable emergency fund, one that will sustain your living expenses during this endeavor. While I’m sure that you’re relying on camping during this trek, there will still be food expenses and other incidentals along the way and you won’t have money coming in. Start saving as much cash as you can, right in a savings account.
You’re also going to want to invest the time to thoroughly research the trip and make sure you’re approaching it with as much wisdom and foreknowledge as possible. Take advantage of the people who have done this before and use what they learned to make sure this adventure goes smoothly.
I’ve been climbing out of debt and poor past practices for a few years now and see the light at the end of the tunnel. I’ve been reading quite a bit of blogs including the Simple Dollar. All of them mention having an emergency fund which I totally agree. What I do not understand, is why I would have a large emergency fund of 3-6 months of take-home pay while having credit card debt. I can see keeping a small amount, say $1000, in an emergency fund but why wouldn’t I want to payoff the credit cards that have a high interest rate after saving the small cushion? The cards, after the small cushion, would be the emergency fund until they are all paid off at which I would then boost up the emergency fund.
In general, the recommendation is to build a small emergency fund – $1,000 to $2,000 – and then start addressing high interest debt, like your credit cards. Only when the high interest debt is out of the way (with high interest meaning anything with an interest rate in double figures) should you start building a larger emergency fund (when you reach that point, I suggest automating it with automatic transfers from your checking account each week or month).
Of course, while you’re doing this, if you have to tap your emergency fund, slow down the extra payments on the debt and replenish it before continuing. Try to avoid using your credit cards as any kind of emergency fund.
The small emergency fund is there to handle things like a car problem or an unexpected emergency trip without having to fall back on credit cards. Your goal should be to pay off credit cards, part of which is learning how to live life without maintaining a balance, and having a small emergency fund really helps with that.
I am a single adult male, 31 years of age. I have worked as a systems analyst for the past eight years, earning enough to pay off all of my student loans and put just shy of $100K aside for the future.
I would like to leave my entire estate to my nephew should something happen to me. He is currently a 1 year old toddler. I have confidence that his parents will raise him with values and encourage independence and learning in him, but they don’t have abundant financial resources. I would like to be able to help him with some of his later life expenses.
Do you have any suggestions? I already have a simple LegalZoom will in place that gives all of my assets to him. Are there further steps I should take?
If you have faith that the child will use the money wisely (with guidance from his parents) and the amounts aren’t significant (meaning within six figures), your plan is reasonable.
The challenge here, of course, is that you want to retain full control over those assets when you’re alive. You want to use them for your own life, which means that options such as starting a trust fund for the child really don’t make a whole lot of sense.
I will say that, if you can afford to do so, I would start contributing to a 529 college savings plan for the child. Regardless of what happens to you, that child will likely grow up and have some sort of postsecondary education, and a 529 account will help greatly with that. Whatever you can contribute, as long as you do it consistently, can really help.
I use the app Robinhood to purchase ETFs. Since it’s an app, I realized there’s a fairly high chance that Robinhood will go out of business at some point. What happens to my ETF shares if that happens?
From their website:
Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org.
What that means is that up to $500,000 of your securities are insured by the SIPC. If Robinhood ever goes out of business, their insurance will step in and reimburse you in some fashion. Typically, this is done by setting you up with a brokerage account at a different investment firm, one who has taken over the assets of Robinhood.
As long as you’re not investing over $500,000, you should be fine!
I know that Project Gutenberg exists and makes available free copies of classic books that anyone can read. However, their website is a challenge and I don’t really know a convenient way to read them. What is the best way to read public domain classic books for free?
The Project Gutenberg website isn’t too bad to navigate once you know a few tricks (it’s vastly improved from some of the earlier versions). My preferred way to find and read classic books from there is to visit their mobile site, http://m.gutenberg.org/, which has a very nice mobile interface. I prefer it to the desktop one by a large margin unless you’re actually at a computer with a huge screen and, honestly, even then, I still use the mobile site and just make my browser window small.
When visiting the site on mobile, you actually have a lot of options. Let’s say you’re looking at the mobile page for Ralph Waldo Emerson’s Essays. The easiest way to read immediately is to just click on the “HTML” link, which opens the book in your web browser and you can instantly start reading it by scrolling downwards. The full book is one giant HTML page.
A much better option, if you’re on your phone or a tablet, is to click on the “Kindle (with images)” link. If you have the free Amazon Kindle app on your phone or tablet already, you’ll be prompted with a link to open the book in the Kindle app. Do so and the book will be in your Kindle app, for free, ready to read.
I can’t even tell you how many books I’ve downloaded this way, but the number is quite large. The only catch is that such books are only on the single device you’re using now, so it’s not synced to any other Kindle devices you may have.
