Reader Mailbag: Lifetime Learning

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. Protecting small business idea
2. Idea for app
3. Church donation advice
4. Side business income
5. Weird student loan arrangement
6. One meal a day
7. Gardening advice
8. Retire now?
9. Rollover or pension?
10. Combining financial accounts

Never stop learning. Never stop growing. Never stop trying new things.

The moment you start skipping those things is the very moment when others pass you by.

Learning doesn’t end the day you get your degree.

Q1: Protecting small business idea
I’ve started up a small business about 6 months ago for extra income outside of my regular job. It’s doing really well and I’m making as much or more than my full time job already.

I’m interested in hiring people, but I worry that they will steal the idea and go off on their own as it is relatively easy to make money with small upfront investment and limited skills/knowledge. Any suggestions for how to prevent this? Is a “no compete” clause possible and enforceable?
– Darren

You need a non-disclosure agreement. This ensures that they cannot speak of or use business secrets they learn from you.

To properly set one up, you’d want a lawyer. I would not simply trust a boilerplate NDA.

You also might want to consider splitting up the process so that workers are focusing only on specific parts of the business you’re running rather than looking at the full picture.

Q2: Idea for app
I have a really cool idea for a personal organization and motivation app but I don’t know the first thing about programming. I would like to partner with a programmer to make this idea happen but how do I start?

– Daniel

It will be difficult to find someone who will just “partner” with you and write the code without any sort of payment. Your best bet, honestly, is to save up to hire a programmer to write the app for you.

You can hire programmers using sites like at very reasonable rates.

Much as with Darren above, I’d suggest looking into an NDA once you hire a programmer. Make sure your listing isn’t incredibly specific. This way, you can legally protect your idea.

Q3: Church donation advice
I donate 10% of my annual income to my church. I don’t mind doing it and I have done it for most of my adult life.

Recently, I’ve been thinking about the money I donate so I started looking at the church’s budget. I am frustrated how some of my money goes toward things I consider unnecessary, like maintaining a large side building that seems useless to me.

I talked to the pastor about this but he didn’t seem to really listen to me.

I love the community and the people here, but I feel like my money isn’t being used well. I am struggling with what to do and hope you might have some advice for me.
– Stan

First of all, it’s pretty hard to find a charity where you’ll feel great about every dollar spent. In my experience, they don’t exist. A charity that pays its employees too much in one person’s eyes will be paying their employees too little in someone else’s eyes. A charity that spends too much on facilities in one person’s eyes will be spending too little in someone else’s eyes.

That being said, it’s up to each person to decide what exactly tithing means to them. Different faiths and religious traditions have different recommendations as to what to do with that money, but many of them state that if your heart isn’t in it, you should find some other place to give.

Before you give up and switch, you should research other places where you might donate your money. If you’re considering simply not donating, ask yourself what you would otherwise be doing with that money and whether it’s more in line with your values.

Q4: Side business income
I have a full time job as an IT Consultant but given the uncertainty in the industry I have been thinking for quite some time about doing a small business in my free time. Please let me know if by spending at most 2 hrs/day I can start a small business along side my regular job. What are your ideas on that? How much can one make from blogs, etc.?

– Sam

You’re not going to make a mint online just spending two hours a day unless you’re extremely lucky. I spent several hours a day on Money360 for months and months and barely earned a dime, as the popularity really arrived later on in the site’s life.

The truth is that online income either builds on itself very slowly or earns a low wage (or amounts to a pyramid scheme). You can earn a little less than minimum wage at a site like Mechanical Turk whenever you want. (I’m not talking about freelancing opportunities here, just things that anyone can immediately launch and participate in.)

If you want to build more than that, you’re going to have to invest a lot of time with very little return up front. Building a blog or a video channel or a series of ebooks or whatever else you want to build doesn’t earn much until you build an audience and that takes a lot of time.

Those things really only work as a side business if you’re willing to dump in a lot of hours up front for pennies per hour in an effort to slowly raise that rate over time. Many people are never willing to get there.

Q5: Weird student loan arrangement
I am my grandmother’s oldest grandchild. When I graduated from high school, she offered to lend me all of the money I needed for college. She says I never have to pay her back unless I get “rich.”

I took her offer of course but now that I am graduating I am really feeling uncomfortable. She loaned me $78,000 which is just a ton of money. I feel like I should start paying her back but she hasn’t mentioned it at all. The one time I tried to talk to her about it, she told me to “shush.”
– Angie

My honest interpretation of this is that your grandmother just wanted to pay for your college education except that she wouldn’t mind having her money back if you were to found the next Facebook or something to that effect.

