Reader Mailbag #10

Each Monday, Money360 opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

As usual, we’ll start things off with a few links to older articles that directly answer questions I’ve heard recently.

Video games and frugality
Staple foods to have on hand to make home meal preparation easier
Is there a connection between saving money and losing weight?

And now for some great reader questions!

I absolutely HATE the Born to Buy reviews. Will they ever end?
– Peter

Yes, the last one is posted tomorrow. I learned a lot from this series, mostly that about 30% of the readers loved it – but 70% hated it. After this one, I’m going back to my old-style book reviews – one long post per book – and try to stir discussion there. Many readers have asked me to go back to that format instead – and that’s exactly what I’ll be doing, starting this Friday. I have a nice big pile of books to review, too, and a few are really intriguing (and one should stir up a nice big argument).

So what ever happened with your plan to buy a Mac?
– Will

Many of your posts indicate that you are a Mac user. I’m curious about your Mac usage as I’m a Mac user as well. How many Macs do you own, and what kinds? What made you switch to Macs (if you have)? What apps do you use in your Mac and what apps do you wish were available for Mac?
– Sowmya

A refresher: a while back, I mentioned that I was about to buy a workstation for writing and some limited video creation and I was debating over what to buy. I was pretty sure that I was going to buy a Mac, but unsure what exactly to get.

What I ended up getting, after some consultation with several readers who use Macs and one wonderful reader who helped me with an Apple Store discount, was a Mac Mini with the processor, RAM, and hard drive upgraded to the max. This ended up costing me a little under $1,000. I also got a 24 inch monitor from Dell – another $300. That, my friends, is my current writing workstation.

I then took some of the equipment from my old laptop and either got it to work on the Mac (in the case of an external hard drive, which now functions as a Time Machine automatic backup) or traded it for other stuff. After some work, I managed to get an older webcam functioning, which serves as my microphone. I also got a copy of VMWare Fusion so I could run some of my old Windows applications.

This workstation handles all of my needs perfectly. I am incredibly happy with this setup. I feel like my writing productivity is through the roof. There are so many nice little details to Mac OS X that simply don’t exist in Windows and once you get used to them, going back is frustrating.

So far, I’ve found software that solves every need I can come up with – iGTD has become my to-do list, for example, and TextEdit is where I do 99% of my writing. I’m very happy with things.

You often admit to wanted three or more children. Do you ever consider the social and environmental cost of adding to overpopulation?
– Amanda B.

The funny thing is that I see this issue in the opposite direction. I see it as my obligation to have a lot of children and to raise them to be strong, independent thinkers and stewards of the earth. The more children I have and raise to treat the earth with respect and think about their choices, the better I make the world.

Similarly, current thinking is that global population is going to fall in the future, according to this article from The Economist. This creates other social problems.

You explained before about how you make money from page visits, but how do you make money from RSS feeds which don’t actually require readers to go to any pages?
– Andrea

Frankly, I don’t. I provide email subscriptions and RSS feeds just to allow readers to keep tabs with the site, send it to their friends easily, and so forth. They don’t directly make me much money at all.

What they help with is that they keep readers involved that might not bother to click over to the site. Maybe they’ll see an interesting article and click through to read the comments. Maybe they’ll see something that a friend might like and send it on to them, and they’ll visit the site and get involved.

To me, that’s an exchange I’m happy to make. Without the email subscriptions and RSS subscriptions, those readers would never read the stuff I write. Letting people read Money360 in that way is fine with me.

I have seen a lot of advertisements lately on television and radio encouraging people to sell their spare gold and silver jewelry to make extra cash.

I know metals prices are up, but do you consider this to be worthwhile? Can the average person really make a lot of money from this (i.e., even $100)? Or would it be better to wait to see if prices go higher?
– Kate

In general, selling jewelry in this way is a way to make money in a pinch, and it seems more lucrative than it used to due to the price of metals today.

If you have no emotional attachment to the jewelry, it’s essentially an investment, and the gold and silver markets are notoriously unpredictable. If I were in those shoes, I would probably try to sell it now, but I wouldn’t necessarily go to those people advertising to buy your stuff. Look for a metals dealer and see what you can get.

I’m finally getting smart and digging out of debt. It’s slow but thanks to you and other blogs, I have plenty of resources for encouragement. But now, I’m totally addicted to many personal finance blogs. I can’t get enough and I want to soak up as much information as I can to help me and possibly others. I’m not much of a writer but curious as to how I can use the knowledge/experience that I gain in help others in the future?
– Chad

There are two things you can do to help others.