I have a cousin who started selling Scentsy and Mary Kay and Pampered Chef stuff a few years ago – yep, all three, and probably some others too if I could remember. At first, those of us in her family were mildly supportive of this and we bought a few items, but after that “success” she started bringing all of her catalogs and sample stuff to every family event, even things like a Sunday lunch at her grandpa’s house. She’d go to everyone asking if they needed more stuff.
Eventually, we started just automatically saying, “Nope, we’re good.” But then when she wouldn’t sell anything to us, she’d go in the other room and sit and look devastated and eventually one or two of us would go buy something from her.
This routine has gone on for years and we’re kind of getting sick of it. Most of us don’t want any more stuff from those companies at all. We don’t want to spend the money on stuff we don’t need. We also kind of resent the fact that she pretty blatantly treats us only as clients for the stuff she’s trying to sell.
What’s the best way to handle this?
One of you needs to sit down and have a heart-to-heart conversation with her about this. You need to flat-out express to her that most of the family feels like they are nothing more than clients to her and that she has pretty much permanently tapped out any goodwill she might have towards those products.
It’s likely, from her perspective, that she’s heavily invested in selling those items and she needs to recoup her losses. Most of those businesses require some degree of up front investment from their salespeople, setting them up to sell those wares to family and friends while the people on the ground – like your cousin – have actually absorbed all of the risk. Thus, she feels stuck with all of this stuff.
If that’s her situation, you can feel some sympathy for it, but you should not do anything to encourage her to have any further business with these organizations beyond selling out her stock. You might agree to buy a final piece or two under the understanding that she’s not selling to you guys any more in the future, but that’s at your discretion. The goal here would be to simply get your cousin back into a good place.
What are your thoughts on taking freebies from businesses like pens and stuff? Is it unethical to take several if you know you’ll use them? Should I use the free pens at local businesses to stock up on pens? Wife says this is cheesy but I don’t see the problem.
My feeling is that if you ask the proprietor and they say, “Sure, take several!” then you’re okay taking several. If you’re taking several without asking, then you’re probably crossing a line.
I generally think that when tubs of freebies are available at a business, the implication is that you’ll take and use just one, or perhaps two if you’re going to use them immediately (like a breath mint or something). If you’re going to use more than that, just ask. In general, unless the business has a strict policy of one per customer, the person will say, “Sure, take a few!” and then you’re fine.
As for the pens… personally, I get really frustrated with cheap pens. They tend to leak a lot and often at the most inconvenient moments. I’m willing to spend a little bit to get a pen that writes well and won’t leak on me.
I cleaned out my pantry and found myself with several boxes of food items that I’m not going to use that are still good. Seems really weird to sell them on Craigslist. What do I do with them?
You might want to consider giving that stuff to the local food pantry. There are a lot of people in your community that could really use that stuff.
At the same time, I’ve got to wonder why you’re throwing out perfectly good food items. My guess is that a food allergy or some other medical issue or dietary change has arisen. If I were in your shoes, I would be figuring out uses for those items, at least anything that I could still eat.
If you’re really intent on selling them and getting some money back, you might want to talk to a neighbor. If you’ve changed diets, simply explain your dietary change and say you’re selling off some food items you bought recently before the change. Give a huge discount and you might get a small amount for the items.
I’ve started dabbling in coupons a bit. My husband likes to get the Sunday paper like he did when he was a kid and read it on Sunday mornings so I’ve been digging into the coupons. There’s usually about 3-5 good coupons in a flyer and there are usually 2-4 flyers in a paper so it’s not bad.
The thing is that when I find a good coupon I want to stock up on that item, so I’d like to be able to get multiple coupons of the same kind. How do I do this? I don’t want to go buy a bunch of extra copies of the Sunday paper. Advice?
There are a bunch of ways to do this.
One way is to go to a gas station early on Monday morning and ask if you can scavenge coupon sections from the Sunday papers that they’re about to toss. I know of a gas station near me that does this if you ask, but they seem to have a few people that do this so you can only get the coupons from a few newspapers.
Another way is to ask at the library. Many librarians will put out the Sunday paper for readers on Sunday morning and just toss the coupon section or save it for a patron that asks. Our local libraries have people who get their coupon sections already, but your local library might have them available.
If you stop by a coffee shop or a restaurant on Sundays, you can pillage the coupon section of their newspapers if you’re a customer there. They almost always don’t care if you clip a coupon or two, as long as you don’t destroy the actual content of the newspaper.
You can ask neighbors to save their Sunday papers for you if they get them, too. Tell them you want all of the ads as well – they can just bundle them up and you’ll grab it later on Sunday.
You might also find some success with a paper recycling center. They may allow you to dig through their paper recycling bins to retrieve coupon sections.
Those strategies should net you some coupon sections!
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.