In other words, until your net worth starts to reach well into the seven figures, I really wouldn’t worry about repaying her.

Now, before you adopt that as your mantra, I would sit down with your parents and make absolutely sure that you’re making the right move by doing this. They will likely understand your grandmother well and can give you some insight into what she’s thinking.

Q6: One meal a day
My solution for keeping a healthy weight and also not spending too much on food is to just eat one meal a day. I eat whatever I want until I’m full and I just make sure there is one vegetable and one protein at least on my plate. I can easily keep my weekly food spending around $20.

– Jenny

The best man at our wedding actually does much the same thing and is very thin.

I can’t really comment one way or another on how this works. The human body is surprisingly adaptable if you meet basic nutrient needs, so I can’t strictly say this doesn’t work.

However, I would never, ever leap into something like this without talking to a doctor and making sure I was in good shape.

Q7: Gardening advice
What type of peppers do you plant?

– Kelly

Honestly, we plant whatever looks interesting from our Seed Savers catalog. Most years, we just grow what we’ve saved from the previous years along with a few new interesting varieties. Sometimes they work out well and we get something great. Sometimes they don’t.

Once you find something you really like, I highly recommend seed saving. You have to start with a heirloom, as most hybrid varieties from the store have sterile seeds.

If you want a specific recommendation, I’ve liked Georgia Flame in the past.

Q8: Retire now?
I just recently decided to settle for retirement because I fulfilled my time commitment. Things got stressful at work and home (major renovation) and looking after an 82 year old mom. I wanted to stay 18 more months for a larger pension, but I am unhappy where I am.

My mother and I live in a house she and dad purchased many years ago, which was given to me legally by my two sisters. We had a living trust, but they agreed to let me have it.

I have most of the money to pay off for the renovation. I am almost 51 years old. My cash asset is a deferred compensation savings of 210k and union annuity account of 30k. I have two options: 62k a year or 51k a year and may withdraw 115k now- so i can invest it.

Plus, every year I will receive a supplementary check of 12k in December. I pay federal tax on that. We live in a one family 3 bedroom house with a newly done basement- which my son wants to move back into as his own studio. I have no mortgage and live in a borough in NYC.

With that said, do you think it is foolish for me to retire now? I am not planning to look for another employment- may do more frugal things and get into gardening church involvement,spend more time with mom, etc. I plan to try renting a bedroom to a college student if my finances ever get dicey.
– Carl

If I’m reading your situation right, you will be receiving $63,000 to $74,000 a year for life, whatever Social Security kicks in when you’re eligible.

If that’s the case, that should be more than enough to retire on assuming you don’t live an expensive lifestyle. That’s substantially more than the average American earns.

Carl’s question continues…

[Continuing from question #8] Should i take 115k cash and roll into IRA OR decline that for an additional 10k yearly pension for life?

– Carl

That one is really a coin flip. Assuming you live past age 70 or so, the pension will likely earn you more money, particularly if you use that money wisely. If I knew I was going to live more than 20 years, I’d rather receive $10,000 more a year and invest it than invest a $115,000 lump sum and never receive another dime.

However, that also assumes that your pension is going to always be stable, which depends on the finances of whatever institution you’re employed with.

I’d go with the IRA solely for diversification. Over a long life, it might not earn as much as the pension, but it is protection in the event that your pension is ever defaulted.

Q10: Combining financial accounts
[Continuing from question #9] If I do retire-is it better to take the 115k withdrawal, i plan to take def comp and union annuity (210k+30k) and put these life savings into one Vanguard fund Roth IRA- to keep it simple- i hate having several accounts at different places. Is it okay to keep the total ($240k+115k) into one vanguard account?

– Carl

In either case, if you’re going to have one financial account, Vanguard is a really good choice. I use Vanguard myself.

Within that Vanguard account, I’d still avoid having all my eggs in one basket. Spread the money around a few funds that invest in different things so that you’re not caught in a sticky situation if a market begins to drop.

You’re in good shape, Carl. Most people would love to be in your shoes. Your biggest concern should be overspending, I think. Live a reasonable lifestyle and you should be free for life.

Got any questions? The best way to ask is to email me – trent at thesimpledollar dot com. IĆ­ll 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.

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