The first is to teach your friends directly. Talk to them about their financial choices. It’s often not easy to talk about this, but quite often people do want to talk about these things. A great way to start is by offering up the things you’re doing to save money. One thing to avoid – don’t criticize. Money is often tied up in complex ways with people’s psyches, senses of self-worth, and senses of ethics, and it’s often unpredictable.

The second is to lead by example. Use good financial and frugal tactics and be willing to show them to others. Don’t be ashamed of being cheap – be proud.

“This site is for entertainment purposes only. Trent is not a financial advisor and no information found on this site should be construed as financial advice.”

This is posted on the bottom of your site. I think we all understand that it is there for legal purposes. How do you feel about it, as you clearly are trying to dispense advice of financial nature? Do you see any way that our society could be fixed so that its not necessary for people like you to be required to effectively state that everything you say is worthless just so that you can say it at all?
– Scott

I put that statement there because it’s true. This site is for entertainment purposes – it’s there to make you smile and think and talk about your finances.

I cannot possibly give perfectly accurate advice that applies to everyone’s financial situation. I can’t do that – Money Magazine can’t do that – no one on earth can do that. If you want accurate financial advice about your specific situation, you should go to a financial advisor, not to some random person writing a website. You need to be able to lay out your situation in detail face-to-face with someone – and that’s going to be a fee-based service.

My goal with this site is to make you think about your money, get you talking about your money, inspire you to make strong choices about your money, and improve yourself as a person. Nothing more.

If we all lived in a world where people were honest about their qualifications and accomplishments and were always upfront about the advice they give, we wouldn’t need such statements. I have no interest in ever intentionally misleading anyone – I think that’s pretty obvious from the year and a half this site has been around. The problem is that there are people out there who take advantage of such trust, and then the reaction from the people who have their trust violated is to not trust anyone, and the cycle of mistrust grows from there.

So here’s my question: is it ALWAYS the best idea to pay down consumer debt at the expense of funding a retirement account? What good does it do to free up a couple hundred dollars a month (or even $1000 a month) if you have nothing in the bank for a retirement that’s 15-25 years away and you’ve lost a lot of the opportunity to take advantage of that compounding interest?
– JLiz

Paying down consumer debt only really helps if you’re committed to keeping it off. If not, then it just comes back and you’ve effectively spent that money on stuff.

If you’re truly committed to eliminating debt, then your best route is to always put your money where it will earn the most for you. When there’s high-interest debt out there, the best earning move for your cash is to remove that debt.

If that commitment isn’t there – for example, if you have a long history of having debt and never really getting rid of it – then you should be saving for retirement above all else. Putting that money away into a 401(k) is the smartest move, because it locks that money away and doesn’t let you spend it on stuff.

The best solution for retirement, though, isn’t the 401(k) – it’s breaking an addiction to spending and debt.

I am in my early 50’s. We will be inheriting around 60,000.00. What would you recommend for doing with the money to help it grow? Are there any money markets or mutual funds out there that earn you good money anymore?
– Julia

I’ll defer to the experts on this one. Warren Buffett, Jim Cramer, William Sharpe, Burton Malkiel, William Berstein, Paul Farrell, and countless others recommend that almost all investors put their money into highly diverse index funds.

In a nutshell, an index fund is a mutual fund that’s not directly managed by anyone. Instead, the stocks are just purchased based on a certain set of rules – members of the S&P 500, all stocks with a market capitalization of over $10 billion, and so on. This cuts way down on the overhead cost and results in funds that are pretty diverse, too.

The end result is a pretty solid investment. I buy my index funds through Vanguard and right now I only own two – the Total Stock Market Index and the Total International Index. These two effectively give me a tiny slice of every stock in the world. Very diverse and cheap, too. I look at it as a bet on humanity – I believe that capitalism will always result in greater efficiency and greater value, and thus overall the stock markets will always trend upwards.

What do you think are the best reasons to leave a job you like/love but there is something/someone about it that is stealing your joy? Are there definite signs that “enough is enough”?
– Nancy Juniper Wands

I think there’s really only one. If you wake up every morning and loathe the idea of going to work, you should move on. If you like it some days and don’t like it other days – that’s life. Every job is like that.

If you hate it every day, though, it’s dragging your whole psyche down. You’re becoming a sadder person because of it, and that’s affecting other areas of your life.

Recently, I left a job that I mostly liked. It was a tough choice, but overall it was the right one – it gave me my life back. I was in a position where I was working two jobs and as a result I was beginning to loathe my whole life.

When your job is making you hate your life, move on. No amount of money is worth that.

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